The Social Impact On A Business Commerce Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The Social impact on a business can affect the business both negatively or positively; it involves full engagement with both the business operators and the public (customers). Social impact is a critical part of business, because without a social understanding, neither the business nor the community or society in which it operates will thrive. In fact, the social impact is becoming increasingly more important as private businesses increase in size and public pressures intensifies for corporations to address pressing, social and environmental concerns.

Service quality is a term which describes a number of expectations with performance in a business; and without an individual being able to relate to their customers socially in an effective way, this will not enhance the upliftment of the business. The absence of a good social environment in a business will result in poor customer service thus the business fails.

A customer's expectation of a particular service is determined by many factors such as politeness, respect, consideration and friendliness. Considerations for the customer's property and a clear and neat appearance of the contact personnel place great emphasis on the business environment. Trustworthiness, belief and honesty are great factors contributing to the credibility of a business.

The social impact on a business interrelates the relationship between management and employee as well as the employee and the customer. If an employee in unable to relate socially then this will definitely post a problem on the business and its environs negatively. In other words, there are social impacts of a business, as well as social impact on a business.

Population trend is also a type of social change that determines a business climate. Population trend can affect the number of people available for work, such as an ageing population in which a greater proportion of the population is over retirement age; and distribution of income between regions, age groups or gender, such as an increase in the level of persons, since the sector of the population that has the highest general income level is likely to create the greatest demand for goods and services. Social changes such as a trend towards a healthier lifestyle, increased leisure time, or attitudes towards the environment and conservation also affect the activities of business and the types of goods that are in demand. (Nuttall, 2003).

Competitive environments

Competitive environment in business results in other businesses striving to achieve much more in terms of service quality, value for money and meeting customers' needs.

Improved service quality may increase economic competitiveness in business; a business with good service quality will meet customers' needs while remaining economically competitive. A competitive business requires strong team work and dedication in order to strive.

Economic environment

Economic conditions impact all businesses, though small businesses often feel the effect of economic changes faster than their larger counterparts. Upswings in the economy typically provide a rush of new or expanded business opportunities for small operations, whereas a downward economic cycle can have a severe and lasting impact.

In a strong economy, nearly all businesses enjoy greater prosperity. Income is higher, unemployment is low and consumer confidence encourages people to pump their money back into the economy through the purchase of essential and nonessential goods and services. The impact of a strong economy on a small business is two-fold, as business increases, so too does the need for a small business to keep pace with demand by hiring additional employees, expanding retail space or adding new product lines. While a strong economy may be viewed as positive, the downside is that if the economy starts to falter, many small businesses will find themselves over extended, which can result in mass layoffs and business failures.

During an economic slowdown, many small businesses face a number of challenges. Consumers become concerned about their job stability and thus become careful with how their money are being spent, which leads to decreased revenue/ money for small business owners. A slow profit stream can make it difficult for a small business to repay creditors, which can negatively impact its long-term viability. A business facing financial struggles is far less likely to qualify for loans for capital expenditures and operations, which limits growth opportunities. Many small businesses also are forced to downsize their workforce during a slow economy. This limits their ability to serve customers and contributes to decreasing the unemployment rate of the country, which further slows down the economy.

Some types of small businesses thrive in a slow economy. For example, companies that are involved in facilitating home foreclosures, vehicle and property repossessions find their businesses on an upswing during a slow economy. Additionally, small business owners with solid and substantial financial backing may see an increase in expansion opportunities by buying out their struggling competitors or absorbing the customer bases of out-of-business competitors.

Small businesses have an advantage over large businesses when it comes to adapting to economic swings. Small businesses typically have a smaller decision-making base in terms of leadership. Whereas a large company may need to call numerous stockholder meetings to discuss changes in business strategy and direction, a small business is much more nimble in the decision-making process. Typically, a small business can make faster decisions to change course, increase or decrease workforce or product offerings or significantly change the company image to adapt to a changing economy.

Technological environment

A technology developed business environment will present great efficiency in carrying out daily business activities and ensuring the smooth sailing of planned objectives by a company.

Perhaps the greatest amount of change in recent years has been in technology. The development of computers and computer-controlled machinery, the internet, and mobile telephones have all had a major impact on business. Computers and computer-controlled machinery increase productivity and reduce costs, while the internet and mobile telephones mean that a business can keep in touch with employees even when they are away from their base. The internet has also provided business with new opportunities for promoting and selling their products. (Nuttall, 2003).

