CONTEMPORARY SOCIO-

ECONOMIC ISSUES

BUSINESS STUDIES
GRADE 10
 WHAT IS IT?

• ASPECTS THAT HAVE A NEGATIVE EFFECT ON INDIVIDUALS, BUSINESSES AND

COMMUNITIES.
• SOCIETAL AND ECONOMIC FACTORS(MACRO ENVIRONMENT)
• EG: INEQUALITY, POVERTY, HIV/AIDS, INCLUSIVITY, GAMBLING,
STRIKES,BOOTLEGGING, POLITICAL INSTABILITY AND CRIME.
• WHY THEY POSE A CHALLENGE FOR BUSINESSES:
- CUSTOMERS HAVE LIMITED DISPOSABLE INCOME = CANNOT SUPPORT
BUSINESSES.
- EMPLOYEES WITH HIV/AIDS WILL BE ABSENT = AFFECTS PRODUCTIVITY.
- BOOTLEGGING + CRIME = LOSS OF PROFITS FOR THE BUSINESS.
- CSR: BUSINESSES MIGHT FEEL PRESSURED TO CONTRIBUTE/HELP
COMMUNITIES WHICH CAN SOMETIMES LEAD TO INCREASED BUSINESS
COSTS AND A DECREASE IN PROFITS.
 POVERTY & INEQUALITY

• INEQUALITY:
- SOME INDIVIDUALS ARE MORE PROSPEROUS THAN OTHERS.
- GIVEN BETTER OPPORTUNITIES.
- SOME HAVE MORE MONEY AND CAN HAVE ACCESS TO BETTER RESOURCES.
- CONTRIBUTES TO POVERTY.

• POVERTY:
- LACK OF RESOURCES TO MEET BASIC HUMAN NEEDS.
- WHEN PEOPLE BECOME UNEMPLOYED OR RETRENCHED, THEY CANNOT AFFORD TO
MEET THEIR NEEDS= POVERTY.
- LOW LEVEL OF EDUCATION + SKILL = LOW PAYING JOBS.
- INCREASE IN CRIME.
 IMPACT OF INEQUALITY AND
POVERTY

• Individuals and customers have less or no money to spend to buy basic goods and services which
will influence the profitability of business.
• • Poverty results in the continuation of the cycle of unemployment and homelessness which can
lead to an increase in crime affecting businesses negatively.
• • Some people do not have the financial means to buy goods as they have little to no disposable
income leading to limited profitability of the business as a result of limited or no customer
spending.
• • Limited customer spending means that businesses record lower sales figures.
• Businesses may not grow because of reduced sales figures.
• • Businesses are pressurised by the media attention to poverty into investing in poor communities.
 INCLUSIVTY
• EVERYONE SHOULD HAVE EQUAL ACCESS TO OPPORTUNTIES.
• REGARDLESS OF RACE, GENDER, RELIGION, SEXUAL ORIENTATION AND EDUCATION.
• It aims to address imbalances such as businesses only employing male staff members in management
and top positions – a practice that was prevalent before the onset of democracy.
• It also aims to address discrimination of persons based on gender and disability
• The goal of inclusivity is to ensure that the business implements fair labour practices.
• It seeks to redress the inequalities of the past.
• Ensure that workplaces are created where people of different races, genders and religions can work
together to the benefit t of the business.
• Ensure that their workforce is representative of the demographics of the country.
• Try to ensure that the physical business setting makes provision for individuals with disabilities.
 HIV/AIDS

• INCREASED ABSENTEEISM.
• REDUCED PRODUCTIVITY.
• INCREASE IN STAFF TURNOVER DUE TO EMPLOYEE
DEATHS.
• ADDITIONAL EXPENSES= TRAIN AND HIRE NEW
EMPLOYEES.
• LOW MORALE DUE TO COLLEAGUES ILL HEALTH.
 GAMBLING

1) PYRAMID SCHEMES:
- Pyramid schemes refers to businesses that may potentially yield high revenues for people who invest their money
in them.
- Individuals invest more and more money, but often only the individuals at the top of the pyramid receive large
sums of money.
2) ILLEGAL GAMBLING:
- unlicensed businesses offer gambling to the public.
- Illegal gambling activities can also take place in poor communities such as when people play with die (dices) on
street corners for money, or when individuals frequent unlicensed casinos.
3) MONEY LAUNDERING:
- the process by which unlawful profits from crimes are invested in valid businesses to cover up their wrongdoing.
- The source of money is camouflaged and made to seem as if it was lawfully gained.
 IMPACT OF GAMBLING

• Employees who gamble themselves into financial difficulties may be absent from
work regularly.
• Employees who gamble compulsively may adhere strictly to their working hours
only and be unwilling to work overtime hours when required.
• The consequences of regular gambling may disrupt the work setting due to staff
absenteeism and potentially unproductive employees.
• Individuals losing cash can display lower morale levels at work and this will
influence their work relationships and responsibilities.
• The employees may suffer from depression and thereby not be able to focus on
their work tasks and responsibilities.
• Gambling, such as money laundering, promotes corruption in businesses.
 PIRACY

• Illegal copying or reproduction of someone’s products.

