Introduction Ucsp 6th Handout

Cultural, Social, and Political Institutions, Understanding Culture, Society, and Politics
Social Organizations: Groups within Society (Primary and Secondary)
Objectives
At the end of this lesson, you should be able to:
 explain how society is organized,

 describe the organized nature of social life and rules governing behavior,
 define social organization and social groups, and
 differentiate primary and secondary groups in terms of their duties in society.
 How would you describe your relationship with your family?

 How would you describe your relationship with your classmates and teachers?
 What makes your relationship with your family members and school teachers different from each other?
How Society is Organized

People have organized themselves into groups with common rules of living. The organization of such a group is
called society. Different institutions are found in every community, such as the family, kin relationships, childcare,
and division of work based on gender and age.
All societies, small or large, are organized around an uneven division of labor and decision-making. Present societies
are expected to provide protection, economic security, law and order, and a sense of belonging to their members.
Societies usually adapt to changes around them, like in the environment or in technology. Most changes happen
slowly, but some significant events such as war or revolution can completely transform societies.
The Threefold Nature of Social Life

Applying Goethe’s method to social life, Rudolf Steiner thought that if we apply the phenomenological, participatory
method to human social life as a multifaceted, multilayered whole, we can distinguish three different spheres of
activity:
1. cultural–everything involving the growth and expression of the human spirit: education, art, science,
religion, journalism, and publishing
2. legal or political–involving human rights and relationships between people and organizations
3. economic–having to do with the production, distribution, and consumption of goods and services
Human society, Steiner claimed, will only flourish if these three spheres are recognized and each is organized
according to its own inherent principles, dynamics, and ideals.
Social Groups and Organizations

Sometimes, organization refers to associational groups. It includes corporations, armies, schools, and banks. Society
composes many of such organizations. A state is considered as a political organization, or school may represent an
educational organization, and so on. They are all social organizations.
Organization is a state of being or a condition in which various institutions in society are functioning by their
recognized or implied purposes (Elliott and Merrill, 1950).
Social organization or social system refers to the interdependence of parts in groups. These groups may differ in
size and nature. It makes possible the complex activities where members of a complex society participate in.
Groups within Society

People do not live in isolation. They live in groups. Social groups consist of two or more individuals who identify with
one another and regularly interact as a result of shared norms, values, and expectations. Being in a group entails
realizations of activities and events in one's life that help people build and define their stories, interests, and
contributions to society.
Different group categorization exists in society. Categories include primary and secondary groups, in-groups and out-
groups and reference groups.
Primary Group
First formulated by Charles Horton Cooley, the concept of a primary group is an essential unit of social organization
and social life. A primary group is characterized by personal and lasting relationships with its members.
It has been identified that relationships in a primary type of team is unconditional and not prearranged. Setting aside
family relations, members of primary groups share lots of things in common, like interests, stories, or personalities.
The best example of a primary group is the nuclear family. Relationships and attachments organized in this group
are permanent as one's identity, lifestyle, and stories are tied to this group. A group of close friends is another
example of this group.
The term 'primary' is used with these groups because they are the primary or main source of socialization and
relationships. Relationships in primary groups give us security, love, and companionship. We also learn norms and
values from our family and friends that stay with us for most of our lives.
Secondary Group
By contrast, secondary groups are formal, small or large, and usually short term. These groups are typically found
at work and school.
An example of this group is a political party organized to plan the best campaign for the election. Members of the
board meet infrequently and for only a short period. Team members may have some similar interests, but the main
purpose of the group is on the task instead of the relationships.
Classroom and work environment are other examples of a secondary group.
Sometimes, secondary groups become informal, and members of the team get to know each other well; however,
even if their friendships exist in a limited time, they will not necessarily remain close beyond.
Unlike the primary group, members play their roles in a secondary group based on arranged and conditional
contract. Members of this group need not to convene based on shared interests or personalities.
Explore!
Why is having a companion, a partner, or a group important in our personal lives and future careers?
Try it!
List three groups in campus and classify them as either a primary or secondary group. Make some observations
regarding their characteristics.
 name or description of the group

 characteristics
(members, regulations, nature of work, etc.)
What do you think?

Which type of group contributes more important roles in maintaining a balanced life and orderliness in society? Why?
Keypoints
 People have organized themselves into groups with common rules of living. The organization of such groups
is called society.
 Applying Goethe’s method to social life, Rudolf Steiner concluded that if we apply the phenomenological,
participatory method to human social life as a multifaceted, multilayered whole, we can distinguish three
different spheres of activity−cultural, legal or political, and economic.
 Social organization or social system refers to the interdependence of parts in groups. These groups may
vary in size and nature.
 A social group consists of two or more people who regularly interact and share a sense of unity and
collective identity.
 Primary groups are groups that are tightly united, typically small scale, with intimate relationships, and are
usually long lasting.
 Secondary groups can be small or large, are mostly impersonal, and usually short term. These groups are
typically found at work or at school.
Social Organizations: In-group and Out-Group
Objectives
 recognize the existence of in-groups and out-groups in one’s life and society,
 compare different social groups of a social organization according to their manifest and latent functions, and
 discuss the issues surrounding in-groups and out-groups.
Is being a member of a particular group a matter of choice?
Review!
Sometimes, 'organization' refers to associational groups. It includes corporations, armies, schools, and banks. Society
is composed of many such organizations. A state is considered as a political organization and school may represent
an educational organization. They are all social organizations.
Organization is a state of being or a condition in which the various institutions in society are functioning by their
recognized or implied purposes. (Elliott and Merrill, 1950)
A social organization or social system refers to the interdependence of parts in groups. These groups may differ
in size and nature. It makes possible the complex activities where members of a complex society participate in.
Different Social Groups of Social Organization

Each community is made up of smaller groups and associations that are built on social class, personal interest, or
common goals.
The power elite is run by a small group representing the wealthiest, most powerful, and most influential people in
government, business, and the military.
Example:
A generous business person may make substantial contributions to a political candidate.
Voluntary associations are groups that people choose to join, wherein members are united by the pursuit of a
common goal.
Example:
a parent-teacher association at a particular school
Formal organizations are secondary groups organized to achieve specific goals. Legal organizations tend to be
larger and more impersonal than voluntary associations.
Example:
A corporation is usually a formal organization. The very specific goal of most companies is to increase profits.
Bureaucracy is a type of formal organization in which a rational approach is used to handle large tasks. The
bureaucratic organization is highly organized with a high degree of formality in the way it operates.
Examples:
colleges and universities

People do not live in isolation. They live in groups. Social groups consist of two or more individuals who identify with
one another and regularly interact as a result of shared norms, values, and expectations. Being in a group entails
Different group categorization exists in society. Categories include primary and secondary groups, in-group and out-
group, and reference groups.
In-Group and Out-group

An in-group is an exclusive social group formed out of shared interest and identity. This is the “we” group in society
from which people’s loyalty is bestowed upon. This type of group satisfies the old saying "birds of the same feather
flock together.'' It is in this group where people feel more comfortable and secured, with no threat, intimidation or
conflict of interest. Members of this group consist of those who share common experiences or ideas in life.
Examples include friendship groups, families, and religious groups.
An out-group, on the other hand, is a social group associated with competition or opposition as its nature is
different from one’s own. This is the “they” of society, where a person is not a part of or does not belong to the
group. The formation of out-groups is the result of perceived differences.
One’s out-group includes those groups one dislikes or disregards. It is also that group where one does not feel happy
personality-, interest-, or ability-wise.
It should be noted that out-groups should not be given negative connotation as they only involve non-membership to
a certain group. After all, people are created differently. This should be celebrated in the same regard as we give to
shared interests. People should respect what others can and cannot do. That is the very purpose of recognizing the
existence of out-groups.
Issues Surrounding In-groups and Out-groups

In-groups and out-groups are formed as a result of the following:
Social groups, despite functioning actively in realizing tasks of society, draw a boundary between people in the
community. The concept of social group classification of in-groups and out-groups brings defined and perceived
differences to a different level. Lack of sense of belongingness, isolation, rivalry, tension, and threat of violence may
result from well-defined in-groups and out-groups.
In-group favoritism happens when a person favors or offers special treatment to in-group members over out-
group members. This activity may disregard merit and result to serious social situations such as corruption, crime,
and padrino system.
Out-group homogeneity is the tendency of a person to classify those people who are not in their in-group as
being similar to one another. In short, people overgeneralize and label out-groups in a negative manner.
Explore!
What are your in-groups and out-groups? How do you choose your in-groups? How do you resolve conflicts with your
out-groups?
Try it!
Write three measures or guidelines on how society and its people avoid the adverse effects of the existence of in-
groups and out-groups.
What do you think?

