Contemporary Socio-Economic Issues in Business

Economic crime

known as white collar crime and committed in business for personal financial gain, e.g. fraudulent transactions.

Ethical conduct

acting in ways that are consistent with a person's values of the organisation and society.

Copyright

exclusive right given to the creator of an original work.

Corruption

This involves dishonest activities in which a person entrusted with authority in a business abuses his/her position of trust in order to achieve some personal gain.

Dumping

It is when other countries dump their excess products on the SA market to dominate the local market.

Inefficient use of natural resources

wasting of scarce resource through negligence or incorrect production methods.

Industrial action

action taken by employees when their demands are not met by their employer.

Inflation

a general increase in the prices of goods and services.

Population growth

percentage change in the population resulting from births, deaths and migration.

Strike

refusal to work by two or more employees in an effort to pressurize employers to give in to their demands.

Sexual harassment

Involves unwelcome or unwanted attention of a sexual nature from someone at work that causes discomfort, humiliation, offence etc that interferes with the job.

Piracy

Unauthorised use/reproduction or copying of original music, films, books or computer software, patent rights and trademarks without the consent of the rightful owner.

Patent

exclusive right granted for a new invention.

Trade mark

A symbol, word, or combination of words legally registered by use as representing a company or a product.

Workplace forums

Representative of employees in a business of 50 employees upwards who are delegated to act on behalf of employees within the business.

Inflation

General increase in the prices of goods and services in the country.

Retrenchment

Involuntary ending of a service contract of an employee by the employer due to operational requirements.

Trade union

An organized association of workers in a trade, group of trades, or profession formed to protect their rights and interest.

Lock-out

When the employer keeps their employees from their places of work until certain terms of a negotiation are agreed upon.

Industrial action

These are actions that include strikes or go slows.

Strike

A work stoppage as a form of protest or to strengthen one's bargaining position.

Socio-economic issues

Societal issues that may have a negative impact on businesses.

Low income levels

South Africa has one of the greatest inequalities in income in the world due to the largest differences in salaries between high earnings and low earners.

Negative impact of low income levels

Leads to a decrease in the demand for goods and services resulting in a fall in turnover and lower profits for businesses.

Poverty

Can lead to crimes such as shoplifting and robberies.

Consumer spending

Limited consumer spending due to low income levels prevents businesses from growing and prospering.

General increase of prices

Inflation refers to the general increase of prices, increasing fall in the purchasing value of the money.

Rising inflation

Causes consumers to spend less because they have less disposable income.

Costs of raw materials

Inflation increases the costs of raw materials and other inputs.

Optimum productivity

Businesses have to produce the maximum possible output using the least possible input.

Decreased sales

Decreased consumer spending results in decreased sales and profitability.

Retrenchment of employees

May increase unemployment and decrease buying power even further.

Business sales

Will decrease because of reduced consumer spending in goods and services.

Production costs

Business will have less money to spend on producing goods if the cost of raw materials increases.

Reduced sales figures

Could lead to the businesses implementation cost saving model.

Social factors

Have an impact on the market environment because they shape the way people live/work/produce/consume.

Cultural factors

Influence the market environment by affecting consumer behavior.

Demographic factors

Defined as the characteristics of the population of a country, e.g., age distributions, the gender ratio, and the racial composition.

Diverse population

Characterized by different race groups, religions, and creeds.

Consumer behavior

Different groups of people with different cultures will behave differently as consumers, affecting marketing strategy and sales.

Cultural trends

Create different kinds of consumers which may result in the reduction of sales for existing products.

Market share

Businesses may lose their market share if they do not keep abreast with current trends.

Consumer preferences

Businesses need to accommodate the preferences of a diverse consumer body to increase sales.

Economic crime

Also known as white collar crime, includes unlawful use of money that does not belong to a person, classified as fraud.

Money laundering

Money gained through unlawful business dealings covered up under a shell company.

Intellectual skills and deception

Key features of economic crime where money is stolen from a business.

Loss of income

Occurs if money is stolen from a business.

Job loss

Can happen if a business closes down due to economic crime.

Investor confidence

Decreases due to economic crime, resulting in poor economic and business growth.

Cyber security

Poses a huge challenge for businesses that advertise their products on the internet.

Population growth

Refers to the number of people in a country and occurs when births exceed deaths.

