ABM

Quarter 1 – Module 10: Explaining the

Effects of the Various Socio-Economic
Factors affecting Business and Industry
ABM- GRADE 12
Alternative Delivery Mode
Quarter 1 – Module 9: Explaining the Effects of the Various Socio-economic Factors
Affecting Business and Industry
First Edition, 2020

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 ABM
Quarter 1 – Module 9: Explaining the
Effects of the Various Socio-Economic
Factors Affecting Business and Industry
Introductory Message
For the facilitator:

Welcome to the Applied Economics 12 Alternative Delivery Mode (ADM) Module on Explaining
the Effects of the Various Socio-Economic Factors affecting Business and Industry.

This module was collaboratively designed, developed and reviewed by educators both from public
and private institutions to assist you, the teacher or facilitator in helping the learners meet the
standards set by the K to 12 Curriculum while overcoming their personal, social, and economic
constraints in schooling.

This learning resource hopes to engage the learners into guided and independent learning activities
at their own pace and time. Furthermore, this also aims to help learners acquire the needed 21st
century skills while taking into consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the body of the module:

Notes to the Teacher

This contains helpful tips or strategies that will
help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this module. You also need to
keep track of the learners' progress while allowing them to manage their own learning. Furthermore,
you are expected to encourage and assist the learners as they do the tasks included in the module.

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For the learner:

Welcome to the ABM 12 Alternative Delivery Mode (ADM) Module on Understanding Social-
Economic and Socio-Economic Factors!

The hand is one of the most symbolized part of the human body. It is often used to depict skill,
action and purpose. Through our hands we may learn, create and accomplish. Hence, the hand in
this learning resource signifies that you as a learner is capable and empowered to successfully
achieve the relevant competencies and skills at your own pace and time. Your academic success lies
in your own hands!

This module was designed to provide you with fun and meaningful opportunities for guided and
independent learning at your own pace and time. You will be enabled to process the contents of the
learning resource while being an active learner.

This module has the following parts and corresponding icons:

What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in
the module.

What I Know This part includes an activity that aims to

check what you already know about the
lesson to take. If you get all the answers correct
(100%), you may decide to skip this module.

What’s In This is a brief drill or review to help you link the

current lesson with the previous one.

What’s New In this portion, the new lesson will be introduced to

you in various ways such as a story, a song, a poem, a
problem opener, an activity or a situation.

What is It This section provides a brief discussion of the lesson.

This aims to help you discover and understand new
concepts and skills.

What’s More This comprises activities for independent

practice to solidify your understanding and
skills of the topic. You may check the answers to the
exercises using the Answer Key at the end of the
module.

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 What I Have Learned This includes questions or blank
sentence/paragraph to be filled in to
process what you learned from the lesson.

What I Can Do This section provides an activity which will

help you transfer your new knowledge or
skill into real life situations or concerns.

Assessment This is a task which aims to evaluate your level of

mastery in achieving the learning competency.

Additional Activities In this portion, another activity will be given

to you to enrich your knowledge or skill of
the lesson learned. This also tends retention of
learned concepts.

Answer Key This contains answers to all activities in the module.

At the end of this module you will also find:

References This is a list of all sources used in

developing this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the module. Use a
separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities included in the
module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not hesitate to consult
your teacher or facilitator. Always bear in mind that you are not alone.

We hope that through this material, you will experience meaningful learning and gain deep
understanding of the relevant competencies. You can do it!

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 What I Need to Know

This module was designed and written with you in mind. It is here to help you master the nature of
Applied Economics. The scope of this module permits it to be used in many different learning
situations. The language used recognizes the diverse vocabulary level of students. The lessons are
arranged to follow the standard sequence of the course. But the order in which you read them can
be changed to correspond with the textbook you are now using.

The module is divided into two lessons, namely:

• Lesson 1 – Understanding Social-Economic and Socio-Economic Factors
• Lesson 2 – The effects of socio-economic factors affecting business and industry

After going through this module, you are expected to:

1. Understand social- economic and socio-economic;
2. Explained the effects of various socio-economic factors on business and industry

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 Lesson
Understanding Social-Economic and Socio-
1 Economic Factors

You have learned how to differentiate different terms used in economics in the past lesson. Now,
you will learn how to explain the effects of the various socio-economic factors affecting business
and industry.

What’s In

List down 10 factors (things, event, person or place) that you think can affect our self, household,

economy on venturing business. Write your answer on your sheet of paper.

What’s New

Anna want to eat Kimchi but she can’t buy foods on the markets because of the fear of this

pandemic. At first, she doesn’t trust online sellers especially when talking about food but because

she craved for the food because of watching K- dramas for a week and also, she can’t go outside

because of the pandemic so she decided to look on social media. While scrolling her Facebook, she

has seen that one of her friends sells kimchi online with free delivery near the area. So, she

messaged her friend and ordered her favorite food. In 15 minutes, her ordered food delivered. She

feels happy eating her favorite Kimchi without her going out.

