Compiler/Contextualizer: REYMAR R.

SARSOZA

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 SECOND QUARTER- MODULE 5
SOCIO-ECONOMIC FACTORS AFFECTING BUSINESS AND
INDUSTRIES

CONTENT STANDARD : The learner demonstrates an understanding

of various socioeconomic impacts of business
on the following sectors: consumer, supplier
and investors, government, households, and
international trade.
PERFORMANCE STANDARD : The learners shall be able to conduct a
socioeconomic impact study on consumers
(new product and services); suppliers;
investors (capital, income) government (tax
revenues, poverty alleviation, basic services);
households (standard of living, employment)
and international trade (exports and imports of
goods and services) leading to options in
venturing into a business.
LEARNING OUTCOMES : Conduct a socio economic impact or survey
about consumers (new product and services);
suppliers; investors (capital, income)
government (tax revenues, poverty alleviation,
basic services); households (standard of living,
employment) and international trade (exports
and imports of goods and services) and how
the pandemic affected the business and
industries in their locality.
COMPETENCIES/CODE :Explain the effects of the various socio-
economic factors affecting business and
industry.

ABM_AE12-Ie-h-10

TOPICS : Socio Economic Factors Affecting Business

and Industries

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 What I Need To Know
This module was designed to help you understand the factors affecting
business and industries. At the end of this module, you are expected to:

1. Demonstrates an understanding of various socioeconomic impacts

of business on the following sectors: consumer, supplier and
investors, government, households, and international trade.
2. Explain the effects of the various socio-economic factors affecting
business and industry
3. Conduct a socioeconomic impact study on consumers (new product
and services); suppliers; investors (capital, income) government (tax
revenues, poverty alleviation, basic services); households (standard
of living, employment) and international trade (exports and imports
of goods and services) leading to options in venturing into a
business.

What I know
MULTIPLE CHOICE: Write the letter of your choice on a separate sheet of
answer.

1. What is a socio-economic factor? It is ____________________.

a. An important characteristic that influences consumers.
b. A business influence to society.
c. A hindrance to economic growth.
d. An appeal to observe health protocols.

2. What factor that influences the type of occupation that an individual or

person can get?
a. Education c. Profession
b. Income d. Health

3. Who is considered to be the heart of the business?

a. Shareholders c. Consumers
b. Businessmen d. Government

4. What determines how much a person can spend on a certain product

or service?
a. Business c. Employment
b. Income d. Production

5. What attracts investors to the country and increase employment?

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 a. Foreign direct investment c. Economic savings
b. Economic growth d. Gross Domestic Output

6. What defines the quality of life in the society?

a. Environmental c. Political
b. Socio-economic d. Social

7. What factor that in any cases involves in importation and exportation

of various goods?
a. Interest rates c. Recession
b. Exchange rates d. Physical

8. What determines lending practices?

a. Interest rates c. Recession
b. Exchange rates d. Physical

9. What part of the general business analysis that pertains to the

influence from outside and surroundings?
a. Political c. Environmental
b. Economics d. Technological

10. What will help you make better decisions about the future and
direction of your business?
a. Environmental c. Political
b. Socio-economic d. Social

11. What is one of the goals of change management?

a. To obtain buy in from stakeholders
b. To limit the effects of a change
c. To keep the people involved to a minimum
d. To reduce the time it takes to make a change

12. Which of the following is the most critical component of a business

plan?
a. Market analysis
b. Company description
c. Executive summary
d. Financial plan

13. Which of the following is a potential risk of implementing enterprise

risk management software?
a. Standardization of reporting
b. More emphasis on risk
c. Loss of data during transfer
d. Less efficient use of resources

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 14. What is the cost of employing product inspectors?
a. Appraisal cost
b. Prevention cost
c. Internal failure cost
d. External failure cost

15. Which management functions lays the groundwork for all of the
other management functions?
a. Directing
b. Organizing
c. Staffing
d. Planning

What’s In

The tools and techniques used by businesses and industries are

strategies to fulfill their vision and mission in a competitive market and raised
them on a spot for market power. On a separate sheet of paper, give at least
2 most common tools or techniques used in the Philippines and provide a
description of the chosen tools or techniques.

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 SOCIO-ECONOMIC
Lesson FACTORS AFFECTING
BUSINESS AND
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INDUSTRIES

What’s New
“Our people can draw on the tremendous strides made in recent years, not only
in terms of advancing themselves spiritually and materially, but also in having
weathered social and economic turbulence, triggered, in the main, by factors
not of their own creation.”
Denzil Douglas

Based on the statement by Denzil Douglas, what do you think are those he
referred to as social and economic turbulence? How significant it is to identify
them? What does he meant by factors not of their own creation?
Illustrate your answer or interpretation through a slogan. Prepare for a
presentation during the synchronous class or submit a video of you
presenting and discussing your output.

