Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business and Management > 1.5 External Environment > Flashcards

1.5 External Environment Flashcards

1
Q

STEEPLE

A 
Social
Technological
Economical
Environmental
Political
Legal
Ethical
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Social

A

Size of population
Structure of population
Age groups
Education level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Technological

A

Technological advancement

Need to invest in R&D

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Economical

A

GDP (Gross Domestic Product) growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Business Cycle

A

Fluctuations of the real GDP around the long term trend

Recession g<0 (growth)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Consumers income falling

A

Related to unemployment increase
Falling demand
Less sales

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Unemployment increases

A

Related to consumers income
Less pressure on wages to rise
Cost of production may fall

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Other business cycle

A

Lower Investments

Firms Failing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

V-Shape Recession

A

Economy falls quickly but recovers quickly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

U-Shape Recession

A

Economy falls, then recovers slowly but steadily

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

L-Shape Recession

A

Quick fall then recovery takes very long (sometimes years)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Boom

A

Lower Unemployment (Increase in wages/higher costs)
Rising inflation
Rising consumers income (high demand/high sales)
High Investments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

International Trade

A

Trade between suppliers and customers who are located in different countries (companies selling abroad/companies buying from abroad)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Reasons for international trade

A

Some products can only be produced in specific places (better products at a lower cost)
Resource Endowment
Some products are sold at a lower price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Exchange Rates

A

The price of a currency in relation to another currency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Appreciation of Currency

A

the increase in its price in terms of another currency

17
Q

Depreciation of Currency

A

The fall in the price of a currency in terms of another currency
A strong currency benefits importers of the country and penalises exporters
A weak currency is good for exporters and bad for importers

18
Q

Economic Policies

A

Supply Policies
Demand Side Policies
Fiscal Policy
Monetary Policy

19
Q

Demand Side Policies

A

Fiscal Policies: Government

Monetary Policy: Central Bank

20
Q

Fiscal Policy

A 
Fiscal Budget (taxation (T)/ Government spending (G))
If T > G -> Surplus = Contractionary Policy (reduce GDP/reduce inflation)
If G > T -> fiscal deficit = Expansionary Policy (increase GDP/reduce unemployment)
21
Q

Government Spending

A

Industrial policy (to help industries grow)

22
Q

Taxation

A

Corporate taxes: (tax on profits) -> Reduces profits
Indirect Taxes: Eg. Sales taxes or VAT (increase cost of production) -> the impact on the business prices depends on the price of electricity of demand (ie: how sensitive consumers are to price changes)
Payroll taxes: Increase prices ad labour costs are higher

23
Q

Subsidies (negative tax)

A

The opposite effect of tax

24
Q

Monetary Policy

A

Central Bank
Expansionary: increase GDP - reduce unemployment
Contractionary: reduce GDP - reduce inflation

25
Q

Interest Rate

A

Instrument of Monetary Policy
Price of money over time
High interest rate (contractionary mon pol)
More expensive to borrow
Savings are more profitable
Appreciation of currency (bad for exporters) -> lower investment/consumers spend less (demand falls/sales fall) Low interest rate (expansionary mon pol)
Opposite of high interest rate

26
Q

Inflation

A

Sustained increase in prices

27
Q

Cost push inflation

A

Wages or price of resources increase. So firms may try to increase prices to keep profit margins constant. If they can’t they will try to find new sources of materials/components or dismiss workers.

28
Q

Demand pull inflation

A

too much demand relatively to the supply. As firms cannot cope with the high demand they will try to increase prices

29
Q

Environment

A

Business can affect the Environment (locally)
Waste materials (non-renewable)
Traffic congestion (traffic delays, accidents)
Pollution (air, waste, water

30
Q

Leads to Major Global Effects

A

Resource Depletion

Climate Change

31
Q

Environmental Issues that affect the business

A
  1. Firms must try to be ‘environmentally friendly’ as consumers are changing their business decisions
    - Changing packaging
    - Energy efficient Eg. cleaner technology
    - Reduce carbon footprint
    - Changing products Eg. Electric cars
  2. Environmental regulations
    - Tax on pollution
    - Subsidies to clean energy
  3. Becoming environmentally friendly
    - Gives a compatible edge
    - Creates a ‘green image’
  4. Pressure groups
    - Harm businesses
32
Q

Politcal

A

Political Stability
Good institutions (justice, markets -> property rights)
Form of government
Economic System -> Capitalism ( + or - government intervention) vs Socialism (lots of government intervention

33
Q

Legal (constraints)

A

Employment laws (flexible labour markets, rigid labour markets

34
Q

Ethical

A 
Depends on the values and culture of the place where the company is
Moral code (implicit and explicit)
35
Q

3 ethical dilemmas businesses must confront

A

Child labour
Shouldn’t bribe government officials
Corruption in business practices

Business and Management (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions