1.5 understanding external influences on business Flashcards
What is a stakeholder?
A stakeholder is anyone who is affected by a business.
Who are the stakeholders in a business?
shareholders (owners), employees, customers, managers, suppliers, local community, pressure groups, the
government.
Why are owners the most important stakeholders?
They make a profit if the business is successful and decide what happens to the business. In a limited company the shareholders are the owners and shareholders usually want high dividends and a high share price.
Why are managers and employees important stakeholders?
Managers and other employees are interested in their job security and promotion prospects. Employees also want a decent wage and good working conditions. So they may benefit most when objectives are based on profitability and growth.
what are suppliers important stake holders?
A firm buys its raw materials from suppliers. If the firm is profitable and grows it’ll need more materials and the supplier will get more business. So suppliers benefit most when the firm sets objectives based on profitability and growth.
Why is the local community a stakeholder?
1) The local community will suffer if the firm causes noise and pollution.
2) They may gain if the firm provides good jobs and sponsors local activities.
3) If the business employs local people these employees will then have money to spend in local shops which is good for the local economy.
4) So the local community may benefit when objectives are based on minimising environmental impacts, ethical considerations, profitability, and growth.
Why is the government a stakeholder?
The government will receive taxes if the firm makes a profit. They may benefit most when objectives are based on profitability, Growth, or job creation.
Why are customers important stakeholders?
Customers want high-quality products at low prices. They may benefit when objectives are based on customer satisfaction.
What is a pressure group?
A pressure group is an organisation that tries to influence what people think about a certain subject.
What can a pressure group influence?
They can influence the decisions a firm makes by creating bad publicity for the firm if they don’t agree with the firm’s actions.
What things will a business need to keep in mind if they want to survive?
1) No business can ignore its customers. If it can’t sell its products it won’t survive.
2) A business may want to hold onto its money for as long as possible but suppliers will become unhappy if they’re not paid on time.
3) If a business doesn’t have happy workers it may become unproductive.
4) A company may not mind being unpopular in the local community if it sells most of its products somewhere else.
What is E-commerce?
E-commerce is using the internet to buy and sell products.
What does it mean if a business uses E-commerce
E-commerce means that firms can reach wider markets compared to just having traditional shops.
Why is it good to use E-commerce?
E-commerce can be really convenient for consumers - it means they can buy products from all over the world at any time of the day and they don’t have to spend ages queuing up to buy products.
What do firms have to do in order to use E-commerce?
Firms have had to adapt to e-commerce as it’s become more important. For example, they’ve had to build websites, employ IT specialists an develop systems to distribute products to online customers.
What technology can a firm use for E-commerce?
Websites, email, mobile apps, live chats, and video calls.
Why is website a good way for a firm on E-commerce?
Websites are a great way to communicate with customers e.g. by posting blogs or providing customer service (such as FAQs). Websites can also be used to publish reports to shareholders.
How can a firm use emails in E-commerce?
Email is a very quick way of communicating with stakeholders, either on a personal level (e.g. to respond to a customer query) or on a bigger scale (e.g. to tell all the employees they can go home early).
Why are mobile apps good for E-commerce?
These are programs used on mobile devices, such as smartphones or tablets. They are usually used by firms to communicate with customers, for example by giving information about where stores are located, the products the company sells, and any special offers.
Why are live chats useful for E-commerce?
Live chats are an instant messaging service. They have many uses e.g. employees can use them to talk to each other from different locations, or customers can use them to speak with a customer service advisor.
Why are video calls good for E-commerce?
Employees who work for the same business in different locations may use video calling to hold meetings, rather than travelling to meet. This can also be a good way for businesses to communicate with important shareholders, who may all live in different places.
Why is social media good for E-commerce?
Social media makes it really easy for users to share information with other users - information can be in many forms, such as written messages or articles, pictures, videos, or links to other sites.
Why is social media useful for businesses?
Social media is a great way for businesses to communicate it can be used to display lots of different types of information, it can be updated regularly and it can be seen by loads of people at once.
Why do businesses use social media?
To provide customer service, to advertise their products, or to promote local events.
What are the different types of payment systems?
online payments, chip and pin, Contactless payments.
How will adapting to new technology help a business?
Businesses can often use new technology to carry out processes in place of people. This can lead to reduced costs in the long term, e.g., fewer man-hours are needed to carry out tasks.
What could be a factor affecting the business to adapt to technology?
Adapting to new technology can be very expensive. For example, a business may have to buy equipment or train staff to use new computer systems. They may also need to hire staff with the skills to use the new technology.
what should businesses keep in mind when hiring new employees?
Workers aged 24 or over have to be paid the national minimum wage and workers aged 25 and over have to be paid the national living wage this is slightly more than the national minimum wage.
What does the national minimum wage and the national living wage mean?
The NMW and the NLW mean that companies can’t cut their costs by paying workers less than the legal minimum. If they do they are breaking the law.
What will happen if a company doesn’t pay it’s staff enough?
If a company doesn’t pay its workers enough it could be given large fines. It could also get bad publicity and consumers might stop using the business.
How will the NMW and the NLW effect the business?
The NMW and the NLW can increase a firm’s costs. this can lead to increased prices meaning a possible fall in sales and a reduced income for the firm. Some firms may not be able to afford to pay the NMW and the NLW to all of their staff, so may have to lose some staff in order to survive.