Without the boundaries caused by in-groups and out-groups, would the world be a better place? Justify your answer.
Keypoints
 Social groups are a specified number of individuals formed to interact with one another and other people
outside the group based on the statuses and roles assigned to them.
 There are different social forms of social organization. These include The power elite, voluntary
associations, formal organizations, and bureaucracy.
 An in-group is an exclusive social group formed out of shared interest and identity.
 An out-group is a social group associated with competition or opposition as its nature is different from one’s
own.
 In-group favoritism happens when a person favors or offers special treatment to in-group members over
out-group members.
 Out-group homogeneity is the tendency of a person to classify people who are not in their in-group as
being similar to one another.
Social Organizations: Reference Groups
Objectives
At the end of the lesson, you should be able to:
 explain how reference groups work in a person’s life and society, and
 recognize the different types of reference groups and how they apply to real life situations.
 What is a role model for you?

 Who are your role models?
 How do they influence you in your daily life?

People do not live in isolation. They live in groups. Social groups consist of two or more people who identify with one
another and regularly interact as a result of shared norms, values, and expectations. Being in a group entails
Different group categorization exists in society. Categories include primary and secondary groups, in-groups and out-
group, and reference groups.
Reference Groups and its Normative Functions
Reference Groups are groups that serve as our standards in setting and evaluating our own behaviors and
attitudes.
When reference groups serve a purpose of setting your norms and values, these are normative reference groups.
These groups directly influence the behavior of a person, serving as a role model, standard, or base point.
Your immediate family and friends are considered a normative reference group. The way they are is the way you are.
Your mentors or celebrity idols also shape your personality. In hopes of being identified with them, people opt to act,
speak, dress, and think the way they do.
Reference Groups and its Comparative Functions

Some reference groups exist to provide people with means of comparison for behavior, style, and achievement. Such
are comparative reference groups whose norms and values serve as points of comparison for certain behaviors.
For body figure, teenagers look up to supermodels as references. For skills in basketball, enthusiasts play by the
rules of professional basketball players from the NBA or PBA. To check whether he fares well in his exams, a student
may compare his score from that of his class's best students.
Group Influences
It is a natural response of people to socialize, build connections, and get influenced. With either good or bad
influence, our social groups or reference groups play vital roles in shaping who we are and becoming who we want
to be or what society wants us to be.
Reference groups come in different forms and classifications.
Aspirational reference groups refers to people or groups of people with whom we want to be compared with.
Product advertisers and celebrities like athletes, movie stars, or talk show hosts are fine examples of this reference
group. People think that by supporting their favorite celebrity, they become associated with them.
Associative reference groups refer to groups where we belong and take part in. These people include our
neighbors, coworkers, club members, or church members. People have a tendency to confine with what is on trend
in their immediate community.
Dissociative reference groups refers to groups that people have no interest in being associated with. This group
of people includes those with whom we share conflicts in interest, attitude, or behavior.
Explore!
How do you show your support or associations to your reference groups? Do you do what they do? Do you act,
speak, and think the way they do? What benefits does having reference groups give you?
Try it!
Give one reference group of yours for each type. Name the person or the group, describe its nature, and state your
reason for classifying them under such type.
What do you think?

How do reference groups change the way people think about themselves and others?
Keypoints
 Social groups consist of two or more people who identify with one another and regularly interact.
 Reference groups serve as our standards in setting and evaluating our own behaviors and attitudes.
 Normative reference groups set a person’s norms and values.
 Comparative reference groups are groups whose norms and values serve as a point of comparison for
certain behaviors.
 Aspirational reference groups are groups of people with whom we want to be compared with.
 Associative reference groups are groups where we belong and take part in our immediate life.
 Dissociative reference groups are groups people have no interest in being associated with.
Social Organizations: Networks
Objectives
 discuss what a social network is and how it works, and

 recognize the role networks play in a person and in society.
What roles does social media play in your life?
Review!
Sometimes, social organizations refer to associational groups. It includes corporations, armies, schools, and banks.
The society is composed of many such organizations. A state is considered as a political organization and a school
may represent an educational organization. They are all social organizations.
Organization is a state of being or a condition in which the various institutions in society are functioning by their
recognized or implied purposes. (Elliott and Merrill, 1950)
Social organization or social system refers to the interdependence of parts in groups. These groups may differ in
size and nature. It makes possible the complex activities where members of a complex society participate in.
Groups Within Society and the Rise of Social Networks

A social group is a team of two or more individuals that are dependent on one another. Its organization rests on
the purpose of working and achieving the goals of society. Humans are social beings whoa are constantly longing
and needing association or support.
Different group categorization exists in the society. Categories include primary and secondary groups, in-group and
out-group, and reference groups.
The existence of different social organizations in society and the connections or ties that bind them together give rise
to a social network.
Social Networks
A social network is a social structure comprised of individuals joined by a certain pattern of links or relations. Social
networks are indicative of a person or an organization's relationships as either casual and informal or personal and
intimate. This is often regarded as individuals' basic tool to connect to society.
Designed to connect people and make the world seem borderless, social media websites like Twitter or Facebook are
social networks. In a click, updates about an individual may reach his friends and friends of friends as well. People
listed in your phone book are your social networks. Membership to organizations or companies guarantees a social
network.
Ties and Nodes

As mentioned, social networks are composed of individuals and the connections or links that bind them together.
These components of a network are called 'nodes' and 'ties.'
The person or organization playing a part in a network is known as a node. On the other hand, ties are the links or
connections that bind individuals or organizations together.
They may be weak or strong. Measured by strength, strong ties are the result of intimate and personal links.
Meanwhile, weak ties are connections caused by informal, casual, and business-like relationships.
The Importance of Social Networks

Through networks, social linkages or connections are formed. It is important to note that these networks serve a role
in the attainment of the goals of society. Through networks, people get connected, get updated, and become aware.
Networks are media for the spread and exchange of ideas. News awareness, information relay, and rumors are good
examples. Some people also use their networks to obtain a position in a company, to make a business successful, or
to earn a living. Social networks undoubtedly serve as social support and provide people with information or
guidance in times of need.
Explore!
How do your social networks affect your personal life? Do they influence your values, behaviors, and perspectives?
What makes social networks significant in society? How does their existence achieve the goals of the community?
Try it!
Name at least three social networks you use. Write a short description for each. Include their functions and
significance in your life. Also identify the types of members for each social network.
What do you think?

Can a person survive without the people with whom he or she has shared his or her life with?
Can society survive without the existence of social networks?
Tip
In a social network, a node refers to the individual or organization playing a part in a network. In a physical system,
it is an active electronic device that is attached to a network and is capable of creating, receiving, or transmitting
information over a communications channel.
Keypoints
 A social group is a team of two or more individuals who are dependent on one another.
 A social network is a social structure comprised of individuals joined by a particular pattern of links or
relations.
 Nodes are the persons or organizations playing a part in a network.
 Ties are links or connections that bind individuals or organizations together.
 Through networks, people get connected, get updated, and become aware.
Social and Political Structures: Political Organizations
Objectives
 discuss how political organizations operate as an entity which maintains societal functions,
 recognize the differences among different types of political organizations, and
 analyze social and political structures.
 In a classroom setting, what are the functions of the elected class officers?
 Do you believe that their existence is needed for the maintenance of order in the class?
Social and Political Structures

Social and political structures are both constructs formed as a result of large scale ties and relations in society.
Social structure, in a general sense, refers to patterned institutions or groups in society where people work, act,
and live together.
Examples: Social class and social institutions like the government and legal community, LGBT community, and
professional community
The political structure, on the other hand, is used to call on the institutions and political entity organized in
agreement with regulations, laws, and norms of society or of the entity itself. A society based on political structure
may follow totalitarianism, authoritarianism, or democracy.
The Need for Political Organizations

The need for social order, public affairs and functions, and conflict resolution are perennial or inevitable. In this
premise, the foundation goals of political organizations are required.
Political organizations are entities in a society formed for administrative or political functions. They refer to the
scheme or design of power and authority in society. Political organizations define the scope and limits of power.
Society, to achieve and maintain its goals and functions, needs an authority figure to set social control and lead
people. Issues like allocation of social and political roles, the exercise of political power and authority, and resolutions
for conflict and clash are among the recurring problems every society faces.
The questions rest on who takes the lead in addressing such problems. On this ground lies the need for political
organizations. Serving as the authority, they set rules and roles and direct actions to take.
Special interests of a particular group may also be addressed through political organizations such as labor unions,
political parties, interest or advocacy groups.
 Labor unions collaborate or negotiate with the company administration to raise employee concerns
regarding salary increase, benefits, and labor rights.
 Political parties are formed for staging interest in the government seat.
 Advocacy and interest groups are designed for campaigning the rights, privileges, and concerns of a
particular group of people in society. Such group of people may not be represented in government
Types of Political Organization

There are four recognized types of political organizations. They are bands, tribes, chiefdoms, and states.
Band
The band is the most traditional and smallest type of political organization. Familial ties connect a band. Politically
independent, a band usually does not recognize the formal government. There are no written codes or laws. There is
no organized group of leaders. This is the result of their tendency and nature of moving from one place to another in
search of food or shelter.
Tribes
Tribes are traditional societies comprised of people or group of people connected by social, religious, ancestral, or
cultural ties. Bigger than a band, tribes are usually settled in one place and do not rely on hunting and gathering but
on agriculture for subsistence. Just like bands, tribes do not observe formal governments.
Bands and tribes are egalitarian societies. This means that they see people of the same age and gender as equals.
For instructions and decision, they rely on group consensus.
Chiefdom
Chiefdom, unlike tribal societies, is a permanent and formal government. Chiefdoms are formal political
organizations in a traditional society based on kinship or the leadership of selected families.
State
A state is a formal political organization in a modern or industrial society regarded as an organized community under
a government. Characteristics of a state include owning a certain territory, having a particular group of people to
lead it, a group of people to take administrative roles, and freedom from external or foreign control.
Explore!
Why does society need an authority figure?
What type of leadership or leaders should people have to achieve maximum success in maintaining peace and order?
Try it!
Give at least three political organizations. Write their objectives and projects in society.
What do you think?

Imagine the world without political organizations. What do you see?
What can we expect from people or from a society which works and operates without the supervision of a political
organization?
Keypoints
 Social structure refers to patterned institutions or groups in society where people work, act, and live
together.
 Political structure is used to call the institutions and political entities organized in accordance with
regulations, laws, and norms of society or of the entities themselves.
 Political organizations are entities in a society formed for administrative or political functions.
 A band is a group of nomadic people connected by familial ties.
 Tribes are traditional societies comprised of people or groups of people connected by social, religious,
ancestral, or cultural ties.
 Chiefdoms are a formal political organization in a traditional society based on kinship or the leadership of
selected families.
 A state is a formal political organization in a modern or industrial society regarded as an organized
community under a government.
Social and Political Structures: Authority and Legitimacy
Objectives
 enumerate and explain the three types of authority,

 discuss how power, authority, and legitimacy work as essential components of a social and political structure,
and
 analyze social and political structures.
 Are power and authority the same? Are authority and legitimacy different?
 How do these components work together in a social and political structure?
Review!
Social and Political Structures
Social and political structures are both constructs formed as a result of large-scale ties and relations in society.
Social structure, in a general sense, refers to patterned institutions or groups in society where people work, act,
and live together.
Examples: Social class and social institutions like government and legal community, LGBT community, and
professional community
The political structure, on the other hand, are institutions and political entities organized in agreement with
regulations, laws, and norms of the society or of the entities themselves. A society based on the political structure
may follow totalitarianism, authoritarianism, or democracy.
Power
According to Thomas Hobbes, power is a natural inclination that is sought continuously by individuals. In sociology
and politics, power is the ability to get others to do things even when they might not want to. Put into action either
through coercion or persuasion, power, in simpler terms, is the ability 'to do.' Power may be exercised through
coercion or the use of sanctions, punishment, or threat.
The presence of unlikely consequences may force people to do things. Sometimes, the use of coercion is not
necessary to get people to work. People may work freely and willingly if persuasion, reason, and incentives or
positive reinforcements are presented. It is noteworthy that society works based on power. Ideally, though, a society
imposing its power without the use of coercion is most efficient.
States have power because they can make laws. The police enforces laws by the use of force. If you disobey the
law, you will be fined or jailed. However, we want to be able to make a difference between cases in which it is right
that the state has power, and cases in which it is objectionable or wrong in some way. To make this distinction, the
concepts of authority and legitimacy is needed.
Authority
Authority is the right to command. Authority is observed when an individual has a command to make a person do
things. Such act is a response to that person’s perceived power. This person can be your boss, your superiors, or
those who hold high positions in society.
Aside from what has been mentioned above, authority is shown when a person is an expert in a particular matter.
We ask engineers to make our buildings and structures stand firm. We ask specialists for some health concerns. We
ask teachers for learning strategies.
To clarify the concept, take this example. Public officials are elected by the people and are bestowed with rights to
rule and exercise administrative roles based on existing societal laws. Professionals, on the other hand, gain
authority after effectively learning through years of practice in their respective fields. Authority is more than power.
Authority is guaranteed by legitimacy or in a formal manner. Authority is the sum of power and legitimacy.
Having all these things presented, authority is the quality of a person, institution, rule, or order. It is also the right or
control over giving commands, making verdicts, or enforcing actions.
Legitimacy
Legitimacy gives form to authority. Together with power, legitimacy dresses authority. It is said to be a symbol or
representation–like professionals having their licenses, employees wearing their uniforms, and laws being written as
formal documents.
In the most basic sense, a state is said to be legitimate if it exists and operates according to the law. If a
government is legitimate, then in some way, the fact that it has power is justified. If so, then we can argue that we
ought to obey it. If power is objectionable, then we do not tend to have an obligation to follow it.
Legitimacy is a belief that a rule, institution, or leader has the right to govern. Legitimacy is the force that makes an
action of a governing body necessary.
Three Types of Authority

According to the sociologist Max Weber, there is a category as to how authority is legitimated as a belief system.
These are traditional, charismatic, and rational.
Explore!
In your opinion, which type of authority or legitimated rule is more applicable and valid in modern times?
Try it!
Give two evident examples (government, religious order, or scenario) for each type of authority or legitimate rule.
 traditional
 charismatic
 rational
What do you think?

Why are authority and legitimacy vital components in acquiring and maintaining peace and order in society?
Keypoints
 Power can be defined as the ability to get others to do things even when they might not want to.
 Authority is the legitimate or socially approved use of power.
 Legitimacy is the right and acceptance of authority, usually a governing law or a régime.
 Traditional authority is based on a system in which authority is legitimate because it "has always existed."
 Charismatic authority rests on the unique qualities of a leader who shows that he possesses the right to
lead under magical powers, prophecies, heroism, etc.
 Rational authority is based on a system of rules that is applied administratively and judicially per known
principle.
Economic Institutions: Reciprocity
Objectives
 define and explain the functions of economic institutions,

 discuss the concepts of reciprocity in line with sociology and economics,
 analyze the activities of different economic institutions and their impacts on the global community, and
 relate the practical application of reciprocity to one’s daily life.
If you have been given something, is it expected for you to return the favor? Why or why not?
Economic Institutions
The term 'economic institutions' has a broad meaning. Let us find out.
The term 'economic institutions' refers to:
 a network of commercial organizations that determine how goods and services are produced, generated,
distributed, and purchased
Examples: producers, manufacturers, retailers, wholesalers, buyers
 the particular agencies or foundations devoted to the gathering or studying of economic data, or authorized
with the job of supplying goods and services that are necessary to the economy of a country
Examples: the Philippine Bureau of Internal Revenue, the U.S. Federal Reserve, the National Bureau of
Economic Research
 the popular and thriving arrangements and structures that are part of culture or society
Examples: competitive markets, the banking system, a system of property rights
Reciprocity
What is reciprocity?
In Sociology
It is defined as the a system of voluntary exchange among individuals based on the understanding that the giving of
favor by one will be reciprocated in the future either to the giver or to someone else.
Example:
Filipinos practice utang na loob. This act is part of our culture. When a person shows you an act of kindness, it is a
must for Filipinos to return the favor.
In Economics
It is defined as an exchange of equal advantages.
Example:
Japan and Philippines made an economic agreement to remove traveling restrictions to flourish the tourism of both
countries.
Types of Reciprocity
What are the types of reciprocity?
Generalized
Generalized reciprocity is giving something without the anticipation of an instant return.
Example:
When a friend gave you a birthday gift, it is not expected that you will also give that friend a gift in return on the
same day, although it is anticipated that you will give him a gift or token sometime in the future or when his birthday
comes.
Balanced
Balanced reciprocity is giving out of something with the anticipation of immediate return.
Example:
When you get something from the store and walks out without paying for the goods, you will be stopped by shop
employees because you have not reciprocated with money the goods that you picked from the store.
Negative
Negative reciprocity occurs when the exchange of something already involves taking advantage of someone or the
situation. Most of the time, this type of exchange involves trickery, intimidation, or hard bargaining.
Example:
Province X has no source of electricity for a long time. X Electric Company made an agreement with the officials of
the province to provide them with power supply. In exchange, the whole area should not entertain any other electric
company to offer the same services to them.
Economic Institutions, Reciprocity, and the Impacts on the Global Community

