7.6a The Social Environment: Ethics Flashcards
What does the social environment consider?
The relationship between the business and the people and areas around where it operates
The social environment is split into what two key areas?
- Demographic issues
- Corporate Social Responsibility
What does demographics involve?
Looking at the characteristics of the population
What two key stakeholder groups do demographic issues effect?
- Employees
- Customers
What are the three key issues that we need to look at under demographic issues?
- Impact of urbanisation and migration
- Changes in lifestyle and buying behaviour
- Growth of online business
Urbanisation definition
The increase in the proportion of people living in towns and cities as opposed to the countryside
Two main causes of urbanisation:
- Natural increase
- Rural to urban migration
What do push factors do?
Drive people away from something - usually due to a lack of resources or facilities
What do pull factors do?
Attract people to an area
Opportunities of urbanisation:
- Wider consumer base
- Leads to development of shopping centres
- External economies of scale
Threats of urbanisation:
- Crime and pollution increase
- Lots of staff will be unskilled or unregistered leading to a weakening of the labour force
What is urbanisation a result of?
Migration
What is migration?
The permanent movement of people from one region to another
Opportunities of migration:
- Increase in total AD via more C, so growth of GDP
- Wider labour force to choose from
- Develop and grow new markets
Threats of migration:
- More demands on social services such as housing = increase G = raise taxes
- Need to develop marketing and branding in different languages
- Skill of labour may be diluted
- Labour shortage
When do changes in society become threats to a business?
If they do not respond to these changes
Changes the UK has recently seen:
- Increase in single-person households
- Increased awareness of environment
- Expectation of 24/7 access to the business
What is E-commerce?
Digitally enabled commercial transactions between organisations and individuals
What does E-commerce cover?
- Online sales
- Online services
Online payment methods
What has E-commerce led to?
- The arrival of pure-plays
- Businesses on the high street having to take an omnichannel approach
Pure-play definition
A business that does business purely through the internet
Omnichannel definition
A multi-channel distribution approach
How do omnichannels help to maximise sales?
By ensuring that the products they sell are available in the right place at the right time in the right quantities
Why has there been a growth of the internet?
- Can order from and to anywhere
- Can order 24/7
- Possibly cheaper for consumer as producer has less costs to cover
Drawbacks of buying online:
- Cannot touch or try on products
- Cannot easily compare
- Cannot get it instantly
Opportunities of E-commerce for businesses:
- Reduced costs
- Easier to judge what is popular
- More immediate impact
Threats of E-commerce for businesses:
- Some customers are wary about putting their details online
- Physical businesses have option to also offer E-commerce
- Older customers might be unwilling to use technology
