Significant sustainable development issues impacting the business sector: Poverty
Executive summary
The world economy has been tremendously challenged by poverty. The business is not an exception. This paper is focusing on the impact of poverty on business. It covers the introduction, a brief understanding of poverty, and how it has impacted on businesses. The evolution of poverty in society is also elaborated. Poverty has interfered with the smooth running of the business, and this has been described as one of the key elements influencing business sustainability. Finally, the paper discusses how business is coping with poverty in contemporary society.
Introduction to poverty
There are so many economic challenges in the contemporary world today, and one of the critical economic even in the 21st century is poverty. Research shows that it has stood to be the leading financial challenge for many people. As the main economic challenge, it has influence in all diverse aspects of life that is social life, spiritual life, political elements, and interestingly, it has impacted the economy, thus, in the business set-up (Mbuyisa & Leonard, 2017). In the United States, the census report shows that more than forty million people are living below the poverty line, hence absolute poverty. Not only in American society, but it is more in developing countries such as third world countries and especially African nations. In organizations that poverty has stricken, the communities are suffering, and you realize that most individuals cannot even afford the necessities. This includes proper sanitation, food, suitable housing, medical care, clothing, among other needs. In this paper, poverty will be elaborated and how it has had a direct impact on the business, how the business is coping with debt as well as current trends and future responses on issues related to poverty in the business society.
Poverty and how it has impacted on business
Defining poverty
Poverty can be explained in several statements. One of the thesis that can define it is that it is a situation or maybe a condition that an individual or the community in general, has got no adequate financial resources that are critical to living beyond the poverty line. The poverty line, in this case, refers to the minimum level or standard of living for a person or community in general (Camacho, 2017). Poverty can as well be understood to be a situation or condition that people or society in general, cannot even afford the necessities. This implies that, in a position of poverty, and individual or the community may lack the financial resources to purchase the needs. In contemporary society, however, poverty in different groups of people is different. For instance, the levels of poverty on women and children are regarded to be the highest. Don't use plagiarised sources.Get your custom essay just from $11/page
Evolution of poverty
Poverty may be attributed to several factors. Some of the critical factors that have led to poverty on individuals include; Chronic general scarcity. This is the kind of poverty that affects a large group of people in the entire economy. This poverty is transmitted from one generation to another, making society continue living under absolute poverty over and over again, and this may take many years. In this scenario, the gross domestic product tends to be very low, and the production usually is deficient (Dembek, Sivasubramaniam & Chmielewski, 2019). Therefore, due to a lack of enough wealth to sustain society, society gets encompassed by poverty. This is closely associated with extreme levels of unemployment, which in turn presses a downward fall of wages and salaries. This influences income inequality in society, and you realized that the population would be composed of a few wealthy people and the highest percentage of people living under absolute poverty.
There are also non-circular causes of poverty in the economy. These are situations that are not permanent in the community but temporary. However, if not carefully addressed, they may create a cycle of poverty (Hossain, Russel & Robidas, 2017). Some of these factors may include wars, famine, natural calamities, and even epidemics. For instance, the outbreak of the Covid-19 virus is a threat to the economy of the world in general. Nations are spending trillions of money to curb the spread of the virus as well as to come up with the vaccine for the same. A one-time event may be very disastrous, even to the extent of destabilizing the economy, and may thereby create a cycle of poverty.
The physical and factual dimension of poverty
Poverty is ideally associated with the inability to have access to the primary needs. These basics include regular medical care, proper sanitation, good learning centers, Electricity, among other essential services that are basic to society in general. It is not funny that in the 21st century, there are so many societies that are stricken by poverty, and thereby, the NGOs have influenced these societies to solve some of the critical challenges affecting (Akter, Jamal, Ashraf, McCarthy & Varsha, 2019). The exact thing is that poverty can entangle itself in a community, and therefore, it may not be easy to get away from it. It has been the main economic challenge, and thus it has influenced the standards of living and even the performance of the business. For instance, in a society that has high levels of poverty, starting a business in such a community may lead to no returns. This will be due to low sales that are associated with the aspect of poverty.
Business interface
How the business is contributing to poverty
Business is described to have contributed to poverty in one way or another. To an extent, the business has failed to offer decent wages and salaries to society. In many cultures, there is a wide gap between the rich and the poor. The rich usually are the wealth, and they have total control of the economy as they control everything (Panagiotakopoulos, 2019). However, the wide gap is created due to inadequate incomes that are attributed to poor salaries and wages by the companies. The other factor in how the business has contributed to poverty is the lack of support for the society. This is, in other words, a lack of giving back to society. Many businesses do not give back to society or rather the customers. They accumulate returns to themselves and ignore the community that they have been trading. Thus the cycle of poverty continues in society. The business may also influence poverty by lack of provision of adequate job opportunities. For instance, technology has made many businesses use the retrenchment policy, thus rendering many people unemployed. Unemployment is closely related to poverty; thus, the cycle of poverty may increase in this scenario.