We have learned in Chapter 2 that economic institutions involve activities such as producing, generating, distributing,
and purchasing goods and services. These activities have an impact on the global community.
See the illustration below.
Legends:
 blue: economic institutions

 red: activities of economic institutions
 yellow: global community
The activities with economic institutions play vital roles in shaping and maintaining the stability of world community.
If one system fails to do its activity, there will be an imbalance that will highly affect the whole community.
Practical Application
Reciprocity always necessitates adequacy of responses but does not mean that it should be of the same amount or
volume. More than economic gain, reciprocity is more of a social benefit. We have to make use of this principle to
bring us closer to our neighbors, friends, family, and loved ones.
Explore!
Think of at least three scenarios or situations where generalized reciprocity can be applied.
Try it!
Compare and contrast generalized from balanced reciprocity. Give examples for each.
What do you think?

How does negative reciprocity affect the activities of different economic institutions? What do you think will be the
impact of these on the global community?
Keypoints
 Generally, economic institutions refer to the network of commercial organizations that determine how
goods and services are produced, generated, distributed, and purchased.
 In sociology, reciprocity is defined as the system of voluntary exchanges among individuals based on the
understanding that the giving of favor by one will be reciprocated in the future either to the giver or to
someone else.
 In economics, reciprocity is defined as an exchange of equal advantages.
 There are three types of reciprocity: general, balanced, and negative.
 The activities of economic institutions play vital roles in shaping and maintaining the stability of the global
community.
 More than economic gain, reciprocity is more of a social benefit.
Economic Institutions: Transfers
Objectives
 explain the concepts of transfer or transfer payment concerning economics, and

 analyze the level of activities of different economic institutions concerning transfer and the impacts on the
global economy.
 Are you aware of the different kinds of goods and services that private and government sectors provide for
the people?
 Does the present government provide more goods and services than it did in the past?
 How does the government redistribute more income?
Review!
Economic Institutions
The term 'economic institutions' refers to:
 a network of commercial organizations that determine how goods and services are produced, generated,
distributed, and purchased
Examples: producers, manufacturers, retailers, wholesalers, buyers
 the particular agencies or foundations devoted to the gathering or studying of economic data, or authorized
with the job of supplying goods and services that are necessary to the economy of a country
Examples: the Philippine Bureau of Internal Revenue, the U.S. Federal Reserve, the National Bureau of
Economic Research
 the popular and thriving arrangements and structures that are part of culture or society
Examples: competitive markets, the banking system, a system of property rights
The Functions of Economic Institutions

The economy of a particular country like the Philippines is composed of different institutions that play a significant
role in providing the needs of the people. These institutions perform economic activities that start from production to
distribution of goods and services to the people.
Here are some of the functions of economic institutions in society:
 Enhance development through financial services

 Provide business opportunity to people by financing and loans
 Fund research projects aimed at improving the lives of the individuals in the society
Transfers
In economics, transfer or transfer payment is a redistribution of income or resources in the market system. It
refers to payments or transactions where there is no value added to the economy. There is no additional production
of goods and services but just a transfer of money from private hands to government.
Examples:
 Taxes
 Social security
 Private pension benefits
 Housing
 Health care
Transfer payments can originate from either government or business sources. Business transfer payments include
corporate gifts to non-profit institutions, payments for personal injury, and taxes paid by domestic corporations to
foreign governments. Far more important, both, in terms and policy significance, are transfer payments originating
from government sources.
How Transfers Work in the Government

The government as an economic institution also provides commercial goods to the people in the form of public
services and transfer payments.
In the Philippines, the government is allocating a huge amount of money to finance different programs like
education, infrastructures, health, and defense.
Among the government agencies that received the highest allocations are:
 the Department of Education (DepEd) with PhP 411.905 billion,

 the Department of Public Works and Highways (DPWH) with PhP 384.287 billion, and
 the Department of Interior and Local Government (DILG) with Php 124.229 billion
In the United States, transfers are payments made to individuals by the federal government through different
social benefit programs.
In Canada, transfers are payments made to all provinces and territories by the federal government.
Economic Institutions, Transfers, and the Impact on the Global Economy

Transfer as an activity of every economic institution, such as the industry, finance, and services, distribute part of
their income or profit to provide essential services and assistance to some segments of society, especially the
underprivileged, to help uplift their living conditions without expecting anything in return.
To help you analyze statement above, look at the diagram shown below:
In the circular flow of the economy, households and firms pay taxes to the government. In return, the government
distributes transfers in the form of services to the household and subsidies to the firms.
The activities of the household, markets, businesses, government, or financial institutions as economic systems have
a great impact on the global economy because they provide goods and services needed by people not only of a
particular country but also by the world community. The stability of a country's economy has a direct impact on the
global community for it determines its ability to provide the needs of its people. It also contributes to the stability of
the world.
Explore!
Imagine that the Philippine government is doing its job in solving the rampant problem of smuggling. More taxes are
collected, and local and foreign industries are protected. In the end, more effective and efficient services are
provided to the people. How do you connect this scenario to the lesson?
Try it!
If you become a wealthy individual who is willing to share part of your fortune to others, which among the basic
needs (food, housing, education, health) will be your priority? Justify your answer.
What do you think?

Why are there many Filipino families who still do not have access to essential goods and services to support their
everyday living?
Keypoints
 Economic institutions are sectors of the economy that provide goods and services to the people.
 One of the activities of different economic institutions of a particular country is to provide transfers.
 A transfer or transfer payment is a redistribution of income or resources in the market system.
 The circular flow of economy helps explain the interrelationship of different sectors of the economy.
 Government and private enterprises play major roles in the world economy.
 The activities of the economic institutions of a particular country have a great impact on the global
community.
Economic Institutions: Redistribution
Objectives
 explain the concepts of redistribution in relation to sociology, economics, and politics;

 analyze the level of activities of different economic institutions concerning redistribution and the impacts on
global community; and
 recognize the various forms of redistribution in own community.
 What do you expect the government will do with the taxes they collect from the people?
 In your church, in what programs or projects do you think they spend the donations coming from the
members?
Redistribution
What is redistribution? Why is it an important activity of societies? How do you compare redistribution from
reciprocity?
In relation to Sociology
Redistribution is an everyday activity of societies. Members of the society contribute by giving their goods that
would be collected by the head of the community followed by a distribution of the goods among the members.
Example:
A) Church tithes
The church acts as the central organization that pools the goods donated by its members in the form of tithes or
donations. The church manages these tithes and donations for the maintenance of the church itself and its projects
and programs in which most of the time, its members are the recipients. By that process, the tithes or donations
given by the members are being redistributed to them, especially the less fortunate members.
B) Potlatch
It is a ceremonial distribution of property and gifts celebrated by most Pacific Northwest tribes. In every celebration,
each person invited to a potlatchreceives a gift. Ceremonial formalities were observed in the distribution of gifts or
goods by the donor according to the social rank or status of the recipients.
Potlatch in Relation to Economics
Traditionally, the potlatch is the economic system of the natives of South America. Today, the potlatch is still evident
in our economic system. How?
Example:
In our society today there are rival companies. Let us consider these companies as the rival groups of Native
Americans. Company A releases one product to the market; the Company B will try to surpass that product by
releasing their product better than the product of the Company A.
In Relation to Economics
Redistribution refers to the collection of goods and services of people and groups to be given by a central
authority for allocation.
Example:
When the government collects taxes from its population, the government becomes the centralized authority where all
taxes are pooled and managed. The taxes that were pooled will be returned to the people in the form of social
services, welfare benefits, infrastructures, and others which the government will spearhead.
In Relation to Politics
Redistribution is the process by which electoral districts are added, removed, or changed. This process is a form of
boundary delimitation that changes electoral district boundaries, usually in response to census results. In democratic
governments, redistribution is required by law or constitution.
Example: In the United States, redistribution happens after each ten-year census. The state legislature approves
most states' legislative district redistributions. The highest court rulings require that congressional districts have
roughly equal populations.
The table shows a comparison between redistribution and reciprocity.