• Illegal copying of music, videos, movie's or computer programs and trademarks registered by another
company.
• IMPACT:
- Decline in sales
- Price adjustment strategies
- Spend money on legal action

• METHODS OF DEALING WITH PIRACY:

1) Copyright:
- Businesses can sue someone who infringes on their copyright.
- Take legal action.
 PIRACY
2) Patent:
- Businesses can take out a patent for new inventions and include a sample of their invention with application.
- Businesses must register a patent with the patents office in South Africa. •
- The invention must comply with the Patent Act No. 57 of 1978.
- A patent prevents other businesses/people from producing or selling the same product/specific service.
- They can bring legal proceedings against anyone who uses their invention.

3) Trademarks:
- Businesses can use trademarks to identify themselves and their products.
- They must register their trademarks with the register of trademarks at the companies and intellectual
property registration.
- A registered trademark is protected forever, provided it is renewed every ten years and a renewal fee is
paid.
- A registered trademark may not be used by another person/business.
- Damages may be claimed from someone who infringes the trademark.
 COUNTERFEITING

• The process of fraudulently manufacturing, altering, or distributing a product that

is of lesser value than the original product.
• Losses are incurred by businesses of the original product leading to an increase of
prices.
• Example of counterfeited goods: branded clothing, shoes and soccer jerseys.
• IMPACT:
- Decline in sales
- Legal costs
- Increase in prices
- Reduced profits
 BOOTLEGGING

• Unlawfully manufacturing fake goods for sale.

• It also refers to the recording of live or broadcast performances without the
permission of the performers and copyright holders.
• Examples of bootlegging include fake Nike sneakers or fake Ray Ban sunglasses
sold by vendors at the beach.
• IMPACT:
- Loss of sales
- Lower profits
- Legal costs
 STRIKES

• A strike occurs when employees refuse to work, usually to petition a specific issue.
• A strike is usually the result of a dispute, such as employee grievances or the fear of being
retrenched in the workplace.
• The most common reason workers usually go on strike are for higher wages or better working
conditions.
• The trade union must give notice to the employer when planning a strike.
• There are different types of strikes, for example, go-slows and lockouts.
• IMPACT:
- Production and sale losses
- Business might be forced to close until strike has ended
- Damage to property
 POLITICAL DISTURBANCES

• Occurs when groups of people voice their objection to show their disapproval of the handling of
different situations in the country.
• People may protest because of the lack of service delivery in a specific area where they live and they
may feel that government is not doing enough to solve, for example, the issue of unemployment in the
country.
• Protests at universities about the slow rate of transformation and the exclusion of poor deserving
students is an example of political disturbances that can occur.
• IMPACT:
- High numbers of absent staff
- Lower productivity
- Roads blocked = businesses have to close
- Damage to property
- Eg: Looting
 VIOLENCE

• Violence may be defined as an extreme physical force exercised over someone to cause severe injury and grievous
bodily harm or damage to property. •
• Violence may be caused by misunderstandings and frustrations of people due to living in poverty.
• It poses a threat to individuals, businesses and communities because of injuries to people and damages to business
premises that may occur.
• Individuals, families and communities will suffer from fear of attacks, for example, looting, xenophobic attacks,
cash in transit heists and car hijackings. •
• In order to protect their families, property and businesses, people respond to the threat of violence by taking
extreme security measures.
• Violence may occur during or as a result of a strike action, a march or demonstration when some protesters
become unruly and loot businesses.
• IMPACT:
- Low production
- Increased costs for security
- Increased absenteeism
 CRIME

• Crime is any prohibited activity that is punishable by law.

• Crime refers to the loss of goods due to theft, corruption, abuse, hijackings and
burglaries.
• It can also refer to the loss of goods due to theft, corruption, abuse, hijackings and
burglaries.
• High poverty levels lead to an increase in the crime rate.
• IMPACT:
- Reduced productivity
- Higher costs
- Decrease in customer support and profits