http://www.ourtimebd.com/beta/2019/08/31/no-study-on-socio-economic-impact-of-business/

No study on socio-economic impact of Business

Published Time: August 31, 2019, 12:01 am

Updated Time: August 30, 2019 at 10:44 pm

M S Siddiqui writes for DOT

Businesses are always been part of society. They should be seen more as the locus of productive

activities that must be harnessed for the greater good of society as a whole. Understanding their social

impact is an essential step in that process.

There is a global negative publicity about business activities particularly in the developing countries

where the left politics frame the idea of the society and economy with free distributed or low cost

political theory books of communism. A fair study can mitigate the risk of negative publicity.

Governments, inter-governmental organizations, civil society groups, social investors, ethical

consumers, shareholders, and employees are increasingly interested in business’ socio-economic

impact. Some are sceptical, and they want proof that companies are at least doing no harm. Business

has all the stakeholders such as employees, customers, suppliers, distributors, retailers, and

neighbours, their growth and well-being matters to the bottom line of the business activities.

Business organizations have wide-ranging socio-economic impact in the society from creating

products and services. These impacts are stemming from consumption of the products and services,

policies and practices in their own operations and along the value chain. They are also involved in

infrastructure development investments and tax payments, philanthropic initiatives, and others.

The major impact is creation of employments including training employees giving livelihood to the

citizens. The creation of demands and supply of products and services and up gradation of standard of

living is the indication of national development activities. The educations, skill development, transfer

of technology are another major contribution of business ventures. The infrastructure for living,

market, entertainment parks and other facilities are part of the life of citizens. The health care and

education require huge investments and this is now almost in the private sector. Business are

expanding opportunity and access to products and services ranging from food and healthcare to

energy and information technology, companies affect people’s assets, capabilities, opportunities, and

standards of living – sometimes positively, sometimes also negatively.

A sustainable business is also concerned for the labor practices and working conditions for employees

with healthy work environments. The sustainable business’s social impact would include such items

as the business’s practices and policies related to working conditions, diversity in hiring, opportunities

for advancement for women and minorities, lack of discrimination, and the provision of affordable

health care and other necessary benefits. In addition, social impact includes wages, breaks, adherence

to employment laws, safety, training, and numerous other specific labor practices. Above all, social

impact includes the impact on the citizen and social services sector as a result of the business’s

activities.

The sustainable business is not only expected to treat its employees in a responsible manner but also

ensure that it is engaged with suppliers that share similar values. The business also should know the

impact on other stakeholders such as small traders, suppliers, and support businesses. These

stakeholders have contribution to the growth of big business. They should measure the loyalty,

performance, stability, and capacity for growth of suppliers, distributors, and retail partners –

identifying vulnerabilities and opportunities to address them. When sourcing products from outside an

industrialized country, some sustainable businesses will seek fair trade products. Fair Trade

certification verifies that living wages were paid to producers and that fair and ethical employment

practices were used in the creation of products.

The supply chain should make sure that the supplies and products they purchases were produced

responsibly and ethically. Sustainable businesses will make reasonable efforts to ensure they are not

purchasing from suppliers engaged in the use of sweatshops, child labor, or other human rights

abuses. In some cases, businesses have worked diligently with suppliers to correct these problems,

while in other cases businesses have chosen to change suppliers. This entails the respect of individuals

and other businesses encountered locally and around the world.

A sustainable business will make reasonable efforts to ensure its policies, practices, products,

advertising, logo or mascot, and other aspects of the business are not offensive or disrespectful to

clients in the global market.

The social impacts of any action are much easier to identify than measure. At its broadest, social

impact includes anything that affects company-stakeholder relationships: from how much and how

reliably suppliers (retailers) are paid, to how a product (alcohol etc) affects health and lives. From

how small shareholders are affected of monopoly at market. The business should be also sustainable

and viable to serve long run keeping in mind the social impacts.

There aresome practices that will help measure social impact: (1) Review the 10 principles of the

United Nations Global Compact and abide by them, whether or not the business becomes a signatory.

The Ten Principles of the United Nations Global Compact are derived from: the Universal

Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental

Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United

Nations Convention Against Corruption. (2) Seek out opportunities to purchase Fair Trade products as

input of business. Bangladesh is familiar with fair trade clothing with labor standard and working

conditions etc. Other products such as: handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton,

wine, fresh fruit, flowers, and other products some standards of fair trade. (3) Evaluate philanthropic

programs and the impact of such programs. (4) Proper use of fund for Corporate Social Responsibility

(CSR).

Measuring socio-economic impact can help companies understand the needs, aspirations, resources,

and incentives of their customers – enabling them to develop winning new products and services and

improve existing offerings. To what extent are our business activities contributing to local, national,

or international public policy goals? Whether they are aware of the negative impacts, if any? How the

business activities contributing to the society with the products and services?

The employees are also inspired by the positive outcome of their activities and livelihood. The

challenge is therefore to find and focus on socio-economic impacts related to business performance.

In the recent time, the mobile operators in Bangladesh measures the socio-economic impacts of

mobile phones in order to inform dialogue with governments on regulatory frameworks that foster

innovation and growth in the industry.

Socio-economic impact measurement can also help business, government, and civil society design

more effective collaborations by providing insight into the value it is possible to create and the roles

the different partners can play in creating it. The researcher and policy makers may initiate study on

such important issue on local businesess.

The writer is a Legal Economist.