Economic Institutions, Redistribution, and their Impacts on the Global Community
As we have learned in Chapter 3, redistribution refers to the collection of goods and services of people and groups to
be given by a central authority for allocation. Both producers and consumers are economic institutions in which
the government or central authority collects taxes from them and allocates these funds for projects which are
also for the use of economic institutions. If one failed to do his function, there would be dysfunction and economic
imbalance in society.
Redistribution in the Family or Community

Redistribution is evident in our society. Family, as the smallest unit of society, performs simple redistribution. The
mother or father, as the head of the household, collects a part of his or her children’s income and allocates it to food
and pending bills. This serves as the basis for sustained community efforts under a political leader.
Explore!
Think of ways on how redistribution is being effectively practiced in your family, school, barangay, and municipality
or city.
Try it!
Get a partner. Think of at least three situations where small-scale redistribution can occur in the community.
What do you think?

How does redistribution contribute to the development of society?
Keypoints
 Economic institutions refer to the network of commercial organizations that determine how goods and
services are produced, generated, distributed, and purchased.
 In sociology, redistribution is the system of exchange that involves the centralized collection of products
from members of a group followed by the distribution of those goods among the members.
 In economics, redistribution refers to the collection of goods and services of people and groups to be given
by a central authority for allocation.
 In politics, redistribution is the process by which electoral districts are added, removed, or changed.
 Potlatch is a ceremonial distribution of property and gifts by the donor according to the social rank or status
of the recipients.
 Taxation is the process where the government collects taxes from people to turn into social services.
 Church tithes are the donations that are given to religious institutions to be used for their programs and
projects.
 A redistribution is a form of reciprocity. It differs from mere reciprocity, which is a back-and-forth two-
party exchange.
 The activities of the economic institutions play vital roles in shaping and maintaining the stability of the
global community.
 Family, as the smallest unit of society, performs redistribution.
Economic Institutions: Market Transactions
Objectives
At the end of the lesson, you are expected to:
 define market, market transactions, and market equilibrium,

 enumerate the different kinds of market structures and market transactions,
 demonstrate an understanding of market transactions as mechanism of distribution of goods and services by
making wise and informed decisions, and
 analyze economic organization and its impacts on the lives of people in society.
 What is a market?
 What is a market transaction?
 How do markets and market transactions affect the lives of people in a society?
Market
A market is a place or medium where buyers and sellers interact to transact economic goods and services. The
meaning of market is not limited to a certain place, location, or geographic area; rather, it focuses on people who are
willing and capable of buying or selling goods and services.
In a capitalist economy, markets answer the three basic economic problems of: what to produce, how to produce,
and for whom to produce.
Market Structures
Market structure is the classification of a market with regard to key characteristics, such as number of sellers and
buyers, entry barriers to the market, the control and determinant of pricing, and types of products in the market.
 A pure competition market is a market structure characterized by a large number of sellers and buyers,
homogenous products, and complete freedom of entry and exit of market players.
 A monopoly is a market structure characterized by a single seller of a well-defined product for which there
is no available substitute and high barriers of entry of other market players. The seller has complete control
of the pricing of goods and services.
 A monopolistic competition is a market structure characterized by a large number of independent sellers,
each producing a differentiated product in the market with a low barrier to entry of other players.
 An oligopoly is a market in which only few sellers comprise the entire industry with a relatively larger
number of buyers. Sellers, therefore, have the power over the price of products.
 A monopsony is a market in which there is only one buyer.
Market Transactions
A market transaction is the exchange of goods and services through a market where buyers and sellers agree on
the price and quantity of goods and services to be bought and sold in a specific place and time.
Market transactions taking place in the economy could be a tool in:
 measuring the total output of the economy or the Gross Domestic Product (GDP) of the country thereby
becoming one indicator of growth and development of a society, and
 providing the basic data that are used by economic planners and forecasters.
Types of Markets
There are different types of markets. Each one has unique characteristics and functions.
Physical Markets
This is a set up where buyers can physically meet the sellers and purchase the desired merchandise from them in
exchange for money.
Examples: shopping malls, department stores, retail stores
Non-Physical Markets or Virtual Markets

In such markets, buyers purchase goods and services through the internet. The buyers and sellers do not meet or
interact physically, but transact online instead.
Examples: Rediff shopping, eBay, Amazon
Auction Market
In an auction market, the seller sells his or her goods to the highest bidder.
Market for Intermediate Goods

Such markets sell raw materials (goods) required for the final production of other goods.
Black Market
This is a setup where illegal goods like drugs and weapons are sold.
Knowledge Market
This is a setup that deals with the exchange of information and knowledge-based products.
Financial Market
This market deals with the exchange of liquid assets (money). Financial markets can be further categorized into the
following types:
 stock market–a form of market where sellers and buyers exchange shares
 bond market–a marketplace where buyers and sellers are engaged in the exchange of debt securities,
usually in the form of bonds.
 foreign exchange market–a market where parties are involved in the trading of currency; In this market,
also called currency market, one party exchanges one country’s currency with an equivalent quantity of
another.
 predictive market–a setup where the exchange of good or service takes place for future use
Explore!
Imagine yourself in a street where lots of goods are being sold for lower prices. Will you still buy these goods even
though you are aware that these goods are most probably counterfeit? Will you still be patronizing them?
Try it!
Make a simple business plan for a unique product to be sold in a monopolistic market.
What do you think?

How does the continuous decrease of the price of petroleum in the world market affect the producer and seller of the
product? Does it affect the world's economy as whole? How?
Keypoints
 A market exists whenever there is an interaction between buyers and sellers.
 Market structures are mechanisms of the economy to answer the basic economic problems of production,
distribution, and consumption.
 Market equilibrium became the balancing force between demand and supply of goods in the market.
 A market transaction occurs because of the exchanges of goods and services between consumers and
producers.
Economic Institutions: Markets and State
Objectives
 differentiate the role of markets and states in running the economy,

 determine the dividing line between markets and states, and
 discuss the four competing economic models and analyze their impact in the world community.
 Why do many countries remain poor while others are rich?

 In our country, the rich become richer and the poor become poorer. Is there any explanation for this?
 Who will take the lead to solve these problems?
Markets and State

 A market is a place where buyers and sellers transact economic goods and services. It is also a mechanism
used by society for allocating and distributing the goods and services produced.
 A state is a group of people, more or less numerous, with a definite geographical area, with defined
territorial boundaries, independent of external control, and ruled by a government through laws where
inhabitants have to conform by force in the common interest. In economics, a state is always referred to as
the government.
 The market, as a mechanism used by different economic institutions in the distribution of goods and
services that the economy produced, always relies on the very mechanism it uses−the price of the products.
Meanwhile, the state uses its inherent power and authority in allocating goods and services.
The Dividing Line Between Markets and States

 In the Philippines, some products are purely market-driven. with some products, the government can
intervene in production and pricing. An example of this are utilities and selected essential services.
 In a global perspective, model market economies such as the United States and Singapore are
characterized by freedom of choice and enterprise, private ownership of all economic resources, a prevalence
of competition, and the presence of market mechanism. While in a state-driven economy like China, the
government largely controls the industry.
The two mechanisms significantly differ in the way they allocate goods. In a market economy, those who can afford
the price of the product have more, while a state-run economy has a principle of having something according to the
need.
Competing Models of Economic Organization and Their Impacts on Global Community

Market Economy Model
The market economy model of Taiwan, Korea, and Singapore prevails in the production of goods, competitiveness,
flexibility, and high growth rates that are manifested in the economy. A high level of inequality prevails, resulting to a
high incidence of poverty among people, a problem in the environment, and vulnerability to financial crisis.
State Capitalist Model

The state capitalist model of Russia and China shows the power of government in the production of goods but with
passivity in social and environmental issues. High and steady growth rate evident but a high level of inequality is also
manifested.
Central Planning Model
The central planning model of North Korea dominates the entire economic activity of production as well as the social
context. This model wants to create a classless society. In the long run, it is counter-productive, and lower growth
rate or even economic stagnation occurs.
Social Market Economic Model

The social market economic model of most European countries depends heavily on the role of the market in the
distribution and allocation of products. The economy and the government is very active in providing social welfare to
the people. This leads to equality and harmony among people and government, but a high level of taxation is
evident.
Let us analyze these four competing economic models and their impacts on the global community. It is notable that
the government, private corporations, and multinational companies have to join hands in uplifting the lives of the
people, protecting and preserving the environment, and creating a caring society so that this world would be a better
place to live in.
Explore!
Imagine yourself in North Korea as a travelling journalist-economist. What kind of story will you be writing about the
country?
Try it!
Based on this lesson, make a travelogue showing what countries you will be visiting based on economic status or
model.
What do you think?