What Is It
This module talks about the various socio-economic factors affecting
businesses and industries. What are those factors that businessmen and
company owners have to take into consideration and that at anytime maybe
these factors will bring them down? Business is not only about investment,
money, patience and hardwork but also it requires skills to maintain it in the
competition arena. These socio-economic factors can help businesses decides
as to what business strategy will be appropriate on a certain circumstances.
What is Socio-Economics? Socio-Economics is a study of relationship between
economic activity and social life. What is Social Economics? Social Economics
is a specialized branch of Economics that concerns with studying the intimate
relationship between economics and social behavior.

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Before getting into the details of the socio-economic factors, an understanding
of the social and economic problems might be a good help in this module.
What are the social problems?
a. Poverty – scarcity or lack of necessity, gives rise to various social issue.
b. Illiteracy – inability to read and write probably due to lack of access or
higher cost of education
c. Corruption – primary reason behind economic instability
d. Unemployment – no job or looking for a job probably due to a mismatch
of skills and the market need.
e. Health problems – probably due to lack of access to healthcare
f. Child labor – children are bound to work to sustain life.
What are the economic problems?
a. Slowdown Productivity – refers to a minimal growth between the output
volume and volume of inputs.

Productivity is a key driver of economic growth and changes in

living standards. Labor productivity growth implies a higher level of
output for unit of labor input (hours worked or persons employed). This
can be achieved if more capital is used in production or through
improved overall efficiency with which labor and capital are used
together, i.e., higher multifactor productivity growth (MFP). Productivity
is also a key driver of international competitiveness, e.g. as measured
by Unit Labor Costs (ULC).

Figure 1: https://stats.oecd.org/Index.aspx?DataSetCode=PDB_GR

b. Income polarization – pertaining to income distribution of a nation,

disproportionately moving towards a lower income part of the
distribution.

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 Figure 2: https://smallbusiness.chron.com/socioeconomic-factors-affecting-small-businesses-73234.html

c. Low inflation and low levels of wage growth – as inflation is nearing zero
or even close to full employment, there is still little evidence for wage
push.
d. Global cooperation – an act of countries working together in achieving
their mission and vision but unexpectedly creates negative spillovers
and thus increases tensions among countries.

Figure 3:http://www.rosmed.ru/data/annonce/400/9073288_global_cooperation_clipping_path_wbyi.jpg

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Socio-Economic Factors (MICRO level):
1. Environmental Analysis – this refers to the process of looking at the
external socioeconomic issues in a business. It is considered a part of
the general business analysis and is useful to the executives of the
company.

2. Economic Factors – essential part of the business because these are

factors connected to money, goods and services. Other factors are:
a. Interest rates – determines lending practices and also it is a
good information for a company that relies on debt capital to
finance ambitious projects.
b. Exchange rates – it affects the ability of the company to pay
especially those business involve in the exportation and
importation of goods.
c. Recession – a slowdown or a massive contraction in the
economic activities. This may force companies to drop prices
to stay afloat.

3. Health Factors – determined by the environment and their

circumstances like:
a. Social status and Income – high social status and high income
is positively related to health. It means that it predisposes
better health for someone with high social status and high
income.
b. Educational level – higher level of education is directly related
to health. The higher the education means more informed on
diseases and its effects.
c. Physical environment – the safer homes, health workplaces,
clean air, safe drinking water, updated infrastructure
determines better environment for business and health.
d. Social support network – when individuals have a lot of
support from family, friends and from the community
predisposes to better individual, business and health.

Figure 4: https://stepintofuture.wordpress.com/2018/09/30/social-isolation-social-engagement-and-networks-of-
support/

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Socio-Economic Factors (MACRO level):
1. Demographics – pertaining to the study of the population based on
the factors such as age, race and sex. In the Philippines, the National
Statistics Coordination Board and other inter-related agencies like
Philippine Statistics Office and Data Philippines.

Figure 5: https://www.worldometers.info/demographics/philippines-demographics/

2. Economics – refers to the study of the allocation of scarce resources.

3. Public Resources – refers to the assets or property owned by the state
and not limited to land, buildings, facilities, equipment, funds,
supplies, telephones, computers.
4. Infrastructure – referring to the basic systems and services that a
country needs in order to function and this requires a huge amount
of initial investment and are essential for the enabling productivity
of an economy.
5. Land use – a term used to describe the human use of land may it be
economic or cultural activities.
6. Relocations – a term used to the availability of a space for a new
place or to lay out in a new place but in business and economics it
implies job or work relocation, corporate relocation or to a
warehouse transfer.

Figure 6: https://www.linkedin.com/pulse/why-business-relocations-should-your-greg-hohns

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 What’s More?

In this time of pandemic, identify at least 5 socio-economic issues in

the Philippines and cut out a picture describing your identified economic
issue. Paste the picture on a separate sheet of paper with a caption. (One
picture per page).

What I Have Learned?

In relation to your output in What’s More, write on a clean sheet of

paper a one or two paged essay about the impact of the socio-economic issues
(that you chose) to the Philippine business and economy as a whole. Follow
the order (Introduction, Body/Content, Conclusion).

What I Can Do

In relation to your answer in What’s More and What I Have Learned,

produce a survey questionnaire about the impact of socio-economic issues to
the Philippine business and industries. Follow the format of producing a
survey questionnaire from your quantitative research class.