Percentage change in population

Resulting from births, deaths, and migration.

Unemployment and crime

Excessive population growth increases these issues.

Municipal and health services

May become expensive, resulting in consumers having less money to spend.

Agricultural land

Decreases as more land is used to build houses due to population growth.

Financial strain on businesses

As the population grows, businesses are challenged to meet consumer demands.

Illiteracy

Refers to a person who cannot read or write.

Job requirements

Many jobs require reading and writing skills, making it difficult for illiterate people to find work.

Illiteracy

The inability to read or write, which negatively impacts businesses by making it difficult to market products and enter into written contracts.

Financial loss from training

The cost incurred by businesses when training employees who lack the correct skills, leading to financial strain.

Workplace accidents

Incidents caused by employees without the correct skills, which can harm the business's image.

Difficulty in marketing

Challenges faced by businesses in promoting products to individuals who cannot read or write.

Employment disadvantage

The struggle of individuals with little to no literacy skills to find employment or learn new skills.

Educational contributions

The financial support businesses may provide towards educational programs to mitigate the effects of high illiteracy levels.

Unemployment and illiteracy

The strong correlation between high unemployment rates and illiteracy, as businesses cannot hire individuals who cannot read or write.

Lack of skills

A situation where there is a shortage of qualified candidates in fields such as education, medicine, engineering, and finance.

Poor product quality

The result of businesses hiring candidates who lack necessary skills, leading to inferior products and services.

Cost of training

The financial burden on businesses to train employees, which can affect productivity as new hires take time to learn their roles.

Expensive labor

The increased costs businesses face when recruiting skilled candidates from abroad.

Assistance for unskilled workers

The time spent by skilled employees helping unskilled workers, which can reduce overall productivity.

Errors from unskilled labor

Mistakes made by unskilled employees due to lack of knowledge, leading to the need for task repetition or correction.

Skills development budget

The increased financial allocation businesses may need for training programs to develop employee skills.

Unavailability of natural resources

The scarcity of essential resources like oil, coal, water, and gold, which can hinder business operations.

Resource depletion

The reduction of natural resources due to uncontrolled usage, threatening future supply.

Electricity shortage

A consequence of coal unavailability, leading to power failures that cost businesses millions.

Impact of oil scarcity

The effect on businesses due to lack of transport caused by limited oil availability for fuel manufacturing.

Production processes

The operations of businesses that are negatively impacted when the supply of natural resources is threatened.

Non-renewable resources

Natural resources like oil and coal that, once depleted, cannot be recovered.

Alternative resources

Other sources of natural resources that businesses must seek to maintain production, potentially increasing operational costs.

Inefficiency in resource use

A situation where resources are wasted, leading to depletion and threatening future supply.

Population growth and resources

The increased consumption of resources as the population expands.

Maximum output

The highest possible production level of goods and services that can be achieved with available resources.

Operational continuity

The ability of businesses to maintain operations, which is jeopardized if natural resources are depleted.

Loss of productivity

If business operations come to a halt due to unavailability of natural resources.

Reduced production levels

May lead to a drop in sales and profitability.

Unused stock

Can become obsolete, increasing losses for businesses.

Exhaustion of natural resources

Refers to the over-use of natural resources leading to exhaustion.

Resource depletion

Occurs mostly in relation to farming, mining and fossil fuel.

Supply and quality decline

The supply and quality of natural resources may decline.

Scarcity of natural resources

Some natural resources may be scarce and possibly be exhausted in future.

Dumping

When goods enter South Africa from other countries at a price that is cheaper than the normal value of the goods because more was produced than what that country can use.

Dumped products

Are usually cheaper than South African products.

Exporting at lower prices

Occurs when a country or company exports a product at a price that is lower in the international importing market than the price in the exporter's local market.

Loss of profits due to dumping

Some local producers cannot compete with cheaper prices.

Revenue loss from dumping

Businesses may lose revenue and be forced to shut down their operations.

Decrease in local production

Can lead to a decrease in local production and loss of jobs.

Strikes

A collective, organised stopping of work by employees to force their employers to accept their demands.

Labour dispute

Strikes are usually the result of a labour dispute and it takes place when employees refuse to work.

Reasons for strikes

Include wages, working hours and working conditions.

Impact of strikes on investors

Strikes scare off potential investors.