There are fundamental standards or criteria in analyzing economic models as suggested by some economists. These
are:
 Is the living condition of people in society improved?

 Is the growth of economy aimed at raising the standard of living?
 Is the societal income equally distributed among members?
 Is there a guarantee that a standard of living is being maintained?
 Do established institutions respect human rights?
 Are there enough provisions for the education and health of the underprivileged?
Are these standards fit for the four competing models of economic organization? Why? Why not?
Keypoints
 Economic institutions evolve to distribute efficiently and allocate goods and service to members of society.
 A market is a place where buyers and sellers transact commercial goods and services. It is also a
mechanism used by society for allocating and distributing the goods and services produced.
 The state, always referred to as the government, is a group of persons, more or less numerous, with a
definite geographical area, defined territorial boundaries, independent of external control, and ruled by a
government through laws where inhabitants have to conform by force.
 In the Philippines, some products are purely market-driven. In some, the government can intervene in
production and pricing.
 In the United States, the model market economy is characterized by freedom of choice and enterprise,
private ownership of all economic resources and prevalence of competition, while in China, the government
largely controls the industry.
 The four competing economic models that greatly affect the global community are market economy
model, state capitalist model, central planning model, and social market economic model.
Nonstate Institutions: Banks and Corporations
Objectives
At the end of the lesson, you should be able to:
 define non-state institutions, banks, commercial banks, corporations, and articles of incorporation,
 enumerate the different kinds of banks and non-banking institutions,
 analyze the role of banks and corporations in the economy of the country, and
 discuss the functions of banks and corporations in the economy.
 What are non-state institutions?

 How do non-state institutions such as banks and corporations affect society?
Non-state institutions
Non-state institutions refer to institutions that are organized by private individuals or groups for the purpose of
providing services to the members of society. These institutions are not controlled by the government but are
regulated through laws and statutes of the state.
There are non-state institutions that play vital roles in the economy because they are the ones providing the needs of
the people that the government cannot provide. However, a corresponding price or payment is needed in exchange
for their services.
Typical examples are different kinds of financial institutions, specifically a bank, and different kinds of business
organizations, specifically a corporation.
Financial Institutions
Financial institutions are organizations that serve as bridges or intermediaries that facilitate the flow of money in
various transactions. This means that financial institutions serve as links between the source of funds, the depositor,
the fund user, and the borrower.
Banks receive savings and deposits of their clients. These may be loaned out to borrowers.
Example:
Juan dela Cruz has PhP 10,000.00, which he has saved from his salary as a manager. He deposits it
at Maharlika Bank, which offers a 2% interest per annum. This would mean that if he does not withdraw any of his
savings, he will get 10,000.00 + 2% = 10,200.00 after one year.
Now, Mr. Entrepreneur needs PhP 7,000.00 because he wants to put up a sari-sari store. He borrows PhP 7,000.00
form Maharlika Bank.
Can you see the flow of money? Juan gets more than PhP 10,000.00 after a year. At the same time, he is able to
help Mr. Entrepreneur put up a business. These would not have happened without the help of Mahalika Bank since
Juan and Mr. Entrepreneur do not know each other.
Banks started during the Renaissance period in Italy. The word 'bank' traces its origin from the Old Italian
word banca which means 'table' or 'bench,' and is where transactions occurred at that time.
The role of a financial institution as a link in the transfer of money from the source to the borrower is very important
to our economy.
Banks provide safe-keeping place for money and valuables of individuals. They also perform a role in settling
payments and credit intermediation.
Banking Institutions
The Bangko Sentral ng Pilipinas is known as the banks of all banks in the Philippines. It is the bank responsible
for the regulation, creation, and management of monetary supply in the country.
These are the different types of banks:
 Commercial banks accept savings deposits, check deposits, and time deposits. Examples of Philippine
commercial banks are Bank of the Philippine Islands and Metrobank.
 Thrift banks are categorized into stock savings and loan associations, savings and mortgage banks, and
private development banks. They consolidate the savings deposits of their members into a fund from which
their members can draw loans with interest. They also accept deposits from the public and provide loans for
small- and medium-scale enterprises.
 Rural banks cater primarily to farmers and small business people, mostly in rural areas.
Corporations
A corporation is an organization of people legally bound by a charter to conduct some type of business. It has a
legal entity separate from its owners. The type of business that a corporation wants to venture in depends on its
articles of incorporation.
Articles of incorporation are written applications to the government requesting permission to form a corporation.
This will give the name, address, and type of business for the corporation; the names of the officers, and the initial
amount of money being put into the business.
Alfred Chandler, a renowned business historian, explained how modern corporations propelled the growth of modern
economy and was fascinated on how the people that make up large corporations managed to "coordinate complex
production processes" and "produce the wealth of the nations."
The following are the advantages of corporations as business organizations in the economy:
 easy to raise funds–since the corporate form is the most effective for raising money
 limited liability–the concept that owners of the business are only responsible for its debts up to the
amount they invest in the business
 unlimited life–not ceasing to exist if a major stockholder dies
 specialized management–affording to have specialized managers to run the business
 shared risks–spreading business risks among many owners
The following are the disadvantages of corporations as business organizations in the economy:
 difficult to start–needs government approval before starting the business

 less direct control–owners that are usually far from the day-to-day operation of the business
 double taxation–corporate taxes that need to be paid by the corporation and the owner who received
dividends from the profit
 limited activities–limited activities by the article of incorporation
Explore
One of the hottest issues in the Philippine banking industry is the $81 million allegedly stolen from the Bank of
Bangladesh and laundered into the Philippines through the banking system and casinos.
What do you think is the impact of this particular case to the Philippine banking industry and to the whole Philippine
economy? Are you in favor of the on-going investigation by the Senate about the issue? Will you still trust our banks
and big financial corporations?
Try it!
Put aside a portion of your weekly or monthly allowance in a bank. Document your experience in opening your
savings account.
What do you think?

Matthew, Mark, and John, being good buddies since high school, decided to put up a corporation named MMJ Corp.
The articles of incorporation state that they will be selling beauty products. They borrowed money from the banks
using their cars as collateral. The first 3 years of operation became successful because they were able to dominate
the market.
As years passed, numerous competitions emerged, their sales gradually dropped, and their profits are now dwindling
and near bankruptcy. They are behind in loan payments, owes money from suppliers, behind workers'
compensations, and owes taxes to the government.
It seems as if MMJ Corp. will go out of business. Matthew, Mark, and John are worried that creditors will force them
to turn over their personal savings and sell their cars to have money to pay their business debt.
1. Can MMJ Corp. creditors force Matthew, Mark, and John to turn over their personal savings and sell their cars
to pay the debts? Why or why not?
2. Do you think it is fair to the three buddies? Do you think it is fair to the creditors? Explain.
Keypoints
 Non-state institutions refer to institutions that are organized by private individuals or groups for the
purpose of providing services to the members of society.
 Financial institutions are organizations that serve as bridges or intermediaries that facilitate the flow of
money.
 The Bangko Sentral ng Pilipinas is known as the banks of all banks in the Philippines.
 There are three kinds of banks: commercial banks, thrift banks, and rural banks.
 A corporation is an organization of people legally bound by a charter to conduct some type of business.
 The advantages of corporations are: easy to raise funds, limited liability, specialized management, and
shared risks.
 The disadvantages of corporations are: difficult to start, less direct control, double taxation, and limited
activities.
Nonstate Institutions: Cooperatives and Trade Unions
Objectives
 define cooperatives and trade unions,

 explain the different types of cooperatives and examples of trade unions,
 enumerate the purposes of organizing cooperatives and trade unions, and
 discuss the functions of cooperatives and trade unions as non-state institutions that promote self-help among
people in society.
 Are there ways to improve the predicament of many low-income individuals who continually struggle to meet
their daily needs?
 Do people have the power to improve their lives through collective efforts?
 Is social justice attainable in this country?
What are Cooperatives and Trade Unions?

