Unit 7: Socioeconomic Impact Study on Industries and Businesses

7.1. Socioeconomic Impacts of Business on Consumers,

Suppliers, and Investors

Let’s Connect
1. Did your major life decision not involve anyone apart from yourself? No.
2. Could you have made your decision without taking into consideration the different
people you identified earlier? No.
3. Did any of the people you identified appear both in the lists for steps two and three?
Answers may vary. Yes, some of the people in my life were both affected by and
had an impact on the decision that I made.

Check Your Progress

1. Provide two examples of external stakeholders that were not previously mentioned.
Answers may vary. One example of an external stakeholder would be the
competitors of the business. Another would be the non-government organizations
(NGOs) that are relevant in the industry.

Try This!
A. True or False. Write true if the statement is correct. Otherwise, write false.

False 1. The primary focus of investors is getting their money back with no loss
or profits.

False 2. Stakeholders are external parties that firms need to keep in mind
when making business decisions.

True 3. The success of suppliers and businesses are interdependent.

False 4. The assumption of utility maximization says that humans are likely to
spend a significant amount for a minor increase in satisfaction.

True 5. Consumers are affected by firms through the different strategies the
latter employs to encourage them to purchase their products.

7.1. Socioeconomic Impacts of Business on Consumers, Suppliers, and Investors 1

 Unit 7: Socioeconomic Impact Study on Industries and Businesses

False 6. Recent trends show that consumers react negatively to appeals to

emotion used in advertisements.

False 7. Shareholders cannot also be stakeholders of the same firm.

False 8. The only consideration firms make when choosing their suppliers is
the prices that they are able to offer.

False 9. For someone to be considered a stakeholder, they must have a

financial interest in the business.

True 10. Lower costs do not necessarily mean better value.

B. Identification. Read each of the following situations and identify whether the party in
bold is an internal or external stakeholder of the business in italics.

Internal 1. Roy was recently hired to work as a warehouse clerk for AAA shipping
company.

Internal 2. As a recently opened bakery, JMB’s Baked Goods is looking for more
investors after successfully landing Jay as their first backer.

External 3. Deuce’s Butchery is working hard to fulfill the order put in by the OOO
fast-food chain.

External 4. The VVV Sunday Market is a popular stop for families on the weekends.
The Dominguez clan often spends their afternoons there.

Internal 5. Rico is working his way up the ranks to become a division chief in the
LOL department store chain.

7.1. Socioeconomic Impacts of Business on Consumers, Suppliers, and Investors 2

 Unit 7: Socioeconomic Impact Study on Industries and Businesses

Challenge Yourself
1. Would you argue that influencing the consumer’s behavior is unethical in nature?
Answers may vary. No, it is not unethical so long as firms are truthful to the
consumers about what their product offers. If there is no lying or deception involved,
then it can be argued that what they are doing is fair.
2. Of the three types of stakeholders tackled so far (consumers, suppliers, and
investors), which of them do you think is most affected by the decisions of a
business?
Answers may vary. Students may choose a different stakeholder. Consumers
are most affected because all the decisions and strategies made by firms typically
revolve around convincing more and more consumers to purchase their goods and
services. Given that they are the main targets, they are also likely to be affected the
most by these firms.

7.1. Socioeconomic Impacts of Business on Consumers, Suppliers, and Investors 3