Chapter 1 Flashcards
What are the 6 business environments
Political
Economic
Social
Technological
Legal
Environmental
What does the circular economy imply
What we buy/sell must be used over and over again
What is South Africa’s non-profit recycling organisation
The National Recycling Forum
What are stakeholders
The different individuals / groups who are affected by the policies and decisions made by an organisation
What are the two categories of stakeholders
External and internal
What is the difference between shareholders and stakeholders
Shareholders are a type of stakeholder. They own a portion of the company and thus only have a financial interest.
Are some stakeholders more important?
Yes - If a business fails and goes bankrupt, there is a pecking order among the stakeholders to determine who gets repaid for their investment
What is a risk
Any factor or event that can occur in a business that could negatively impact its operations, profitability or sustainability
Give 5 examples of types of risks
Strategic
Operational
Financial
Economic
Political
What is the relationship between risk and return
Higher risks generally lead to higher returns but obviously lead to a higher chance of incurring losses. The key is to find the balance between risk and reward
What are 3 short term risks
Misinformation and disinformation
Extreme weather events
State-based armed conflict
What are 3 long term risks
Extreme weather events
Biodiversity loss and ecosystem collapse
Critical change to Earth systems
What are the 3 most severe risks faced by South Africa
Energy supply shortage
Unemployment or lack of economic opportunity
Water supply shortage
What is the effect of a high cost of living on consumers? (3)
Consumers have reduced purchasing power
Consumers are able to save and invest less
Consumers may face an increase in unemployment
Which industries are most at risk due to increasing cost of living
Retail - Consumers look to retail as their first means to cut back on spending
Hospitality and tourism - As consumers have less expendable income, they are able to travel less and thus this industry struggles
What can be done to address a rising cost of living?
The best means to address a rising cost of living is the effective implementation of policies by the government