Business technology has revolutionized the way companies conduct business. Small businesses can implement business technology and level the playing field businesses with larger organizations. Small businesses use computers, servers, websites and personal digital products to develop competitive advantages in the economic marketplace. Small business owners should consider implementing technology in their planning process which will allows owners to create operations using the best technology available technology. (Osmond Vitez - Demand Media).

Small business owners can use technology to reduce business costs. Business technology helps automate back office functions, such as record keeping, accounting and payroll. Many types of software programs are user friendly. This allows business owners with a minor background in information technology to use computer hardware and software. Technology has features that can help small businesses to improve their communication processes, such as emails, texting, websites and personal digital products applications that can help companies improve communication with consumers. Using several types of information technology communication methods allow companies to saturate the economic market with their message. Companies may also receive more consumer feedback through these electronic communication methods. These methods also allow companies to reach consumers through mobile devices in a real- time format.

Technology functions in a way to increase small businesses employees' productivity through its usage. Computer programs and business software usually allow employees to process more information than manual methods. Business owners can also implement business technology to reduce the amount of human labor in business functions; this allows small businesses to avoid paying labor costs along with employee benefits. Business owners may also choose to expand operations using technology rather than employees if the technology will provide better production output.

Technology allows small businesses to reach new economic markets .Rather than just selling consumer goods or services in the local market; Small businesses can reach regional, national and international markets. Retail websites are the most common way small businesses sell products in several different economic markets. Websites represents a low-cost option that consumers can access on a twenty four hour basis when needing to purchase goods and services. Small business owners can also use the internet advertising to reach new markets and customers through carefully placed web banners and ads.

Business technology allows companies to outsource business function to other businesses in the national and international business environment. Outsourcing can help company's lower costs and focus on completing the business function they do best. Technical support and customer service are two common functions companies outsource. Small business owners may consider outsourcing function if they do not have the proper facilities or available manpower. Technology allows businesses to outsource function to the cheapest areas possible, including foreign countries. (Morden, 2004)

Legal environment

Increasing legistration is introduced to protect the interests of consumers (consumer protection legistration) and employees (employment legislation, including health and safety regulation), and to ensure that business activity does not harm the environment (environmental legislation). Such legislation is intended to ensure that business behave in a socially responsible way rather than to place unnecessary constraints on them.

Political environment

Political environment include government attitudes and policies on business and trade. The attitude of a government will influence its policies. For example, a government that favors private enterprise and competition is more likely to introduce measures that deregulate business, allowing it a large measure of self-control; while a government that feels business activity should be controlled by the state for the benefit of society will introduce more intervention in business activity.

A political environment can affect a business either positively or negatively depending on the prevailing situation in a country. It mainly forms the external factors which are part of the macro-environment and whose control is beyond the ability of human beings.

These factors depend on the way politics are conducted in a country, which directly reflects on what is happening within the government. This means that a democratic country will accord freedom to its people to vote for a government that has their interests at heart thus business will thrive owing to the good policies implemented.

On the other hand, an autocratic government will not get the respect of its citizens leading to economic as well as political instability and uncertainty. Even though such a government remains in power, businesses suffer a lot since they are not sure of their future underlining the importance of a democratic government to a country and business.

It is needless to say, that once a country is stable, more investment opportunities will be realized thus attracting more and more investors. This will reflect positively and directly to the local businesses, as even the citizens will have full confidence with them.

In the politics of the day, business success depends on politics by a great percentage and in many ways. Politicians are usually the people controlling the operations of a government and will decide which countries to trade with as well as the trading conditions.

This means that if a certain business or its owners are not in good terms with the politicians then they will have to suffer. Furthermore, the rules that govern and regulate the manner in which trade is conducted are enacted by the politicians thus it will call for good relations between stakeholders in the business sector and politicians even if it's impossible just for success.

Table of Contents


Social impact on business organizations 1

Competitive environment on the business organizations 2

Economic impact on the business organizations 3-4

Technological environment on the business environment 5-6

Legal impact on the business environment 7

Political impact on the business environment 8-9

Mission statement 10

Objectives 11

Strategies and Tactics 12-13

Milestones 14

Marketing Objectives 15

Marketing Strategies 16

Communication Objectives 17

Communication Strategies 18

Financial and Budgeting 19

Reference 20