How poverty: The Baking Industry impacts business
Poverty is closely related to illiteracy in society, and this has had adverse effects on the growth and development of businesses. Debt is the primary key factor for low sales. Many businesses that operate in nations that are under absolute poverty have experienced this problem. If the community is not able to access the necessities, then the people will not purchase those items even though they may be essential to them (Sutter, Bruton & Chen, 2019). For instance, in the industry of foodstuffs, people may not be able to afford to buy simple products like sugar, milk, and bread. They forgo those items not because they are expensive but because they cannot purchase. Thus poverty leads to the low purchasing power of buyers, which leads to low sales by the business, therefore low returns.
Businesses are also experiencing a lack of the technical skills needed in the management. Lack of skills is associated with high levels of illiteracy, which is jointly attributed to poverty (Gloss, Carr, Reichman, Abdul-Nasiru & Oestereich, 2017). I8n this scenario, the performance of the business may go down since the technical know-how in running the market is limited. Some companies have been liquidated as a result of poor management. Businesses are also facing challenges to develop as societies that are stricken by poverty have poor infrastructure and thus challenging to start and run a business in such a scenario.
How the business is responding to poverty
The main aim of any business is to make returns by the end of the day. Many companies wish to operate “forever” in the market (Bhuvaneshwari & Venkatachalam, 2018). Thus to curb the problems that are attributed to poverty, which may be a threat to poverty, the businesses are employing technology to operate the business activities. For instance, with technology, the business can employ limited workers and still make reasonable profits. This entails that some companies adopt the policy of reduction to cut expenses, thus increasing payoffs.
Commentary and conclusion
Current trends and future responses to poverty
Poverty is a threat to the economy in general and, in particular, the success of the business. However, the company is coming up with new trends that can help to curb some of the problems that are attributed to poverty in society. These policies include: Investing in women. Women are among the marginalized groups in the community and thus are encompassed with hardship. The business has taken the initiative of training women to be entrepreneurs. This implies that they will have their income as opposed to the income of their husbands. Thus, poverty is significantly reduced as well as the dependency ratio. The other factor is capacity-building. In this aspect, the business is alleviating poverty in society by training the members of the community on skills that are essential to start and run businesses (Rosenbloom, Gudić, Parkes & Kronbach, 2017). Many people from these programs have started small enterprises, while others have emerged to be international entrepreneurs. Finally, businesses are addressing the issue of unsafe water and poor sanitation. This is a problem that is affecting societies with poverty cycles. Some companies have collaborated to provide some of the essential services in poverty-stricken communities, thus reducing the levels of debt.
References
Akter, S., Jamal, N., Ashraf, M. M., McCarthy, G., & Varsha, P. S. (2019). The Rise of the Social Business in Emerging Economies: A New Paradigm of Development. Journal of Social Entrepreneurship, 1-18.
Bhuvaneshwari, P., & Venkatachalam, C. (2018). Street business keeps the poverty aside: A Sociological observation from Salem city of Tamil Nadu. International Journal of Research in Social Sciences, 8(11), 790-800.
Camacho, F. (2017). and business strategy in infrastructure industries. He published in journals such as the Energy Policy and Journal of Regulatory Economics. He also has a decade of work experience as an independent consultant in infrastructure economics and is cur. The Emerald Handbook of Public-Private Partnerships in Developing and Emerging Economies: Perspectives on Public Policy, Entrepreneurship, and Poverty.
Dembek, K., Sivasubramaniam, N., & Chmielewski, D. A. (2019). A systematic review of the bottom/base of the pyramid literature: Cumulative evidence and future directions. Journal of Business Ethics, 1-18.
Gloss, A., Carr, S. C., Reichman, W., Abdul-Nasiru, I., & Oestereich, W. T. (2017). From handmaidens to POSH humanitarians: The case for making human capabilities the business of IO psychology. Industrial and Organizational Psychology, 10(3), 329-369.
Hossain, M. S., Russel, A. H., & Robidas, L. C. (2017). Structural Evolution and Influence of Social Business to Eradicate the Social Problems in Bangladesh: A Global Perspective. Global Journal of Management And Business Research.
Mbuyisa, B., & Leonard, A. (2017). The role of ICT use in SMEs towards poverty reduction: A systematic literature review. Journal of International Development, 29(2), 159-197.
Panagiotakopoulos, A. (2019). In-work poverty: reversing a trend through business commitment. Journal of Business Strategy.
Rosenbloom, A., Gudić, M., Parkes, C., & Kronbach, B. (2017). A PRME response to the challenge of fighting poverty: How far have we come? Where do we need to go now?. The International Journal of Management Education, 15(2), 104-120.
Sutter, C., Bruton, G. D., & Chen, J. (2019). Entrepreneurship as a solution to extreme poverty: A review and future research directions. Journal of Business Venturing, 34(1), 197-214.