CHAPTER 6-External environment- Social and technological change Flashcards
What are demographic changes?
changes in the structure of the UK population over time in terms of things like age, sex and race
how can demographic changes influence business decision making?
- More working parents will boost the workforce but businesses need to provide more flexible contracts
- Increase in people living alone will lead to a demand for smaller houses and food packaged in smaller amounts
how can a change in consumer lifestyle and buying behavior affect businesses?
- rise in social networks means that it becomes a important tool of promotion
- People are to busy to wait for delivery so want to collect it from a safe place eg. petrol station
What is urbanization?
an increase in the proportion of people living in cities
what opportunities does urbanization offer businesses?
- Demand for services in the area
- demand for infrastructure, housing and communication
how can migration help a business?
can help some businesses overcome labor shortages and allow them to expand into new and current markets
what happens when too many skilled people leave a country or region?
Brain Drain
what is Corporate Social Responsibility?
the idea that a company should go above and beyond what is required of them by law to help society, its workforce and the environment
what might happen if companies don’t act responsibly
- consumers may boycott there products
- there reputation may be affected
what are some of the advantages to CSR?
- Competitive advantage (USP)
- Improves brand loyalty
- attracts new customers through good publicity
- attracts more talented applicants because people prefer to work for a business that has a good CSR record
- higher employee morale so reduced staff turnover
What are the disadvantages of CSR?
- Expensive and shareholders may think it is a misuse of funds
- Costs may be passed on to customers and if there is recession and prices are sensitive then sales will fall
- Small businesses may not have funds to spare for csr projects
- May be hard to monitor adherence to ethical behavior
give an example of bad CSR by a business?
Starbucks tried to avoid paying corporate tax by finding loopholes in the system but public protests have led to them volunteering to pay a meaningful amount of tax
what is carrolls pyramid of CSR
a model showing what society expects from a business
what are the four stages of Carrolls pyramid of CSR
- economic responsibilities
- legal responsibilities
- Ethical responsibilities
- Philanthropic responsibilities
Can a business fulfill the other responsibilities before fulfilling the economic responsibilities?
no
what are the two stages of Carrolls Pyramid of CSR which are voluntary?
Ethical and philanthropic
what does philanthropic mean?
to be a good corporate citizen and contribute to the improvement of lives
what are the internal pressures for social and environmental responsibility
-Business leaders: change will happen if they are concerned about sustainability and how to work in the most efficient way
-Shareholders: Long term view wants it to be socially and ethically responsible but short term view prefer quick profits
Employees: if the business is dependent on people who stay at the business for a long time then CSR needs to be addressed
what are the external pressures on a business?
- Legislation: Businesses want to operate within the law because they have a reputation to protect
- Pressure groups:Greenpeace may put pressure on firms that are not being environmentally caring
what are the benefits of technological change?
- Improved efficiency and reduced waste
- Better products and services
- New products and materials
- Advances in communication
- Improved working environment because machines can do the dangerous jobs
What are the problems with technological change?
- Cost because need to replace old tech with new
- Knowing what to buy and when
- Industrial relations between employers and employees because change can be resisted
what are the issues to consider when introducing new tech into a firm?
- Existing tech: is it compatible with current tech in the business
- Reaction of the workforce
- Potential short term difficulties (possible cutbacks in production while old tech is being replaced)
- Finance (high upfront costs)
what is migration?
the permanent movement of people from one region to another
what is technological change?
adapting new applications of practical or mechanical sciences to industry and commerce
