1.5 External environment

Question 1

Sociocultural factors

Answer 1

Sociocultural factors relate to the way people live and what they believe and value.

Question 2

Technological factors

Answer 2

IT technology has caused a blurring of the boundaries between work and leisure. The development of these devices has been accompanied by new software and applications that can reduce costs and open new markets for businesses.

Question 3

Economic factors

Answer 3

Inflation, Deflation, Recession, Depression

Question 4

Environmental factors

Answer 4

Climate change, etc.

Question 5

Political factors

Answer 5

Politics is ever-present in business decision-making. From a sole trader seeking permission from a local government to open a new outlet, to a multinational company seeking access to oil fields, all businesses have to take political factors into account.

Question 6

Legal factors

Answer 6

Business must at a minimum abide by all existing laws and regulations. These are generally made by central governments, but additional rules may be set by local authorities.

Question 7

Ethical factors

Answer 7

Businesses are under increasing pressure to behave as good corporate citizens