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 Assessment

Multiple Choice Questions: Write the letter of your choice on a separate sheet
of paper.

1. What is referred to as disproportioned income distribution?

a. Low productivity c. Income polarization
b. Minimum wage d. Low income

2. What is referred to the utilization of land for space and business?

a. Public resources c. Land use
b. Urban planning d. Zoning

3. What global cooperation that the Philippines belonged to?

a. Asia Pacific Economic Cooperation
b. Pacific Trade Cooperation
c. Southeast Asian Organization
d. Asian Trade Union

4. What is productivity in Economics?

a. It refers to a higher level of output with minimum inputs.
b. A key driver of economic growth.
c. Manufacturing functional power.
d. Maximum output and minimum input.

5. What socio economic factor that requires a huge amount of initial

investment in order to function properly?
a. Telecommunication
b. Culture
c. Health
d. Infrastructure

6. Which government agency that collects data on demographics?

a. Census and Population Commission
b. National Statistics Commission
c. National Economic Development Authority
d. National Statistics Coordination Board

7. What factors are included in the demographics?

a. Section, year level and grades
b. Age, sex and race
c. Gender, ethnicity and income
d. Economic status, gender preference, ethnicity preference

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8. What do we call our support system?
a. Social media network
b. Social support network
c. Social economic network
d. Social facebook network

9. What causes the increase of tensions among countries?

a. War c. Negative externalities
b. Negative comments d. Non-cooperation

10. What socio economic factor that businesses have to keep track in order
for their business to stay afloat?
a. Interest rates c. Land use
b. Exchange rates d. Public Resources

11. What tool or technique that business executives rely on?

a. Economic Analysis c. Environmental Analysis
b. Social Economic Analysis d. Health Analysis

12. What does it mean by being educated entails better health?

a. You are more informed about what medicine to buy if you are
sick.
b. You are more aware of the diseases and what it can do to your
body.
c. You know that prevention is better than cure.
d. All of the above.

13. Why is dropping of prices of goods and services during recession

conspicuous?
a. That is the only strategy that business can think of in order to
compete.
b. Because it is the trend.
c. Better strategy for the business to stay afloat.
d. All of the above.

14. What does it mean by a slowdown in the economic activity?

a. Depression c. Business Cycle
b. Recession d. Trough

15. Which firm or firms are affected by the exchange rates?

a. Insurance companies c. Export-import firms
b. Relocation companies d. Money remittance centers

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References:
Amjad, M and D.I.Khan, Khyber-Pakhtunkhwa. (2012). The impact of socio
economic factors on small business success. Retrieved from
http://www.ukm.my/geografia/images/upload/3.geografia
jan%202012M%20Amajad%20Saleem-edited%2028.1.12-1.pdf

Arnold, Roger A. Principles of Economics. 11th edition. 2015

Cerri, K. (2019). Measuring the socio-economic impact of business: The what,

why and how? Retrieved from
https://businessfightspoverty.org/measuring-the socio
economic-impact-of-business-the-what-why-and-how/

Hohns, G. (2016). Why Business Relocations Should be Your Business.

Retrieved from [Figure 6] https://www.linkedin.com/pulse/why
business-relocations-should-your-greg-hohns

Hutt, R. (2016). What are the 10 global challenges? Retrieved from

https://www.weforum.org/agenda/2016/01/what-are-the-10-biggest
global-challenges/

Jean (2018).Social Isolation, Social Engagement, and Networks of Support.

Retrieved from [Figure 4]
https://stepintofuture.wordpress.com/2018/09/30/social-isolation-
social-engagement-and-networks-of-support/

LaMarco, N. (2018). The Socioeconomic Factors Affecting Small

Businesses. Retrieved from [Figure 2]
https://smallbusiness.chron.com/socioeconomic-factors-affecting
small-businesses-73234.html

Mankiw, Gregory N. Principles of Economics. 17th edition. 2015.

OpenStax College, Principles ofEconomics. OpenStax College. 21 June

2018.Retrieved from https://openstax.org/details/books/principles
economics-2e

OpenStax College,Principles of Macroeconomics. OpenStax College. 21 June

2017. Retrieved from https://openstax.org/details/books/principles
macroeconomics-ap-courses-2e

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Organization for Economic Cooperation and Development. (2016) . Retrieved
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https://www.oecd.org/economy/newoecdindicatorstraceproduct
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Posen, A (2021). Economic issues facing the world economy as well as regions,
countries, include prospects for growth, inflation, energy and the
environment, inequality, labor issues, emerging markets and the impact
of new technologies. Retrieved from
https://www.piie.com/research/economic
issues#:~:text=Economic%20issues%20facing%20the%20world,the%
0impact%20of%20new%20technologies

Shpak, S. (2019). Social Factors Affecting Retail Business. Retrieved from

https://smallbusiness.chron.com/social-factors-affecting-retail
business-71662.html

Siyal, M. Y and Chowdry, B.S, Rajput, A.Q (2019). Socio-economic factors

and their influence on the adoption of e-commerce by consumers in
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Zhang, T. (2017). Global Economic Challenges and Opportunities. Retrieved from

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