How did the current situation change the behavior of Anna? Why did she choose to find it

online? How does the technology help her?

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 What is It

The first step to understanding what socioeconomic factors are is to understand social

economics. This is a specialized branch of economics that concerns itself with studying the intimate

relationship between economics and social behavior. Such things as ethics, social norms and

different social philosophies have an impact on how consumers behave in an economy and the

eventual shape that economy will take. The study of social economics seeks to predict what kind of

results to expect when the society has been changed. It does this by studying politics, history and

other social sciences.

Socio-economic factors are primarily the PEST – POLITICAL, ECONOMIC, SOCIAL, and

TECHNOLOGICAL FACTORS, these are the main factors that affects businesses an industry for the

next lessons.

Mostly used business tool by organization is the PEST Analysis. It is to discover, evaluate,

organize, and track macro-economic factors which can impact on their business now and in the

future. The framework examines opportunities and threats due to Political, Economic, Social and

Technological forces.

Political. Political or politically motivated factors that could impact the organization. It

includes government policy, political stability or instability, corruption, foreign trade policy, tax

policy, funding grants and initiatives, etc.

Economic. Economic trends, growth rates, industry growth, seasonal factors, international

exchange rates, international trade, labor costs, unemployment rates, taxation, inflation, interest

rates, monetary policies, raw material cost, etc.

Social. Attitudes and beliefs about a range of factors including money, customer service,

imports, religion, cultural taboos, health, work, leisure, the

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environment; population growth and demographics, immigration/emigration, life style trends, etc.

Technological. Technology and communications infrastructure, legislation around

technology, consumer access to technology, emerging technologies, automation, research and

innovation, technology incentives, etc.

These are the PEST analysis that provides an overview of all the crucial external influences

on the organization, supports more decisive and knowledgeable decision making, helps evaluate

how your strategy fits into the broader environment and encourages strategic thinking, assists

planning, marketing, organizational change initiatives, business and project development, project

management and research papers.

As we are now in the “new normal” norm some of our goods and services can be buy and

sell through online platforms such as face book, Instagram, Twitter and etc. Technology is major

factor that affects our behavior as consumer. Some are now having groups like Barter Community or

online selling stuffs thru this money are easily earned because of the numbers of prospect

consumers online.

Most demanded services and/or products through online is selling of home- cooked foods

like “Kimchi” or “Kimbop” (Korean foods) because Filipinos now a days are mostly a fan of Korean

dramas thus this new product were in demand and also with Korean fashions and beauty essentials.

Online sellers now are rapidly growing because consumers find it easy to buy stuffs because

of the free deliveries, free shipping fees or even decided to meet up on agreed places. It is the most

convenient way in exchanging services and goods.

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 What’s More

Explain. Look and observe around you. Why do people now a days hooked- up in online

selling? How did it change their social behaviors? What factors of the socio-economic been

affected? Write your answers on your sheet of papers.

What I Have Learned

In understanding social – economic and socio-economic factors, I must:

➢ Define social - economic;

➢ Determine various socio-economic factors; and

➢ Define the different socio-economic factors.

1. Social Economic - a specialized branch of economics that concerns itself with studying the

intimate relationship between economics and social behavior.

2. Various socio-economic factors are: Political, Economic, Social and Technological factors, etc.

3. Different socio-economic factors:

Political Factor – includes government policy, political stability or instability, corruption,

foreign trade policy, tax policy, funding grants and initiatives, etc.

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 Economic Factors – economic trends, growth rates, industry growth, seasonal factors,

international exchange rates, international trade, labor costs, un-employment rates,

inflation, etc.

Social factors – attitudes and beliefs about a range of factors including money, costumer,

services, religion, cultural taboos, health, work, leisure, environment, population growth,

lifestyle trends and etc.

Technological Factors – technology and communication infrastructure, legislation around

technology, consumer access to technology, emerging technologies, automation, research

and innovation, technology incentives, etc.

What I Can Do

Observe and site an example on a present situation where socio- economic

factor affects a specific market or economy. Explain with 500 words.

Assessment – Written Works

Explain the following. Write your answer in your piece of paper.

1. What government policies or political groups could be beneficial or detrimental to our

success?

2. What economic factors will affect us moving forward?

3. How do our customer’s belief and values influence their buying habits?
4. What technological advancements and innovations are available on the

horizon?

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 Lesson The Effects of Socio-Economic Factors

2 Affecting Business and Industry

What’s In

List down socio-economic factors that affects business in locality. Write your answers on your

answer sheet.