A cooperative is a voluntary organization of people who have agreed to pool their resources together to undertake
an economic enterprise to meet their everyday needs. A cooperative is something that they democratically manage,
control, and share the economic benefits by participation and patronage (Cooperative Development Authority, CDA).
Trade unions or labor unions are voluntary associations of either employees, employers, or independent workers
to protect their interest and become an instrument of defense against exploitation and maltreatment.
The commonalities of these two non-state institutions are the following:
 organized and formed by a group of people to protect their interest,

 promotes the common good among members, and
 voluntary in nature.
Below are the different types of cooperatives.
Here are some examples of trade unions.
The Differences Between Cooperatives and Trade Unions

As to the Purpose:
As to Function:
Cooperatives and Trade Unions as Means of Promoting Self-help Towards Economic
Development
Cooperatives are self-help organizations presently utilized by the government as more efficient tools for economic
development. These are also business enterprises which affiliates own, manage, and control following accepted
democratic principles. Members are not organized primarily for profit nor to serve other persons, but to address the
needs of their members. Memberships in cooperatives are voluntary and open to all those who need their services.
Members share economic benefits from unions in proportion to the individual member's patronage of the business or
enterprise.
Trade unions are always fighting for better wages by improving employees pay and other benefits such as holiday
entitlements.
Functions:
 Secure improvements in employees' working conditions, including hours of work, health or safety at work,
improving pensions, and industry injury benefits.
 Provide improved standards of living.
 Safeguard the interest of workers by encouraging firms to increase employee participation in decision-
making.
 Prevent employees from exploitation.
With trade union on a place, strikes can be avoided, thus resulting in stability and growth of the firm. This promotes
unity, spirit of self-reliance, and self-respect, and may lead to economic development.
Explore!
Imagine a construction worker earning minimum wage with no additional benefits from the employer, no security of
tenure from his work, and can be terminated any time of the day. What can cooperatives and trade unions do to
improve his condition?
Try it!
Now, you are aware that cooperatives and trade unions are vital institutions in the economy that foster self-help and
self-reliance. Soon, if given a chance, what role do you prefer to play, an employee or an employer? Why? How
would you promote the importance of cooperatives and trade unions?
What do you think?
We are aware that different kinds of cooperatives and trade unions were organized and formed in various parts of
the country, but still, some of their members are struggling every day to meet their needs. What do you think is the
reason why most cooperatives and trade unions failed in fulfilling their functions? Are there external factors that
contribute to their failure? What do you think are these factors?
Keypoints
 Non-state institutions refer to institutions that are organized by private individuals or groups of people for
the purpose of providing services to the members of society.
 A cooperative is a voluntary organization of persons who have agreed to pool their resources together to
undertake an economic enterprise to meet their everyday needs.
 A trade union is a voluntary association of employees, employers, or independent workers to protect their
interest.
 The different types of cooperatives are consumer, credit, producer, marketing, and service.
 Examples of trade unions are transport groups, workers welfare organizations, and employers’
associations.
 The functions and purposes of organizing and establishing cooperatives and trade unions are critical in
promoting economic development.
Nonstate Institutions: Transnational Advocacy Groups
Objectives
 define transnational advocacy groups,

 explain the functions of transnational advocacy groups, and
 discuss the significance of transnational advocacy groups in society.
You may already know that non-state institutions exist to play its part in local and international politics and policy-
making.
Do you know the specific functions and roles these non-state institutions play in society?
There are numerous kinds of non-state institutions that play roles across macro-level social concerns. One of these
institutions is a transnational advocacy group which will be discussed and elaborated in this lesson.
What are Transnational Advocacy Groups?

Transnational advocacy groups are networks, not bound by any national or international border, that defends a
cause or proposition. They are a group of people from different walks of life who advocate for policy changes that
are in line with their interests and the interests of others.
Transnational advocacy groups are greatly established through interactive and communicative networks across
numerous countries that operate under the same advocacy or principle. Though they may have little power in the
traditional politics, they have learned to appropriate their limited power in such a way that they can influence social
change and belief systems.
What are Transnational Advocacy Groups?

Transnational advocacy groups use a variety of political tools to influence international policy and practice. These
tools are:
 information politics–the ability of groups to control or limit the release of information so as to provide a
realistic and broader picture of a certain issue; Doing so does not necessarily guarantee a good image for the
government.
 symbolic politics–linking past events to another in order to provide a possible outcome for a similar,
presently-occurring event.
 leverage politics–creating linkages with other groups to gain moral and financial support in advocacy.
 accountability politics–monitoring the action of states to ensure their commitment; The responsible state
or company’s accountability on the matter shall be made known to the public should any discrepancy
between commitment and result occur.
Transnational advocacy groups may be made up of non-government organizations (NGOs), politicians, bureaucrats,
or representatives from private corporations and businesses.
Examples of Transnational Advocacy Groups

 International organizations for human rights (e.g. Center for Individual Rights)
 Non-government organizations for environmental welfare (e.g. Earth Rights International)
 Groups advocating for women’s rights (e.g. International Women’s Tribune Center)
Functions of Transnational Advocacy Groups

 They change political and policy-making focus: Issues raised by transnational advocacy groups are
actual issues of the common population. Implicating moral and emotional forces, these groups refocus the
most important issues in society.
 They redefine issues: These groups, through wise use of information, repackage issues into more general
and unbiased forms. As such, positions on various issues are influenced to change, with some being on the
advocacy networks’ favors.
 They reframe information: As mentioned, transnational advocacy groups learned to control the flow of
information to include unbiased and broader pictures of existing issues. In doing so, a moral and emotional
appeal will likely influence people to raise their advocacy and concern for the phenomenon.
 They give a voice to the voiceless: Because of their moral and emotional impact on the public, coupled
with their advocacy for vulnerable groups, transnational advocacy groups give the voiceless and vulnerable
people a chance to raise their concerns in the international scene.
Significance of Transnational Advocacy Groups in Society

Transnational advocacy groups have become the voice of the people in raising important, realistic issues that a vast
number of people are experiencing worldwide. In society, these groups maintain considerable influence through
information dissemination—enough to shift the focus of states in dealing with more immediate causes and concerns.
As a result, transnational advocacy groups may change international policy or practice to fit any raised concern or
issue.
What makes transnational advocacy groups so important is their advocacy.
Explore!
Transnational advocacy groups have gained success because of their take on important issues that are relevant in
the international scene. Can you identify some of these issues that may be advocated by such groups?
Try it!
Think of a cause that you are very much interested to advocate. Create a poster or infographic that tells about your
chosen advocacy. You may use actual drawing materials or online software to create your poster. Be creative in
making your poster. Once finished, you may opt to upload your advocacy poster in any social media platform.
What do you think?

How are transnational advocacy groups able to get control of information dissemination?
Tips
 Transnational advocacy groups are made up of people with the same set of advocacies and beliefs. Being
part of support does not require any educational or career accomplishment.
 Transnational advocacy groups may form networks that span across countries or continents. This is the
reason why they can easily involve themselves in tackling international issues.
Keypoints
 Transnational advocacy groups are networks, not bound by any national or international border; that
defend a cause or proposition.
 Transnational advocacy groups make use of political tools such as information, symbols, leverage, and
accountability to ensure the success of their advocacies.
 Transnational advocacy groups may be made up of non-government organizations (NGOs),
politicians, bureaucrats, or representatives from private corporations and businesses.
 Transnational advocacy groups primarily utilize their ability to control information in tackling international
concerns and issues.
 What makes transnational advocacy groups so important is their advocacy.
Nonstate Institutions: Development Agencies
Objectives
 define development agencies,

 explain the significance of development agencies in society, and
 discuss the millennium development goals and the role of development agencies.
Some developed countries today were not what they used to be during the early to mid-1900s. What form of
assistance did these countries encounter that helped shape their status today?
Development is an issue that all nations face. While the state has always focused on the matter, some non-state
institutions also play a part in targeting specific aspects of society for development.
What are Development Agencies?

