Business Studies Chap 2

Question 1

Outline the Challenges in the Micro Environment?

Answer 1

-Difficult employees
-Lack of vision and mission
-Lack of adequate management skills
-Unions
-Strikes and go-slows
-Employee Absenteeism
-High employee turnover
-Shortage of skills among employees

Question 2

Difficult Employees

Answer 2

-Employees that always complain about the work systems and the processes
- Employees that are lazy and not committed to doing their work. This may cause delays and so deadlines will not be met

Question 3

Shortage of skilled employees

Answer 3

-If employees are not well-trained, their performance will not meet the required standards set by the business.
-Businesses may lose customers to other competitors with better services

Question 4

Lack of vision and mission

Answer 4

-Means that management and staff have different ideas about the goals of the business
-It may lead to conflict and negatively affect productivity
-Businesses will not be able to allocate resources efficiently and they may struggle to succeed

Question 5

Lack of Adequate management skills

Answer 5

-Managers who do not have the necessary management skills will not be able to lead, direct, and control personnel and resources in the business
-This will lead to businesses not achieving their goals and objectives
-If the departments are poorly managed, then resources will be wasted and the business’ productivity and profitability will decrease
- A manager with poor management skills may struggle in dealing with subordinates which can lead to an unhappy workforce

Question 6

Unions

Answer 6

-Are organisations that are established to protect the interests and rights of employees in the workplace
-Sometimes unions make demands that are impossible for businesses to meet, and this creates tension between management and employees

Question 7

Strikes and go-slows

Answer 7

-Are examples of industrial actions that may be organized by a trade union and have a negative impact on business operations
-When managers and employees cant sort out their differences, employees may engage in a strike or a go-slow

Question 8

Outline the Challenges of the market environment

Answer 8

-Competition
-Shortage of suppliers
-Changes in consumer behaviour
-Demographics and psychographics
-Socio-cultural factors

Question 9

Competition

Answer 9

-Refers to businesses that produce the same kind of goods or render similar services
-If a business cant match the quality of the goods and services of its competitors, it may lose customers

Question 10

Shortage of supplier

Answer 10

-Every business needs raw materials to produce its goods and services.
-Businesses depend on suppliers for their raw materials/inputs.

Question 11

Changes in consumer behaviour

Answer 11

-Economic conditions or fashions can cause changes in consumer taste and preferences, this could lead to fewer sales
-Businesses, therefore, need to work harder in their marketing efforts or adapt their products or services to meet the requirements of the target market
-Changes in consumers’ needs may lead to stockpiling and reduced profit margins
-Businesses are forced to continuously study these changes so that they can provide goods/services that consumers always need

Question 12

Demographics and Psychographics

Answer 12

-Refers to the statistics of the populatuon such as gender, age, race, level of edu. and level of income
-Refers to customers’ lifestyles and behaviour. It includes their attitudes, interests, opinions, desires and lifestyles

Question 13

Socio-cultural factors

Answer 13

-Include language, customs, income levels, and perferences associated with particular culture
-It affects the product line and the marketing campaign of the business
-Have an impact on the market environment. They shape the way people live, work, produce and consume
-The challenge businesses face is that of clear understanding factors that drive socio-cultural changes to respond appropriately

Question 14

Recommend ways in which businesses can overcome competition in the market

Answer 14

-Must improve on customer service and keep customers happy
-Goods/services must be priced lower than competitor’s goods/services in the market
-Must undertake good marketing campaigns that will draw the attention of the target market
-Must ensure that they have well-trained and dedicated employees that create a better working atmosphere

Question 15

Challenges in the Macro Environment

Answer 15

-Changes in income levels
-Political changes
-Contemporary legal legislation
-Labour restrictions
-Micro Lending
-Globalisation
-Social values
-Socio-economic issues

Question 16

Changes in income levels

Answer 16

-The number of goods/services that consumers can purchase is determined by their net incomes
-Net income is the gross income minus all deductions
-Unemployment, high interest rates, high inflation rates, or an increase in taxes, leave customers with less money to spend on goods/services
-Reduced spending will lower profits for businesses

Question 17

Political changes

Answer 17

-The Gov. decides its objectives and ideologies
-With a change in Gov., Bus. has to adapt to new laws and policies
-A change in Gov. can result in political stability-which can scare away possible investors and tourists and in turn threaten the survival of a bus.
-In some countries, there is a high level of political instability and civil war. That makes it difficult for bus. to operate there efficiently and profitably

Question 18

Contemporary Legal legislation

Answer 18

-The gov. has passed laws to check the activites and operations of businesses
-Bus. that fail to obey these laws could be fined or the owners sent to jail
-Bus. must comply with legislation inplace- which is not always easy to do

Question 19

Labour Restrictions

Answer 19

-The Gov. has passed several laws that impose restrictions on bus. operations
-These laws create a legal framework that protects employees from being exploited by their employers and also restricts the practices of employers

Question 20

Micro Lending

Answer 20

-refers to individuals or businesses that grant small loans to those who can’t get credit from commercial banks
-Normally charge higher interest rates and their repayment period is shorter than those of the commercial banks.

Question 21

Examples of Contemporary legislations

Answer 21

-Labor Relations Act: regulates the relationship between the employer and the employee when resolving conflict in the workplace
-Basic Conditions of Employment Act: provides the minimum acceptable standard for any employment policy. The conditions of employ.
-Skills Development Act: Ensures that employers contribute towards the edu. and training of their employees.
-Consumer Protection Act: Promotes and advances the social and economic welfare of consumers in S.A
-Compensation for Occupation Injuries and diseases Act: Provides compensation for employees who sustain injuries or contract diseases while on duty. It also ensures that employees with a safe and healthy working environment.
-National Credit Act: This Act was established to protect both businesses and consumers from negligent lending practices that could result in over-indebtedness by consumers.
-Employment Equity Act: This Act is there to eliminate unfair discrimination such as discrimination against
race , colour , age gender religion or disability in the
work place
- Board Based Black Economic Empowerment - Esures that previously disadvantaged individuals fully participate in the economy .