Chapter 3 - Influences in the business environment Flashcards
What are the two categories the business environment is divided into?
The business environment is divided into two categories - External and internal
What is the external environment?
The external environment includes those factors over which the business has very little control.
What is the internal environment?
The internal environment includes those factors over which the business has some degree of control.
What are the 10 external influences on the business environment?
The 10 external influences on the business environment are: Economic, financial, geographic, social, legal, political, institutional, technological, competitive situation, and markets.
What are economic influences (external)?
Economic influences refer to the many factors that relate to economic activity in a country, region or the world and include interest rates, wages, unemployment, exchange rates and inflation.
What is the economic cycle (business cycle)?
The economic cycle refers to the period of growth and recession that occur as a result of fluctuations in the general level of economic activity.
What are the 4 main economic conditions is the economic cycle?
Peak, Trough, Expansion, Contraction.
What are financial influences?
Financial influences refer to the impact of financial markets on business.
What is deregulation?
Deregulation is the removal or government regulation from industry, with the aim of increasing efficiency and improving competition.
What are the participants in the financial markets?
The participants in the financial markets include financial institutions (e.g. banks), non-financial institutions, and insurance companies.
What are geographic influences?
Geographic influences refer to the effects climate, natural resources, topography, physical infrastructure and location have on a business.
What are the three geographical factors that affect business activity?
Three geographical factors that affect business activity are Australia’s geographic location within the Asia-Pacific region, changing demographic factors and globalisation.
What is globalisation?
Globalisation is the process that sees people, goods, money and ideas moving around the world faster and more cheaply than before.
What are social influences?
Social influences are the ideas, values and beliefs held by people in a particular society, that have an affect on businesses.
What are the three social issues that have had a significant impact on business practices?
These include the growing awareness on the environment, the growing desire for businesses to provide family-friendly workplaces and the growing belief that businesses must cater for workplace diversity.
What are legal influences?
Legal influences are the regulations within which a business must operate. It is a legal requirement for business to comply with the law.
What are political influences?
Political influences are the state and federal government policies, and include free trade policies and the process of deregulation.
What are the three main institutional influences on business?
These include government, regulatory bodies and other groups such as trade unions and employer associations.
What are the three different levels of government in Australia?
Federal, state and local.
What is a regulatory body?
A regulatory body is one that is set up to monitor and review the actions of businesses and consumers in relation to certain issues and the appropriate legislation.
What are technological influences?
Technological influences relate to the growing of tools, techniques, or systems by businesses to solve problems or to serve a purpose in operations. They may increase productivity and communication in business.
What do we mean by the competitive situation influences on business?
This refers to each business aiming to be the ‘market leader’, which can benefit the business.
What are the 5 Internal influences on business?
The 5 internal influences on business are products, location, management, resources, and business culture.
What are the main product influences?
The main product influences are the type of goods and services, the type of business, and the size of the business.
What are the four location factors?
The 4 location factors are visibility, cost, proximity to customers, and proximity to suppliers.
What are the four main resources available to a business?
Human resources, information resources, physical resources, and financial resources.
What are management influences?
Management influences refer to the way a business is managed.
What is business culture?
Business culture is the values, ideas, expectations and beliefs shared by members of the organisation.
What are stakeholders?
Stakeholders are the people and groups that has an interest in, or is affected by the activities of a business. In short, they are anyone who interacts with the business in any way.
What are the main stakeholders of a business?
The main stakeholders of a business are Owners/shareholders, managers, employees, customers, society/general public, and the environment.
