1.5 External influences on business

Question 1

What are the different stakeholders of a business and what do they want?

Answer 1

• Managers - bonuses and long term success
• Pressure groups - influence business decisions and actions
• Employees - want good pay and working conditions
• Customers - value for money
• Local community - local investment and limited pollution
• Government - low unemployment and competitive markets
• Suppliers - regular orders
• Owners/shareholders - profits and return on their investment

Question 2

Positive effects on shareholders.

Answer 2

• receive return on investment
• employees and managers receive income, rewards, financial security
• customers recieve high-quality products and good service at reasonable price

Question 3

Possible negatives in stakeholders

Answer 3

• local community can suffer because of pollution in environment
• shareholders lose investments
• employees work under poor conditions

Question 4

Technology influence on business

Answer 4

• e-commerce
• electronical payment systems
• digital communication
• social media

Question 5

What are the benefits of consumer law?

Answer 5

• less likely to be fined or sued if compliant
• compliant businesses considered professional - customer loyalty
• improved relations with stakeholders
• good publicity

Question 6

What are the drawbacks on consumer law?

Answer 6

• businesses must keep up to date
• laws can restrict business operating as they wish
• changing products and practices can be costly
• bad publicity if do not comply
• consumers can use law to take legal action against business