7.6 Social and technological environment

Question 1

The changes in society and technology that can affect a business’ strategic and functional decision making are

Answer 1

• Urbanisation
• Migration
• Consumer lifestyle changes
• Social changes

Question 2

What is urbanisation

Answer 2

• People moving from rural areas to urban areas because of job opportunities

Question 3

What is migration

Answer 3

People moving from on country to another, with the intention of residing and accessing employment
(It has increased demand for cultural food shops and this can reduce for groceries from established retailers)

Question 4

What are consumer lifestyle changes

Answer 4

When buying habits or spending patterns change e.g Morrisons introducing online grocery shopping

Question 5

What are social changes

Answer 5

Include the growth of e-commerce and the changes in buying habits as people begin to expect the availability of e-commerce platforms to complete online transactions

Question 6

What are demographic changes

Answer 6

• Ageing population
• Rising birth rates
• Migration

Question 7

Impact of the ageing population

Answer 7

As healthcare improves and people live longer, demand for products and services can change

Question 8

Impact of the rising birth rates in the UK

Answer 8

Expanding population will increase demand for products and services and businesses must be able to respond to these increases to maintain market share

Question 9

Impact of migration

Answer 9

The movement of people between countries can affect demand for products and services

Question 10

Lifestyle changes that can affect a business

Answer 10

• Emphasis on healthy eating
• Emphasis on wellness

Question 11

Technological changes that can affect a business

Answer 11

• E-commerce
• Social Media

Question 12

Impact on the emphasis on healthy eating

Answer 12

Consumers may demand healthier food options

Question 13

Impact on the emphasis on wellness

Answer 13

Awareness of wellbeing and fitness continues to increase, consumer demand for fitness products is likely to increase

Question 14

Impact on e-commerce

Answer 14

As consumers take advantage of advancements in e-commerce, demand for online shopping will increase and businesses must be responsive to these changes

Question 15

Impact on Social media

Answer 15

As social media use continues to grow, businesses must adapt customer service procedures to reflect changes in consumer expectations

Question 16

CSR (Corporate social responsibility)

Answer 16

An approach whereby businesses seek to exceed basic legal requirements by considering their impact on society

Question 17

CSR focuses

Answer 17

• Satisfying employees
• Satisfying customers
• Satisfying shareholders
• Satisfying suppliers
• Satisfying the community

Question 18

Satisfying employees

Answer 18

Offering job security, safe working conditions and fair wages

Question 19

Satisfying customers

Answer 19

Offering reliable products, fairly priced, which exceed legal safety requirements

Question 20

Satisfying shareholders

Answer 20

Increasing share price and through payment of stable and regular dividends

Question 21

Satisfying suppliers

Answer 21

Paying fair prices, making regular, on-time payments and offering exclusivity

Question 22

Satisfying the community

Answer 22

Offering employment and funding restoration projects and community facilities

Question 23

Disadvantages of CSR

Answer 23

Can increase a business’ costs through paying for initiatives offering employees fair wages and agreeing to pay suppliers fair prices

Question 24

Advantages of CSR

Answer 24

Attracts customers to the business and increase market share and sales revenue in the long-term

Question 25

What is Carroll’s Corporate Social Responsibility Pyramid

Answer 25

A pyramid used by managers and leaders to support the business to fulfil their social responsibilities

Question 26

Bottom to top of Carroll’s CSR pyramid

Answer 26

• Economic
• Legal
• Ethical
• Philanthropic

Question 27

Economic responsibility: Carroll’s CSR Pyramid

Answer 27

Being profitable is the foundation of the hierarchy and allows the business to move through additional responsibilities

Question 28

Legal responsibility: Carroll’s CSR Pyramid

Answer 28

Paying employees the national minimum wage

Question 29

Ethical responsibilities: Carroll’s CSR Pyramid

Answer 29

See a business making moral decisions such as agreeing to pay employees more than the legal requirement in order to support their standard of living

Question 30

Philanthropic responsibility: Carroll’s CSR Pyramid

Answer 30

The business supports society and the community through supporting charitable events and sponsoring public facilities

Question 31

The shareholder concept

Answer 31

Businesses have a responsibility only to raise value for shareholders through increasing share prices and paying dividends and that profit maximisation is the only focus of the business

Question 32

The stakeholder concept

Answer 32

As well as satisfying shareholders’ needs, the business must place equal emphasis on satisfying the needs of all other stakeholders, including employees, customers and suppliers