TERM 1 - LESSON 6

Business
Management

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The role of
Business in
Economic
Growth and
Development
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Hunger in the Philippines
Hunger continues as a problem in the Philippines. From
a nationwide survey covering a sample of around 51,000
families, the 2011 Annual Poverty Indicator Survey
showed that hunger was experienced by 16% of families
in Eastern Visayas region. Likewise, at least 1 in 10
families in other regions also experienced hunger as
shown in the following statistics: Northern Mindanao
(10.1%), CARAGA (11.7%), and SOCCSKSARGEN (13.0%).
SOCCSKSARGEN is previously known as Central
Mindanao region.

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Business plays an important role in
driving the economic growth and
development of a country. Business
enterprises create new jobs and
provide employment for people.

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Income
Businesses helps people to earn income to spend for their
housing and health needs.

Increased Purchasing Power

Individuals get additional options on where to spend their
money. Having more cash may encourage them to indulge in
leisure, fun, and recreational activities. Or they can invest to
businesses and produce more goods and services.

Increased Purchasing Power

The multiplier effect of education leads to significant results in
development. Educational institutions provide students with
access to quality education, such as upgraded learning
materials and enhanced learning strategies.

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Corporate
Social
Responsibility

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Corporate Social Responsibility
Corporate social responsibility (CSR) refers to strategies
that companies put into action as part of corporate
governance that are designed to ensure the company’s
operations are ethical and beneficial for society.

Most businesses nowadays understand that looking after

the society's long-term best interests and welfare will
deliver sustainability for the organization.

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Corporate Social Responsibility

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Economic Responsibility
Making profit is the most basic responsibility of a
company to its stakeholders and the society. When the
company is profitable, it creates jobs for the community
and contributes useful products for the good of the
society.

Example:
When a company modifies its manufacturing processes
to include recycled products, which could benefit the
company by potentially lowering the cost of materials
and also benefit society by consuming fewer resources.
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Legal Responsibility
When a company obeys the laws and observes legal
practices, it produces products that guarantee
consumers' safety and ensures truthful practives to its
stakeholders. Tha law dictates what is right and what it
wrong in the society.

Example:
The No Plastic Policy. It is the businesses legal
responsibility to follow the No Plastic Policy.

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Ethical Responsibility
A company that does what is right, just, and fair beyond
just following what is dictated by the law, is practicing its
ethical responsibility.

Example:
Giving a higher wages and ensuring that employees get
competitive pays.

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Philanthropic Responsibility
Companies that strive to give back by contributing
resources to the community or improving the quality of
life of their employees and customers are practicing
philanthropic responsibility.

Example:
Companies who engage in fair trade. These companies
deal directly with farmers and growers and provide them
with fair prices and sustainability programs in order to
help them produce better crops.

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The Triple
Bottom
Line

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The Triple Bottom Line
Another concept related to CSR is the Triple Bottom
Line or focus on the so-called 3Ps - Profit, People, and
Planet. Traditionally, managers focus on improving the
company's financial condition but with the business
challenge to be more responsive to society's needs,
managers are increasingly becoming more aware not
only to consider the firm's economic performance, but
also the benefits and the environmental impacts of their
comapny.

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Different
Phases of
Economic
Development

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Theories on how economies evolve
The Invisible Hand Theory
economic development is brought by the
influence of individuals who produce goods
and services for their personal gain and profit.

Schumpeter's Theory on Entrepreneurship and

Innovations
economic development happens due to the
enterprising actions of individuals who do so
out of noble and less selfish interests.

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 Developing Economies Phase:
Reliance on Agriculture as the
Primary Sector
Development economists believe that in the early
phase of economic development, the agriculture
sector typically plays a dominant role in the
economy, compares to other sectors such as the
manufacturing industry, and the service sector.
Gradually, the improvement and the
transformation of the agricultural sector can lead
to higher productivity and increased incomes for
people.

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 Globalization Phase:
Interdependence Among Countries
and Worldwide Competition
This is characterized by worldwide business competition
and the wide scope for markets and supply of resources
that go beyond national borders. Globalization pertains
to the increasing interdependence among countries for
accelerated economic activities. For instance, when you
examine the parts that compose you cellphone gadget,
you may notice that it has been manufactured and
assembled with parts and materials sourced from
different countries.

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 Industrialization Phase:
Decline in Agriculture and Shift to
the Industry Sector
Economic transformation occurs with a decline in share of
agriculture to the economy, and the accompanying shift to the
industry sector. Industry is broadly defined to include the
manufacturing, mining, construction, electricity, gas, and
water sectors. The "modern" economy develops with the
growth of industrialization. Transition from traditional to
modern economy is characterized by the following: (1)
increased consumer demands, (2) increased incomes, (3)
growth in the labor force, (4) accumulation of capital, and, (5)
introduction of new technologies.

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 Learning Activity

Reflect Upon:

Do you think that globalization is good for all

types of businesses, whether big or small? Why
or why not?

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 Performace Task
Assessment

"CSR Presentation"

Mechanics are posted in your google class and

an example of Corporate Social Responsibility
Strategy Plan

Deadline: October 13, 2022

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 Written Assessment

Examination covering the lessons discussed

here and the previous lessons - PEST, SWOT
and The Local and International Environment of
the Firm.

This will be posted in your google classroom and

you have to do it during your BM-ILP on October
14, 2022. (Late submission will have deduction)

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Thank you!

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