This topic looks at how an organisation affects the community around it in three ways: economic, social and environmental. In the exam you are given stimulus material about an organisation and asked to explain or evaluate its positive and negative impacts under the economic, social and environmental headings.
The Three Pillars of Impact
An organisation is an organised group of people with a particular purpose, such as a company, a charity or a government department. When any organisation sets up in a town or village, its actions affect local people immediately.
Every organisation touches three areas at once:
- Economic factors involve money, employment, trade and local spending.
- Social factors involve people's everyday lives, health, sports, clubs and housing.
- Environmental factors involve physical surroundings, air and water quality, waste and traffic.
Balancing these three pillars so communities thrive today without damaging the future is known as sustainability.
Positive and Negative Community Impacts
Every organisation brings a mixture of gains and drawbacks to a locality. When a business opens, money flows into the local economy through wages, purchases from local suppliers and rates paid to the council, but it can also cause congestion or price pressure.
| Pillar | Positive Impact | Negative Impact |
|---|---|---|
| Economic | Direct jobs provide wages that workers spend in local shops. A spin-off effect creates trade for local transport or trade suppliers. Businesses also pay commercial rates to the council. | Large retail outlets can undercut traditional family-run shops, forcing some to close. |
| Social | Local jobs reduce youth emigration so families stay together. Firms often sponsor local GAA clubs or school events. | When many new workers move in, there is more competition for rented homes and local young people cannot afford them. |
| Environmental | Installing solar panels cuts carbon emissions. Wildlife projects, such as planting native trees and hedgerows on its site, protect local birds and insects. | Commuting workers and delivery lorries cause traffic congestion, noise and air pollution. |
Impact of Social Enterprises
Not every organisation exists to make a commercial profit for private owners. A social enterprise is a business that trades to tackle social or environmental problems, reinvesting any profit back into that mission.
A social enterprise like FoodCloud creates measurable benefits across all three pillars:
- Economic: local charities spend less money buying food, freeing up cash for other support services.
- Social: vulnerable families receive nutritious meals and support networks.
- Environmental: surplus edible food is diverted away from landfill, reducing methane emissions.
Investigating an Organisation
To investigate means to study evidence carefully to reach a fair conclusion about an organisation. An investigation relies on primary research collected firsthand (such as surveys, interviews and site visits) and secondary research gathered from existing records (such as news reports, company accounts and websites).
A good investigation identifies each key stakeholder to weigh up who enjoys the benefits and who bears the costs.
Key terms
- Organisation
- An organised group of people with a particular purpose, such as a company or a government department.
- Sustainability
- A process of balancing the social, economic, and environmental systems that are in constant interaction for the well-being of individuals now and in the future.
- Spin-off Effect
- Secondary business generated for other local firms when an organisation buys supplies, transport or services nearby.
- Commercial Rates
- A local property tax paid by businesses to the local authority (council) to fund community services such as roads, lighting and parks.
- Social Enterprise
- A business that trades to tackle social or environmental issues and reinvests its profits into that purpose.
- Stakeholder
- Any individual or group that is affected by or has an interest in an organisation's activities.
- Primary Research
- Gathering original, firsthand data directly from the field through tools like surveys, interviews and visits.
- Secondary Research
- Gathering existing information that has already been compiled in reports, newspapers, books or websites.
Check yourself
What are the three core pillars of sustainability?
Economic, social and environmental (often summarised as profit, people and planet).
A supermarket's lorries wake residents at 5 a.m. Which pillar is this impact under?
Environmental — noise pollution affecting the physical surroundings and neighbourhood.
Why are commercial rates an economic benefit to a town?
They provide tax revenue to the council to maintain public services like roads, footpaths and street lighting.
How does FoodCloud create a direct environmental benefit?
It diverts surplus food away from landfill, cutting down food waste and greenhouse gases.