What is Socio-Economic?

Socioeconomic – field of study that

examines social and
Economic factors to better
understand how the combination of
both influences something.
What is Socio-Economic Impact Study?

Socio-economic impact studies on

evaluating the impacts
development on community social
and economic welfare.
Development impacts can be
assessed in terms of changes in
income and employment, public
services, housing, standards of living
of the community.
The goal of socioeconomic study is
generally to bring about socioeconomic
development, usually by improvements in
metrics such as GDP, life expectancy,
literacy, levels of employment, etc.
Socioeconomic factors are
characteristics that define the quality
of life in a society. They influence the
behaviours, attitudes, trends, tastes,
and life-styles of individuals.
Social Factors Affecting Business

1. Population growth rate. Population often

takes advantage of the social factors. The supply
and demand of goods and services in an
economy can change with the structure of
business. Decline in birth rates mean demand
will decrease. It also indicates greater
competition as the total consumers fall.
2. Changes in social preferences. Social
preferences relating to fashion or fad are
continously changing. If a business refuses to
adapt to changing social references, its sales will
decline, and business will fail.
3. Health consciousness. Social factors change
people’s attitude. A good example is people’s
attitude towards healthy diet. Because of this,
businesses like fitness center and demand for
organic food changes.
4. Values, beliefs, and practices. A business
must be aware of the people’s social
preferences regarding its needs and wants.
These preference and needs and wants will be
influenced by a population’s values, beliefs and
practices
5. Education. A society that values higher
education will provide a better workforce that
will lead to more productivity and innovation
6.Hard work ethics. Work ethic is a value based
on hard work and diligence. Businesses believe
in the requirement of hard work and its ability
to enhance character. A community that values
hard work ethics, businesses will have access to
productive workers.

7. Attitudes toward investments. A society that

supports investment in infrastructure will have
access to good transportation and
communication system.
8. Attitudes toward green and ecological
products. Consumers with positive attitudes
towards green and ecological products are more
likely to purchase green and ecological
products.
Economic Factors Affecting Business Industry

If the economy is going through recession

stage, businesses decline due to lower demand,
but if the economy is going through prosperity
or peak period, demand increases that will lead
a higher profits and revenue to businesses.
1. Inflation rate. Higher inflation rate leads to
decrease in the purchasing power of money for
the people resulting to lower demand for goods
and services.
2. Interest rates. Higher rates will lead to
decrease in the total demand in the economy
and very difficult for business to find customers
who are willing and able to buy its product.
Lower interest rates will lead to an increase in
demand in the economy.
3. Unemployment level. High level of
unemployment will greatly affect business.
Unemployed people will not have enough
money to buy goods offered in the market.

4. Labor costs. High cost of labor (salary/wage)

will result to higher production costs. Higher
production costs will lead to higher prices of
goods and services.
5. Taxes. Higher taxes will lead to decrease in
take-home pay of an individual and decrease in
demand in the economy.
Effects of Social Environment to Business

1. Teamwork
Employers who take the necessary
steps to create a positive social
environment in the workplace can bring
future success to their business.
Employees can get along with others and
positive in their relationship to one
another, cooperation and teamwork are
more likely to exist.
Negative social environments discourage
employee cooperation. This will foster
disagreement and conflict among
employees and destroy the ability or
willingness to work together.
2. Job Satisfaction
The Social environment of the workplace
can have a positive or negative effect on
employee’s job satisfaction. Greater sense
of job satisfaction and enjoyment on the
part of the employee’s working on a
positive social enviroment.
In a negative social environment, employees
are not satisfied with their jobs and do not
enjoy working with their colleagues. The
employees are always in conflict with one
another and do not like their how employer
treated them.
3. Customer Interaction
Customers who experience a positive social
environment are more likely to appreciate
the atmosphere they experience when
interacting with employees.

Customers who experience a negative social

environment may be more likely avoid
doing business with them.
The Social and Ethical Impact of Business to Society

Economic Impact on Society

a. Wages and salaries paid to employees to improve

their standard of living.
b. Timely payment for the supplies of goods
purchased on credit from the suppliers.
c. The value of goods and services sold to customer.
Governance

Business ethics must be the priority in every business

transaction. If businesses offer bribes in exchange of
work and other benefits, the ethics of society suffer.
Corruption may raise the price of goods and services
when companies engage in price fixing( maintaining
of prices at a certain level by agreement between
competing sellers).
Privacy
All information collected from customers must be
treated confidential. Some information may be
sensitive like medical history and amount of money
deposited. Businesses have a negative impact on a
society if consumers find out that companies are not
keeping such information secure or are selling it on 3rd
parties. Avoid doing things that may hinder the
exchange of personal and private information that
helps in business operation.
Environment

Businesses that implement environmental policies to

use energy more efficiently, reduce wastes, and in
general lighten their environmental footprint can
reduce their internal costs and promote a positive
image of their company. The environmental initiatives
of a market leader often force competitors to take
similar action for an increased beneficial effect on the
environment.
Benefits of Measuring Socio-Economic Impacts
Comapanies affect people’s assets, capabilities.
Opportunities, and standards of living – sometimes
positively, sometimes negatively. Ang because these
people are companies employees, customers,
suppliers, distributors, retailers, and neighbors, their
growth matters to the bottom line. It influences
whether or not companies have happy customers,
healthy value chains, contented local communities,
and supportive governments and other stakeholders
now and into the future.
1. Obtaining or maintaining a license to operate

Very clearly, measuring socio-economic impact can

help companies show stakeholders that their activities
benefit the economies and societies in which they
operate. It can also help them better understand if
they are fulfilling their commitments and stakeholder
expectations or if there is a gap between their
impacts and what stakeholders think.
2. Improving the business enabling environment
Measuring socio-economic impact is also a powerful
way for companies to show policymakers how their
business activities are contributing to public policy
goals – thus helping to develop the right mix of rules,
incentives, and public services needed to maximize
business contributions.

3. Strengthening value chains

By assessing their socio-economic impact,
companies are better.
Prepared by: Paulo Romero
Sponsored by: Google.com