What’s New

Socioeconomic factors are, therefore, the social and economic factors that shape and

determine the dynamics a society will experience. These are factors that affect the behavior of a

particular group, also known as a socioeconomic class. Perhaps the most interesting behavior of

members of a socioeconomic class is their behavior as consumers. Different socioeconomic classes

will generally have different priorities, and this will affect how they spend their money. Various

socio- economic factors that impacted business and industry are primarily the PEST – POLITICAL,

ECONOMY, SOCIAL, TECHNOLOGICAL FACTOR, these are the main

economic factors that affect a business.

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As we are now experiencing Pandemic because of this COVID-19, how does it affect our health,

income and social aspect of life? Write down your answer in a paragraph form.

What is It

Understand the socioeconomic factors affecting business will help you make better

decisions about the future and direction of your business. To have an intimate understanding,

however, you will have to understand both external and environmental factors, as well as how their

interplay affects your business.

Environmental Analysis

This is a special term that refers to the process of looking at the external socioeconomic issues in a

business. It is considered a part of general business analysis, so it is useful to the executives of a

company. It can help them grow the organization, increase the streams of revenue the company

receives and also get ahead of competitors.

Socioeconomic Factors that may affect Businesses and Industry

Economic factors are an essential part of all business analysis, no matter whether it is PEST analysis,

PESTLE analysis, or any other kind of business analysis. These are the main factors considered when

a company makes financial decisions.

These factors are connected to money, goods and services. They affect businesses on a micro-level,

but they are a lot more powerful than that – they also affect the entire economy on a macro-level.

The economy, whether a local economy or a global one, will pretty much be the determining factor

in the details associated with the

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operation of a company, such as the value of its assets, consumer demand and even taxes.

Some economic factors you must think about in your business include exchange rates, interest rates,

recession, inflation, taxes, and demand and supply. Here is a closer look into three of these factors

and their connection to businesses.

Interest Rates

Interest rates are everywhere, and are imposed by many different people. In fact, banking

institutions are obsessed with knowing what the status for interest rates in the economy is for a

good reason. It is how they determine their lending practices. It is also good information for a

company that relies on debt capital to finance ambitious projects.

Exchange Rates

This is a slightly more nuanced topic than that of interest rates. At the heart of it, exchange rates are

an important factor to consider for any business involved in importation and exportation of various

goods and services. When exchange rates fluctuate, they affect the ability of a company to pay its

international suppliers in a satisfactory manner. This can also affect the profit margin of the

company, as well as the amount of resources it needs to stay afloat.

Recession

Whenever an economy faces a recession, it has the potential to change the attitude taken by

consumers toward their purchasing decisions. This may force companies to drop prices to stay

afloat.

In addition, Socioeconomic factors not only affects business and industry but of Health and

Education. The health of a person or people, in general, is to a great extent determined by the

environment as well as their circumstances. It affects

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the social status and income of the household or the person, educational level,

physical environment and etc. Socioeconomic status is not based solely on

income. There are a slew of other things, such as education level, financial

security, and the perceived social class and status of the individual. Along with

the quality of life enjoyed by the individual, consider the privileges and

opportunities gained as a result of this socioeconomic status.

Furthermore, these examples of socioeconomic factors not just affect small

business but also affects our industry as a whole: capital, income, tax and

revenues, investors and suppliers, households, and even international trade are

subject to fluctuate or to increased.

What’s More

In the new normal era, trend now is the online selling with small business like selling of

home-cooked food, pre-loved clothes, beauty essentials and many others. How this affects our local

economy and household income? Explain your answer in your sheet of paper.

What I Have Learned

I have learned to define the following:

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 1. What are the socioeconomic factors that affects businesses? List down 3 factors.

(Political, Economic, Social, Technology)

2. What are the other aspects that are affected by socioeconomic factors?

List down 2 aspects. (Health, Education)

3. How can one socioeconomic factor affect business and industry? Explain your answer.

What I Can Do

Given that we are now facing pandemic, what do you think can be the biggest

socioeconomic factor that will greatly affect business and industry? Explain your answer.

Assessment – Performance Task

Write T if the statement is true and F if the stamen is false.

1. Socio-economic is a branch of economics that concerns with the relationship of economics

and social behavior.

2. The study of social economics predicts what kind of result to expect when the society has

been changed.

3. Different socioeconomic classes will have different priorities and this will affect how they

spend their money.

4. Businesses and industry will continue growing even without understanding the socio-

economic factors.

5. PEST analysis are the main economic factors that affect a business.

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 6. If recession happened to a specific company the prices of their product will increase.

7. Pandemic affects our social behavior.

8. Tax and revenues are stable in this pandemic times.

9. Demand will increase in this time of pandemic that leads to scarcity.

10. Business and Industry are affected by social behavior.

References
K to 12 Curriculum Guide in ABM.

Google.com – Applied Economic

Pestle Analysis: PESTLE Analysis: Economic Factors Affecting Business

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