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Business Studies GCSE Unit 6 Focus > Continuation of Chapter 25 > Flashcards

Continuation of Chapter 25 Flashcards

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1
Q

KEYWORD: Externality

A

The effect of business activities on unrelated parties.

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2
Q

What are negative externalities?

A
  • Make up the social cost of a project
  • E.g. the setting up of a new hospital in a residential area will cause traffic congestion and increase noised level for the residents
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3
Q

What are positive externalities?

A
  • Contribute to the social benefits of a project
  • E.g. the construction of a new hospital in a residential area will create more jobs
  • Local community will have easier access to health care
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4
Q

What makes a business sustainable?

A

A business is said to be sustainable if it contributes towards the economic growth of the country and makes profits while obeying the law and being ethical and environmentally friendly.

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5
Q

What steps can a business take to be sustainable?

A
  • Use renewable sources of energy
  • Avoid unnecessary travel by promoting a work from home policy (telecommuting)
  • Avoid or reduce the use of chemicals that produce toxic waste
  • Use packaging that can be recycle or reused
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6
Q

What are the ENVIRONMENTAL indicators of sustainable development?

A
  • Conservation of natural resources
  • Conservation of forest and habitats for endangered animals and plants
  • Use of renewable sources of energy for business activity such as solar and wind power
  • Recycling
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7
Q

What are the SOCIAL indicators of sustainable development?

A
  • High life expectancy by generating less pollution
  • Gender equality by having relevant human resource policies in place
  • Ethical business decisions by conducting a social cost-benefit analysis of a project (the social benefits must outweigh the social costs)
  • Fair compensation to employees
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8
Q

What are the ECONOMIC indicators of sustainable development?

A
  • Lower unemployment by providing work to people
  • High literacy rates by setting up training and knowledge-sharing programmes for employees
  • Growing GDP by generating products and services
  • Paying employees fairly and improving working conditions
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9
Q

What 5 methods do pressure groups use?

A
  • Demonstrations
  • Boycotting
  • Petitioning
  • Lobbying
  • Increasing awareness of the issue through the internet
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10
Q

What is boycotting?

A

Refusing to buy a business’s products or services and trying to influence other consumers to do the same.

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11
Q

What is petitioning?

A

Making an oral or written official complaint to the government or concerned authority on an issue.

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12
Q

What is lobbying?

A

Attempting to influence the policy-making of the government.

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13
Q

How do businesses respond to environmental pressures?

A
  • Use green manufacturing methods, which produce less waste and pollution
  • Reducing their use of energy
  • Obeying government regulations and standards
  • Following sustainable business practices
  • Taking legal action against pressure groups
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14
Q

Why do businesses respond to environmental pressure?

A
  • It’s reputation may be damaged
  • May lose customers, employees and investors
  • May be closed down if government regulations to use greener methods of production aren’t followed
  • Legal problems
  • Negative publicity, prevention of growth
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15
Q

What are the benefits present by environmental pressures? (Card 1)

A
  • Recycling and using energy-efficient machines may lead to cost savings
  • Governments may provide financial incentives to encourage firms to use environmentally friendly methods of production
  • Publicity gained from greener methods can attract new customers, employees and investors and keep existing ones
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16
Q

What are the benefits present by environmental pressures? (Card 2)

A
  • Telecommuting (working from home) is a great motivator for employees
  • Competitive advantage if a business follows government regulations + standards
17
Q

What legal controls do governments use concerning the environment?

A
  • Governments may impose fines
  • Closure of facilities
  • Imprisonment
  • All of the above on businesses that ignore pollution targets or waste disposal regulations
  • Charge a levy (impose (a tax, fee, or fine) or tax on the commercial use of energy
  • Businesses may not be permitted to set up in some areas
18
Q

What are examples of government incentives?

A
  • Rewarding the greenest companies with tax credits
  • Encourages businesses to go green as this will help improve their profits
  • Policies allowing tax exemptions for companies using renewable sources of energy and being energy efficient
19
Q

What is tax credit?

A

A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit they have accrued from the total they owe the state.

20
Q

What are unethical business practices in the finance sector?

A
  • Failing to tell customers about extra/add-on costs
  • Insider trading (trading of a company’s stocks by individuals who have knowledge of non-public information)
21
Q

What are unethical business practices in the marketing sector?

A
  • False advertising of products and services
  • Providing products and services that are unsafe for use
  • Non-disclosure of risks associated with products or services
22
Q

What are unethical business practices in the human resources sector?

A
  • Unfair payment to employees e.g. unequal pay for the same work done by different groups of people
  • Use of child labour
  • Discrimination against employees based on gender, ethnic group, religion or age
23
Q

What are unethical business practices in the operations sector?

A
  • Dumping: selling products at very low cost internationally so as to drive out competition
  • Improper waste disposal
  • Exceeding pollution limits set by the government
24
Q

What are the advantages of ethical behaviour?

A
  • Improved image and reputation which helps to attract new investors
  • Helps business grow from these investors
  • Can be a motivating factor for existing staff, which will help to keep them
  • Customers nowadays demand eco-friendly products that have been made fairly
  • Businesses can use this to improve their brand awareness and recognition
25
Q

What are the disadvantages of ethical behaviour?

A
  • High costs may be involved when choosing raw materials ethically (such as recycled materials) as opposed to choosing those with the lowest price
  • Costs may be increased by improving working conditions and pay for employees and not using cheap child labour
  • All leads to lower profits
  • In the long-term, an ethical business will survive but an unethical one will not

Business Studies GCSE Unit 6 Focus (7 decks)

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