Business Chapters 7 & 8

Question 1

Define external environment

Answer 1

The external environment consists of all the elements outside the business and can be sorted into two sections, the macro environment and the operating environment.

Question 2

Define operating environment

Answer 2

The operating environment is the environment immediately external to the business which the business has direct contact with and some control over such as customers and suppliers.

Question 3

Define Macro environment

Answer 3

The macro environment consists of factors which the business has no control over but indirectly affect the decisions and performance of a business makes such as societal attitudes and economic conditions.

Question 4

What are licences and permits?

Answer 4

Legal documents which need to be applied for and approved before a business can begin operating. Can vary between states and across local government areas.

Question 5

Taxation arrangement examples

Answer 5

Australian Business Number, Tax File Number, GST registration

Question 6

Define Occupational health and safety laws

Answer 6

Occupational health and safety laws are regulations that dictate laws that businesses must follow to maintain a safe workplace. eg.
- maintain equipment
- provide training
- overall building safety

Question 7

What do trading laws do?

Answer 7

Trading laws ensure businesses are compliant with federal law and establish fair trading for customers and businesses, covering marketplace aspects as well.

Question 8

Define Environmental Legislation

Answer 8

A collective term encompassing aspects of law that focus on protecting the natural environment, health and natural resources. Eg. clean air act covers the emissions of smoke, dust and grit from any building, chimney or plant

Question 9

Define societal attitudes

Answer 9

Factors that have impacted the ways society and the economy operate, for example shifting demographics, increased levels of education, trends and values.

Question 10

Define economic conditions

Answer 10

The state of the economy, how well or poorly it is doing. Includes factors such as interest rates, tax rates, employment levels and consumer confidence.

Question 11

How can interest rates affect a business?

Answer 11

The cost of borrowing for a business. Low interest rates mean businesses are more likely to borrow and high interest rates mean they are less likely to borrow due to low return on investment.

Question 12

How can Employment levels affect a business?

Answer 12

Low employment levels mean it can be easier to find a job but people may not have money to spend as they have no income. Wage increases can attract more workers if businesses are facing staff shortages.

Question 13

How do tax rates affect different businesses?

Answer 13

Taxes are levied by federal and state governments on individuals and businesses. If the business is run by a sole trader then the individual will pay income tax and the tax flat rate is 30%

Question 14

Define consumer confidence

Answer 14

Consumer confidence refers to how consumers or customers are feeling about the future.

Question 15

How do technology advancements affect operating costs?

Answer 15

Software usually allows a business to automate most processes, such as accounting, payroll and record keeping.

Question 16

How do technology advancements affect Communication processes?

Answer 16

assist in marketing, and sending and receiving information about the business and its products and services. It also allows a business to establish a portal to access and update internal documents.

Question 17

How do technology advancements affect customer base?

Answer 17

Technology allows a new business to reach markets beyond their local area or region up to a global scale.

Question 18

How do technology advancements affect Managing sensitive information?

Answer 18

Technology assists a business in developing secure environments for sensitive customer and business information.

Question 19

How do technology advancements affect Increasing employee productivity?

Answer 19

Computer programs and software mean processes are usually completed more accurately and efficiently

Question 20

How is outsourcing affected by technological advancements?

Answer 20

Enables some parts of the business, such as manufacturing products, to be done elsewhere to reduce costs

Question 21

Overseas competitors

Answer 21

Australian import and export businesses need to be able to compete internationally as labour costs are cheaper overseas, some competitors may gain an advantage if they are already in that market.

Question 22

Overseas markets

Answer 22

Overseas markets can assist with expanding markets and customer bases. However businesses have to understand regulations, social and cultural values and business practices in different countries.

Question 23

Offshoring labour

Answer 23

Offshoring labour refers to work that is completed in another country for a business, allowing a business flexibility and reducing costs to become more competitive.

Question 24

Exchange rates

Answer 24

A currency’s value is determined by supply and demand and can impact whether a business is importing or exporting. Global competitors must foresee and develop strategies to manage changes in currency value.

Question 25

Patent

Answer 25

A legally enforceable right an owner applies for to gain commercial rights to any device or process that is new, inventive and useful.

Question 26

Copyright

Answer 26

Copyright protects the original expression of ideas and does not need to be applied for in Australia as it has no official process. Covers works such as books, movies and music.

Question 27

Trademarks

Answer 27

Trademarks protect a business from others using its reputation or products and protects its unique identity. It must be registered and approved internationally if the business wishes to expand and can be granted for a letter, number, word, phrase, sound, shape, logo, picture and/or aspect of marketing.

Question 28

Online sales

Answer 28

Online sales are when people purchase a product via the internet, expanding markets for a business within Australia and internationally. It allows a business to save money by not having a physical store however global market consideration\s and regulations must be considered.

Question 29

Corporate social responsibility

Answer 29

Corporate social responsibility is when organisations consider society by taking responsibility for their actions on stakeholders. A business has a moral obligation to act with honesty and integrity in all human and financial dealings and during planning may involve volunteering, developing sustainable business practices and supporting local causes.

Question 30

Define customer needs

Answer 30

Customer needs are something a customer requires because it is essential or very important rather than just desirable.

Question 31

Define customer expectations

Answer 31

Customer expectations are the value that customers expect to receive from buying a particular good/service.

Question 32

Competitors’ behaviour

Answer 32

A competitor is a business rival in the same market for products or services offered by the business. A business needs to be aware of competitors’ behaviour in order to identify threats and opportunities that are arising.

Question 33

Define supply chain

Answer 33

The supply chain is a system or process in which businesses collaborate to move a product or service from suppliers to manufacturers to consumers.

Question 34

What are some methods to optimise the supply chain?

Answer 34

Entering into long-term contracts with suppliers to tie them into specific prices and quantities, sourcing local resources and products and implementing just-in-time techniques to reduce storage and wastage costs.

Question 35

Environmental and ethical considerations regarding supply chain

Answer 35

Businesses develop codes of conduct and guidelines to manage their supply chain and ensure to customers that they are acting ethically in regards to child labour, fair trade, waste, transport methods and pollution

Question 36

Define special interest group

Answer 36

A group of people or an organisation attempting to influence the actions of a business.

Question 37

Explain what Environmental lobby groups do

Answer 37

Environmental groups promote environmental issues to businesses, aiming to convert the business to using renewable resources, reduce waste and develop substitutes for non-renewable resources.

Question 38

Explain what unions are and aim to do.

Answer 38

Unions are organisations of employees who have joined together to achieve common goals such as higher pay, better working conditions and job security. They provide a range of welfare and social benefits for members. It is good for businesses to consult with a union during planning to ensure that decisions are in line with the union’s expectations.