Chapter 3: Influences in the business environment Flashcards
Business environment
- The external environment
- The internal environment
What is the external environment
factors a business has little/no control
- government policies
- technology
- economic conditions
- social attitudes
What is the internal environment
factors a business can control
- Products
- Location
- Management
- Resources
- Business culture
What types of economic influences can influence a business?
- boom periods
- economic downturn
What is a boom period
people spend more money
higher employment rate
What is an economic downturn
people spend less
unemployment rate rises
What types of financial factors can influence a business
interest rates
lending policies
exchange rates
How do exchange rates influence businesses
- if $AUD appreciates - imports become cheaper, exports become more expensive (may hurt aus exporters)
- if $AUD decreases - imports become more expensive and exports become cheaper (exporters benefit)
What are the four geographic influences
- location
- population growth
- demographic changes
- weather and climate
How does the law influence businesses?
Businesses need to comply with current laws and make changes to ensure they are complying with changing laws since laws change often.
Political influences
policies, regulations, possible changes to Australia’s labour market laws
Example of institutions that can influence a business in australia
examples:
Australian Tax Office
SafeWork Australia
Technological influences
ability to produce innovative goods and services to make business processes more efficient.
- risk of glitches or breakdowns
What is business culture
They are a set of values expectations and beliefs shared by management and employees.
How can choice of product influence a business
- the type of goods and services produced will affect the internal operations
- size of business will be based on range and types of goods produces, the level of technology and volume of goods produced.
Factors to consider when choosing location
visibility
cost
proximity to suppliers
proximity to customers
proximity to support services
What are the four main types of resources that can influence a business?
human resources
information resources
physical resources
financial resources
Human resources
the employees
what are information resources
Information resources are the knowledge and data required such as market research and legal advice
What are the physical resources that can influence a business
equipment
buildings
raw materials
What are the four main resources that influence a business
human
information
physical
financial
What are the four essential elements of a business culture
values
symbols
rituals
heros
Who are stakeholders
A stakeholder is either an individual, group or organisation that’s impacted by the outcome of a project or a business venture.
society/ general public
employees
shareholders
customers
environment
competitors
Who are shareholders?
Shareholders purchase a share in a company and therefore are partial owners. If the business is successful shareholders receive a portion of the profits called dividends. They also make capital gain if the value of the organisation’s share appreciates.