Development agencies are local or international groups committed to pursuing specific developmental agendas of
the state. Initially seen as an immediate response to a common emergency, the rise of such agencies began after
the World War II when there were war damage, industrial decline, and dereliction. Over time, development agencies
became popular methods of shaping economic strategies that can uplift the state. It is reported that there are over
15,000 such organizations existing worldwide today.
These are the features and functions of a development agency:
 Economic roles: A development agency can take on entrepreneurial approaches—mediating between the
government and the market—especially when such tasks are outside of government responsibility. As
leverages are formed, investment failures are avoided.
 Leadership roles: Development agencies set out long-term developmental goals. As independent groups,
their capability to shape goals and outcomes are not influenced by electoral or political changes.
 Governance and coordination roles: Agencies coordinate with the state in the attainment of
developmental practices and methods. They help overcome the jurisdiction of the public sector in making a
sole decision on developmental goals.
 Implementation roles: A development agency can formulate its team to facilitate attainment of a defined
growth strategy. This team is focused on project management, instrument development, and business or
investor-facing services.
While development agencies exist to aid in the attainment of developmental goals, their local and international
functions are continuously updated and reinvented to suit the needs of the state.
Examples of Development Agencies:
 International Development Organization

 Organization for Economic Cooperation and Development
 Overseas Development Institute
Significance of Development Agencies in Society

 Development agencies assist the government in attaining a well-developed society through well-studied
developmental strategies and policies.
 Development agencies exist to promote business efficiency and competitiveness to increase economic growth
and sustainable development.
 Development agencies actively provide avenues for honing employment strategies and opportunities.
Millennium Development Goals and the Role of Development Agencies

In 2000, the United Nations (UN) sought measures to enhance human life by aiming to attain eight developmental
goals by the year 2015. The Millennium Development Goals (MDGs) project, as they are collectively called,
called action and support from nations and local and international development agencies to promote the following
causes by 2015:
1. Eradicate extreme poverty and hunger

2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria, and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development
The assistance provided by all agencies involved proved to be significant as the UN was able to gather enough data
to assess and address each MDG. However, according to reports, further data are needed for a post-2015
development agenda that will be tackled by the United Nations in the following years.
Explore!
Development agencies are not only limited to the local scene but also active in tackling and addressing international
policies and issues. Partnerships with such groups continue to expand because of the seemingly successful
businesses and developmental strategies brought about by various groups on different issues.
In your perspective, what would occur if no development agencies existed to aid states?
Try it!
Read about the Millennium Development Goals and choose one of the eight major issues tackled. Upon making your
choice, try to find a movie or video clip that talks about your chosen issue. You may watch more than one clip if you
like. After watching, try to reflect on the impact of such global concerns to your local community or country.
What do you think?

What development issues should development agencies prioritize to resolve?
Tips
 Development agencies are available and functional in any country, regardless of that country's level of
development. Wealthy and developed countries are no exemption from needing the help of development
agencies to reach their full potentials.
 Development organizations may be based locally or abroad, and may tackle local or international issues that
are relevant to an individual nation or state.
Keypoints
 Development agencies are local or international groups committed to pursuing specific developmental
agendas of the state.
 Development agency has four functions and features, namely: economic, leadership, governance and
coordination, and implementation.
 Development agencies assist the government in attaining a well-developed society through well-
studied developmental strategies and policies.
 The Millennium Development Goals project was created by the United Nations in 2000 to address eight
relevant issues and developmental challenges by 2015.
Nonstate Institutions: International Organizations
Objectives
 define international organizations,

 explain the functions of international organizations, and
 discuss the significance of international organizations in society.
You may be familiar with groups that are actively existing across various nations. Seemingly, there is a headquarter
in every country for such groups.
 What are these groups?

 What are the reasons they are situated across many countries?
 Organizations that have branches in numerous countries are known as international organizations. These
organizations play a prominent role in facilitating global and international changes and advocacies that
demand the betterment of a certain cause. In this lesson, you will learn more about international
organizations and their contributions to society.
 What are International Organizations?
 International Organizations are groups that promote voluntary cooperation among its members. These
started out during the rise of city-states in Greece, but significantly emerged during the French Revolution.
Further improvements on the purpose and functions of international organizations were laid out during the
early 19th century when nations decided that such a group is needed to preserve the status quo and avoid
inter- and intra-state conflicts.
 At present, international organizations may or may not be handled by the government. It was reported that
there are 6,000 non-government organizations compared to only 250 under the government.
 International bureaucracies manage International Government Organizations (IGOs), but authority remains
ultimately in the state. IGOs work together with non-government international organizations to successfully
reach a common goal. However, note that in this lesson, international organizations are only taken and
discussed in the context of non-state or non-government organizations.
What are International Organizations?

The following conditions should be met for one group to be called an international organization:
 There must be membership from at least three states or nations.

 Activities must occur across several states.
 Members must have formally agreed to be part of the organization.
Apart from the abovementioned conditions, international organizations must also follow the rules set by the
International Law Commission to function legally as a recognized international organization.
Examples of Non-Government International Organizations
 United Nations Environment Program
 European Union
 World Health Organization
Functions of International Organizations

 an acquaintance of information: International organizations have the capability to access relevant
information for a specific cause. They also have the capability to monitor trends and progresses of
longitudinal empirical researches.
 provide service and aid: These organizations, especially the bigger ones, provide various types of services
to people depending on the cause. For example, an international organization tackling health may provide
free vaccines to a specific nation hit by a dangerous epidemic.
 provide avenues for communication: Being part of an international organization means that members
from different parts of the world get to easily voice out their concerns to one another. This may lead to
easier communication and work flow.
 provide avenues for settling disputes: Because international organizations’ members continuously
communicate with each other, disputes and misunderstandings over certain issues and concerns may easily
be resolved. As such, organizations provide opportunities for communication through regular meetings and
updates.
Significance of International Organizations in Society

International organizations establish a connection to issues not only occurring in a certain nation, but also across the
organizations’ various locations. Because of this, an international issue can be made into a cause.
People of different societies and nations—not limited to social class or status—are made part of a global community
that will aim to resolve, as one unified group, identified international conflicts as well as provide outcomes suitable to
address global issues being tackled.
Explore!
Long-existing international groups have already made a name for themselves on the world stage. With many issues
and challenges to tackle, each international group had made a specific focus on their cause, function, and existence.
If you were to put up your own international group, which countries would you choose to put it up? What cause will
you advocate?
Try it!
Get a piece of paper and list down all international groups that you are familiar with. Take your time in doing so.
Once finished, search online a list of other international organizations you may not be familiar with.
What do you think?

How does an international organization operate if it is situated in different countries?
Tips
 International organizations may vary in size—dependent on the number of offices and countries they
partnered with. Some organizations are big, with headquarters in more than 100 countries.
 International organizations, like development agencies, may also put a focus on developed countries. While
most international organizations’ agendas are focused more on developing countries, the aim to target a rich
and well-developed country is also plausible.
Keypoints
 International Organizations are groups that promote voluntary cooperation among its members.
 The following conditions should be met for one group to be called an international organization: (1) there
must be membership from at least three states or nations, (2) activities must occur across several states, and
(3) members must have formally agreed to be part of the organization.
 Functions of international organizations include: an acquaintance of information, provide service and
aid, provide avenues for communication, and provide avenues for settling disputes.
 International organizations establish a connection to issues not only occurring in a certain nation but also
across the organizations’ various locations. Because of this, an international issue can be made into a cause.

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Cultural, Social, and Political Institutions, Understanding Culture, Society, and Politics

Social Organizations: Groups within Society (Primary and Secondary)

 explain how society is organized,

 How would you describe your relationship with your family?

How Society is Organized

The Threefold Nature of Social Life

Social Groups and Organizations

Groups within Society

Classroom and work environment are other examples of a secondary group.

 name or description of the group

What do you think?

Is being a member of a particular group a matter of choice?

Different Social Groups of Social Organization

A generous business person may make substantial contributions to a political candidate.

a parent-teacher association at a particular school

colleges and universities

In-Group and Out-group

Examples include friendship groups, families, and religious groups.

Issues Surrounding In-groups and Out-groups

What do you think?

 What is a role model for you?

Groups within Society

Reference Groups and its Comparative Functions

Reference groups come in different forms and classifications.

What do you think?

 discuss what a social network is and how it works, and

What roles does social media play in your life?

Groups Within Society and the Rise of Social Networks

Ties and Nodes

The Importance of Social Networks

What do you think?

Can society survive without the existence of social networks?

Social and Political Structures

The Need for Political Organizations

Types of Political Organization

What do you think?

 enumerate and explain the three types of authority,

Three Types of Authority

What do you think?

 define and explain the functions of economic institutions,

The term 'economic institutions' refers to:

Examples: producers, manufacturers, retailers, wholesalers, buyers

Examples: competitive markets, the banking system, a system of property rights

Economic Institutions, Reciprocity, and the Impacts on the Global Community

See the illustration below.

 blue: economic institutions

What do you think?

 explain the concepts of transfer or transfer payment concerning economics, and

Examples: producers, manufacturers, retailers, wholesalers, buyers

Examples: competitive markets, the banking system, a system of property rights

The Functions of Economic Institutions

Here are some of the functions of economic institutions in society:

 Enhance development through financial services

How Transfers Work in the Government

 the Department of Education (DepEd) with PhP 411.905 billion,

Economic Institutions, Transfers, and the Impact on the Global Economy

What do you think?

 explain the concepts of redistribution in relation to sociology, economics, and politics;

Potlatch in Relation to Economics

The table shows a comparison between redistribution and reciprocity.

Redistribution in the Family or Community

What do you think?

 define market, market transactions, and market equilibrium,

Market transactions taking place in the economy could be a tool in: