4. External Influences Flashcards
Term 4 Miss Blackwell External Influences Complete
National Minimum Wage
The minimum pay per hour, workers of school leaving age are entitled to, by law.
Who reviews the National Minimum Wage?
The Government
The minimum wage rate is _______ for each age group
different
National Living Wage
This is a new minimum wage rate for those aged 25 and over, as of 2017.
Describe 3 consequences as a result of a lack of compliance with legal factors
Fines
Have to reimburse any underpayments
Bad publicity - deters future employees and customers
What is a contract?
A contract is a legally binding agreement between 2+ parties.
What can the aggrieved party do if the contract is broken?
Recover damages using the fine paid by the contract breaker
What is the law that relates to the correct indication of the amount of a product being sold?
Weights and Measures Act
What is the penalty for breaking the Weights and Measures Act?
Vendor receives a fine
Explain the Data Protection Act
Personal info must be stored securely and for a limited time. Cannot sell on information
What is the maximum penalty for breaking the Data Protection Act
£500,000
Explain the Health and Safety Act
Relates to the minimum safety requirements (temp, safe floor + air, guards on machinery) Policy MUST be communicated to employees - who cannot misuse equipment
What is the sanction for breaking the Health and Safety Act?
Criminal prosecution/fine
What is the law: “Smoking in the workplace”
- Must go outside
- Agreed policy in place
- Liable for fine/prosecution if fail to comply
What is the law (with 2 names) known as that refer to the rights of the consumer?
Consumer Rights Act
Sale of Goods Act
What are the 3 main principles of the Consumer Rights Act?
- Goods must fit their description
- Goods/services must be of a satisfactory quality
- Fit for purpose
Consumer Rights:
Full Refund
Within 30 days regardless of the business’ refund policy
Consumer Rights:
Beyond 30 days
Seller does not have to refund, could offer an exchange, partial refund or a repair
Consumer Rights:
6 years
The amount of time to complain about goods
What is meant by “Intellectual Property”?
Intangible property that is the result of creativity
e.g song melody
Trademark
- Apply for: won/lost
- Used to indicate the source of a good and protect a business name/slogan/logo
Copyright
The legal ownership of material such as books, music and films which prevents these being copied by others
Do you have to apply for copyright?
No, it is an automatic right
Don’t have to apply
What is Planning Legislation required for?
Building something new
Making a major change
Changing the use of a building
What do you receive if you do not get Planning Legislation?
An enforcement notice
What are the 2 options to do with an enforcement notice?
Ignore it - illegal
Can appeal against it
What is the purpose of planning legislation?
To be fair to neighbours and rectify issues before it begins
State 2 environment related legislations
COSHH
Environmental Protection Act
What is involved with COSHH?
Businesses must prevent harm to health, plan for emergencies, train employees and maintain measures in the aim of preventing harm to employees, contractors and others
What is involved with the Environmental Protection Act?
- Waste management license
- Clean air (smoke, noise, dust and steam)
- Litter (offence to leave it)
- Genetically modified materials - risk assessment required
What does FCA stand for?
Financial Conduct Authority
What does the FCA do?
Regulates the conduct of 58,000 businesses
Aims to make markets and the overall economy work well
Regulates pensions, loans, credit cards
How does the FCA encourage competition?
The FCA arms customers with the info that they need to shop around. More shopping around forces businesses to compete on factors other than price
What are the FCA’s 3 operational objectives?
- Protect consumers
- Protect financial markets
- Promote competition (works with the CMA)
What are examples of technology within businesses?
Computer hardware/software Computer calculation Internet connectivity Wireless charging Automation Devices e.g. tablets
What are the advantages to the business of using technology?
\+ Faster systems \+ Easier communication \+ Reduced costs in the long term due to reduced inefficiencies \+ Remote working possible \+ Reduced need for physical storage \+ Customer convenience
What are the disadvantages to the business of using technology?
- High initial costs: training and data protection
- Job losses
- Reliability?
- Demotivated employees: may resist change
International Trade
Selling across borders
Why do we want to trade internationally?
For variety (e.g. pineapples) To specialise (focus on what we do best) To grow (expansion into other markets) To reduce costs (EOS) To avoid conflict (co-operation//conflict)
What are the 2 types of financial support available to businesses trading internationally?
Insurance and Export Insurance
Insurance
An agreement by which a company undertakes to provide a guarantee of compensation for specified loss, damage, illness or death in return for a specified payment.
Export Insurance
Insurance paid by the UK government to UK exporters to protect against the risk of non-payment by overseas buyers.
Free Trade
Trade without barriers (tariffs and quotas)
What are the advantages of free trade?
+ Lower price for consumer
+ Business - output increases (EOS)
+ Business - access to greater variety of raw materials at lower cost
What are the disadvantages of free trade?
- Environment: more pollution
- Workers - job losses
- Domestic businesses: more competition from abroad
Trading Blocs
A group of countries within a particular geographical region that protect themselves from imports from non-members
Give 2 examples of trading blocs
The EU and NAFTA (North American Free Trade Agreement)
What are the disadvantage of operating within a trading bloc to a business?
+ Access to a potential market of millions of people
+ Increases a business’ stability (selling to countries within the bloc)
+ No tariffs
What are the disadvantage of operating within a trading bloc to a business?
- Tariffs are decided by the bloc and countries cannot negotiate a tariff with other countries outside of the bloc
- Scale of competition within the bloc may be too great for domestic businesses
- Have to abide by regulations
Emerging Market
A country that is achieving rapid growth as well as industrialisation
What does BRICS stand for?
Brazil Russia India China South Africa
What are the opportunities for emerging markets?
+ Can take advantage of a lack of legal constraints
+ Move production here, cheaper labour
+ Can move production closer to the market being served
+ Access to markets with potentially high disposable incomes
What are the threats for emerging markets?
- Reduces the need for jobs in the domestic market
- Lower wages - lower product price (risk to UK businesses)
- Emerging markets become self-sufficient - demand falls
The Digital Revolution
The movement from analogue and mechanical technical technology to digital technology
Examples of digital technology that I know of?
Specsaver’s frame styler tool
Zara’s self service checkouts
Ways to use digital technology?
- Digital storage methods
- Communication
- Internet
Information Age
A time when large amounts of information are widely available
What are the opportunities linked to the digital revolution?
+ Feedback from customers can be accessed more easily, more info collected = more reliable info
+ Banks - online banking
+ Market research
What are the threats linked to the digital revolution?
- Review sites - reputation damage
- Protective systems are required to prevent against fraud
- Customers/employees may be reluctant to adapt
Why are some businesses affected by the digital revolution more than others?
Market Type of product Type of customer Business' budget Response of rivals
