We explain what social impact is, both positive and negative. Also, the social impact of companies and a government.
What is social impact?
It is called social impact degree of impact or impact that a project, an event or an organization has on society that is, how much their presence and actions socially alter, whether directly or indirectly. These alterations are evident in people's lives and the general functioning of communities, and can contribute to the well-being or harm of people.
Human society is an organized but active entity, which responds and adapts to the conditions and events that take place within it. At the same time, it acts as an interrelated system, so that there are no actions without consequences within society. That means that everything has, to some extent, some degree of social impact, even if we cannot easily appreciate it.
So, When planning or approving projects and activities, social impact is an important factor to take into account and that is the reason why it is usually investigated and measured before giving the go-ahead. An activity may be important or lucrative, but if it has a negative social impact, its effects will be perceived as a detriment to the community, which normally causes problems when obtaining permits, approvals or financing.
Society will not look favorably on something that it perceives as a threat or harm, while projects and activities that it perceives as a benefit will always be easier to approve, finance and materialize. This, of course, can be difficult to determine, given that the same initiative can have both a positive impact and a negative impact at the same time. And in those cases, it must be decided which of the two has greater weight.
Positive and negative social impact
The social impact of an activity or an organization can be of two types:
- Positive social impact. That which society perceives as a source of well-being, either because it creates new opportunities, meets needs, empowers people or contributes in some other way to the improvement of society. For example, the opening of a factory that generates new jobs in a city neighborhood.
- Negative social impact. That which society perceives as a threat or a source of discomfort, either because it impoverishes the collective, monopolizes resources or has a pejorative impact on society. For example, the opening of a factory brings noise and pollution to a previously quiet neighborhood.
Social impact of companies
Companies and corporations, being a source of innovation and new economic projects and activities, often have a considerable social impact in different ways, for example:
- Through your work management. Work is a fundamental activity in society, through which people provide their livelihood. This means that employers can have an important impact on the community by hiring workers (providing opportunity and wealth) or firing them (causing unemployment). This is particularly crucial for large companies with large numbers of employees from the same community, whose decisions to increase or reduce staff can have an immense social impact on the community in which they operate.
- Through its economic management. Companies are economic actors that produce wealth through the sale of goods and services. In many cases, these goods and services are essential for society, so their price has an important social impact. That is the reason why the sudden increase in prices of certain products can cause a lot of discomfort among citizens, especially when there are no substitute products, as is the case with basic services in society.
- Through its corporate social responsibility. By dedicating a portion of their money to promoting and financing community activities, companies can have a very positive social impact that earns them the affection and loyalty of the consumer public. Sponsoring sports teams, investing in public or community infrastructure, creating scholarship plans or even organizing meetings and festivities can be examples of this.
The social impact of companies usually enhances (if it is positive) or overshadows (if it is negative) the image of the company towards the consumer public and can often be translated into an efficient brand promotion campaign, or on the contrary it can provoke community outrage and, ultimately, lead to direct or indirect government intervention in the company's affairs.
Social impact of a government's measures
The State and governments are also important actors in daily life, whose decisions have great social impact. Ultimately, the State is in charge of laying the foundations of society, and its plans and decisions often alter the course of community life, for example:
- Through subsidy policies. When States subsidize certain essential goods or services, they allocate part of their budgets to artificially lower the cost of said goods, given that they are considered indispensable. By doing so, the State is investing a good part of its money in making people's lives easier, which usually has a very positive impact on society. But at the same time, when these subsidies are withdrawn, the price of goods rises again and immense unrest is generated in the population, who can take to the streets to express it, organizing protests.
- Through the laws and sentences issued. The management of legality and jurisprudence by the State are also activities with a strong social impact, since they largely determine what people can or cannot do. Certain prohibitions and certain legalizations can produce a considerable social impact, depending on whether they cause discomfort or well-being to the population. Prohibitions considered unfair are usually disobeyed, or even openly opposed by people.
- Through his political ethics. Another aspect of great social impact on the part of the States is their vocation to impartial compliance with the laws and their respect for legality. A government can produce a negative social impact by not respecting the very laws it imposes on citizens, or by usurping political power in contravention of due processes. That is the reason why massive protests break out against authoritarian governments, for example.
Importance of social impact
Social impact is an important variable both for companies and for-profit organizations, as well as for the government and the State, since determines how harmonious the relationship of these actors will be with society as a whole.
What has a negative social impact tends to be a source of contrary feelings on the part of the population, and depending on how it is handled, it can cause simple complaints, protests or even uprisings against it. On the other hand, the dynamics of positive impact on society can transform it for the better, and make it a more harmonious and peaceful place in which to live.
Continue with: Social actors
References
- “Social impact. A model based on capabilities” at the Manpower Group Foundation.
- “Social Impact. What is it and how is it measured?” (video) in ProCapacidad.
- “How to measure social impact” in Terraética.
- “Social impact” in ES Impact.
