377255821-ABM-AE12-012-Socio-Economic-Impact-Analysis.pptx

For ABM Students

1. APPLIED ECONOMICS Socio-Economic Impact Analysis ABM_AE12

2. Start up What do you think are the result of technology to the environment? What is the connection between the society and economics? As a future businessman, what is the most necessary thing you must consider in doing a business? APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

3. Objectives: At the end of the chapter, the student would be able to: Identify and explain the various socioeconomic factors affecting business and industry Analyze and evaluate the viability of a business and its impact on the community Formulate recommendations and strategies on how to minimize and maximize a business’s negative impact and positive impact, respectively APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

4. In the production process the operation of the firm will need intermediate inputs or raw materials to be processed by factor or transforming inputs. Thus, the actions and decisions of the business firm will have effects on its suppliers of raw materials. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

5. Framework for Socioeconomic Impact Analysis Firm Final Goods Intermediate Goods Intermediate Inputs Factor Inputs APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

6. The firm organizes its production activities by sourcing raw materials or intermediate inputs that factor inputs add value in the transformation process. The purchase of intermediate inputs is made from enterprises within and outside the industry and outside the country. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

7. On the other hand, labor market for labor services, capital market for funds to finance the acquisition of capital and the real estate market for land and office space. These intermediate inputs are processed by various factors inputs through the technology available to the firm to produce the firm’s output. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

8. The other component of the firm’s output is finished products that are sold to final buyers including consumers, investors, government agencies and the rest of the world as exports. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

9. TRACING THE IMPACTS THROUGH THE SOURCING OF INPUTS OF A BUSINESS FIRM APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

10. Intermediate Inputs (Raw materials) Internal vs external sources. Sourcing raw materials from internal suppliers can create income and employment opportunities to produce of these raw materials. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

11. Independent suppliers vs. subsidiary of conglomerate. Sourcing intermediate inputs from independent suppliers domestically may have greater ripple effects than sourcing it from a subsidiary of a conglomerate. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

12. Raw vs. semi-processed inputs. Sourcing immediately inputs that are still very raw in product transformation will have limited multiplier effects unlike sourcing them under semi-processed state especially if these intermediate inputs where sourced domestically. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

13. Market power of the firm. If the purchasing firm has market power in the industry it can exercise its market power over its suppliers by extracting surplus from them. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

14. Factor Inputs APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

15. Sourcing for labor services The source of labor services, nature of engagement, basis of compensation, degree of unionization of laborers, presence of human resource development plan, and working conditions will shape the impact on the labor market of a firm’s purchase of manpower services. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

16. Within the community vs. outside the community. It is beneficial to the laborers, firm and the community if labor services are drawn from the community where the firm is located. Direct employment or subcontracting. Although direct hiring may expensive for the business it has a number of positive effects on the laborers Minimum wage vs. market rate. We know that laborers are semi skilled personnel are usually paid the minimum wage as required by law. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

17. Organized vs. non-organized. In large companies laborers are highly organized and have strong unions. Human resource development. Some big firms provide training programs for the human resource development of their workers. Some training programs are specific and some are general. Temporal and spatial working conditions. Temporal working conditions refers to the shift in duration of work. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

18. Sourcing funds for capital formation Funds are needed by the company to start its operation, purchase equipment and expand its physical plant. Own savings vs. capital market. There are several options in raising funds to finance the capital expenditure of firms. They can source it from their own savings or retained earnings. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

19. Foreign borrowing vs. foreign direct investment. There are number of large domestic firms that source their funds from abroad. They can do this by borrowing or by inviting foreign partners through foreign direct investment (FDI). APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

20. Market determined vs. regulated rates of return. As mentioned earlier, business ventures are undertaken to make profits. These profits are not only income the owners of capital a fair rate of return of their investments. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

21. Sourcing for land inputs A business company will need an office space to conduct its commercial operations. Land intensity of business Location of business and opportunity cost of land use APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

22. Sourcing for managers and professionals Insiders vs. outsiders In-house vs. out-sourced training APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

23. Payment of taxes Taxes are paid at different levels of government from the barangay level to the national government for the conduct of business enterprise. Business permits, business taxes, municipal sales taxes, and real estate taxes are paid at the local government unit. However, value added tax, import duties, export taxes, and income taxes including royalties are due to the national government. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

24. Output as intermediate inputs Contributions on industrial integration If the output of the firm is used by other industries as intermediate inputs the selling firm is contributing to the integration of the economic sector. Contribution to productivity of other industries A more important impact of producing firm on the firm purchasing its product as intermediate inputs is the effect on the productivity of the buying firm. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

25. Output as final demand Personal consumption The quality of the output can affect the level of satisfaction and welfare of the consumers. Investment There are firms that produce capital goods like equipment, agricultural implements and industrial tools that are sold to other firms not as intermediate inputs but as factor inputs. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

26. Government consumption Government consumption refers to the product disposition is a combination of household consumption and purchase of capital goods by firms. Exports Not all outputs of firms or industries are disposed in the domestic market. There are firms that sell a portion of its output to the rest of the world as exports. In fact, many firms located in special economic zones are producing goods entirely for exports. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

27. ACTIVITIES : Conduct a forum discussing the advantages and disadvantages of establishing a industrial plant in your community. APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

28. Quiz : As a senior high school, how can social impact analysis affected your life? APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12

29. Reference: APPLIED ECONOMICS SOCIO-ECONOMIC IMPACT ANALYSIS ABM_AE12 Tullao Jr., Tereso S. Applied Economics For A Progressive Philippines. Phoenix Publishing House; 927 Quezon Ave., Quezon City. 2016 Pagoso , Cristobal M. Philippine Economics (Macro Approach). NELSON PUBLICATION; Marimar Village Paranaque City. 2003 Carnaje , Gideon P. Applied Economics. Vibal Group Inc , Araneta Avenue, Quezon City. 2016