BUSINESS ORGANIZATIONS

CONTRIBUTION, PURPOSE, AND ROLE

TO SOCIO-ECONOMIC DEVELOPMENT

LESSON 2
Prepared by: ARLENE JORNADAL-SOLIVIO, LPT
 OBJECTIVES

• define socio-economic development;

• explain the role of each form of business organization in

socio-economic development; and

• appreciate the role of business organizations in
socio_x0002_economic development.
LET US HAVE A RECALL
Identify the firms listed below
according to its forms of business
organization. Write your answer on the
matrix provided.
 JAMES Bakeshop
Dumaguete Cathedral Credit Cooperative (DCCCO)
Philsouth Properties and Development Corporation
Ana’s Sari-sari Store
San Miguel Corporation
Chef Tobz Cakes and Pastries Partnership
Negros Oriental II Electric Cooperative Inc.
 What You Need To Know

Socio-economic development is a process that seeks to

identify both the social and the economic needs within a
community, and seek to create strategies that will address
those needs in ways that are practical and in the best

interests of the community over the long run.

 The Role of Each Form of
Business Organization in the
Economy
 SOLE/SINGLE
PROPRIETORSHIP
a. Create Job
Probably the most important way in which a Sole owner helps improve an
economy is through the creation of jobs. Sole owner business organizations
provide employment opportunities to less educated and uneducated
workers and help minimize unemployment problem in the society. They
move quietly, offer jobs to few people. Employing people at each local
business contributes to the success to the locality, as with the wages they
earn, people buy property, shop and invest freely in where they live. Small
businesses also serve as training ground to workers before they can be
hired to large business organizations. For instance, Bakeries, cake shops,
repair shops, law offices and dental services create jobs that bring money
for residents who then spend their wage at other local businesses which
develop the local economy.
b. Help Small Producers
Most of the goods sold by sole owners are purchased locally
from local producers, thus local producers are benefited by sole
owners. Typically, it offers a larger number of locally produced
goods compared to larger, national, or global chains. A large
amount of money spent at local business stays in the locality.
This is a distinct benefit for the other local business, families, and
workers in the area.
c. Provide Investment Avenues

Sole owner organization provides a chance for small investors who has
small amount of capital to utilize their savings to engage new business.
Anybody can start their own business as long as they have capital. Small
business can give an individual a chance to gain experience, which the
person may use later a larger scale. For instance, an accountant can start a
small business in the comfort of her own home, using the laptop and
internet connection she alrea
d. Help Consumers

Sole owners deliver the merchandise to consumers at their

doorsteps. So, time and energy of the consumers are saved.
They offer convenience to buyers wherein buyers can easily
purchase products. For instance, Online selling, Customers can
purchase what goods/products they need and want quickly and
efficiently at their convenience. if someone needs a product, they
can easily order it and delivered.
e. Supply Quality Goods
Sole owners sell goods of high quality to maintain their
reputation, thus accepting return of defective merchandise. This
ensures the safety and welfare of the public. For instance, A sari-
sari store owner sells quality products encourage customers to
buy more and keeps them coming back as they say, “Go above
and beyond for customers” and you will be rewarded with repeat
business.
PARTNERSHIP
a. Provide Employment

Providing employment opportunities for all is the single most

effective means of tackling poverty and social exclusion, thus
improve individual’s standard of living. Residents in town and
cities should share in higher living standards through
employment.
b. Produce of Goods and Services
Businesses are designed to serve a particular need that people
have, and to provide trusted goods and services related to that
need. Without partnership business production of some of the
goods and services will be inefficient. However, partners will
bring out their technical and managerial skills during the
production of goods and services which has more quality and
increase the qualities of such goods. Likewise, partnership
business will allow individuals with limited capital to team up
together to produce necessary goods for the teaming population.
c. Increase Government’s Revenue
Partnership business helps to increase governments revenue
through the payment of taxes hence, without partnership business,
there would not be much private Companies which will on the
other hand affect the government’srevenue generation.
For instance, Marie and Pastries register the business with the
Bureau of Internal Revenue (BIR) which requires an annual
registration fee and each of the partners will be taxed upon
his/her share of the income from the partnership hence, increasing
government’s revenue.
CORPORATION
a. Offer Better Jobs in terms of Compensation
and Stability
Corporation pays higher salaries ang wages to employees which
makes them stay in the company until they retire. Corporations
seek employment stability as a means of achieving high
commitment, high involvement, and flexibility among their
employees. Employment stability may also have a positive
impact on the reputation of the organization, which in turn, may
help in
attracting and retaining employees. Employment stability helps
organizations avoid procyclical hiring. Given all the potential
benefits of employment security people has no reason to leave.
b. Increase Tax Revenue
The increased presence of companies in the region translates to
increased tax revenue for community projects and local
infrastructure. Taxes that are collected by the government will be
used to fund government expenditures and programs.
For instance, Avocado Crave organized as corporation are made
to settle their income tax liabilities and submit their income tax
returns (tax form) to the Bureau of Internal Revenue (BIR)
consequently, money received increases tax revenue.
c. Improve Quality of Life
Corporation is becoming a tool to improve quality of life. Better
infrastructure and more jobs improve the economy of the region
and raises the standard of living for its residents. Corporation
produces personal products and technology that are rapidly
growing in popularity that make people’s lives easier and faster.
For instance, your smart phone allows you to stay always
connected to your friends and family members and you have
access to an infinite amount of information right at your
fingertips.
Technology is there to make people’s lives easier and improve
COOPERATIVE
a. Provide Employment
Cooperatives are significant in providing jobs, aside from giving
salaries and wages to employees, they also provide opportunities
to upgrade the skills of their employees through workshops and
courses. They also offer employment to students on casual-
appointment basis during long vacations.
b. Pay Local Taxes
Cooperatives need to meet local tax obligation to stay in good
legal standing. Taxes are used to maintain infrastructure of a city,
such as roads, bridges, public transportation, libraries and other
public buildings and services. It is also used for the salaries of
public employees such as teachers, nurses, doctors, agriculturist,
policemen and many more.
c. Respond to Production and Consumption
Responsive production and consumption are “Doing more and
better with less” increasing net welfare gains from economic
activities by reducing resource use, degradation, and pollution
along the whole lifecycle of the corporation, while increasing
quality of life.The production and consumption of healthy food is
envisioned to create healthy consumers, reduce the cost of health
maintenance, and increase the allocation of financial resources to
productive activities.It also promotes resource and energy
efficiency, sustainable infrastructure, and providing access to
basic services, green and a better quality of life for all.
The Role of Each Form of Business Organization
in the Economy
• Create Job
• Help small business producers.
Sole/Single Proprietorship • Provide investment avenue
• Help consumers
• Supply quality of goods
• Provide employment
Partnership • Produce of goods and services
• Increase in government’s revenue
• Offer Better jobs in terms of compensation and
stability
Corporation • Increase tax revenue
• Improve quality of life
• Provide employment
Cooperative • Pay local taxes
• Respond to production and consumption
ASSESSMENT
PERFORMANCE TASK