current issues

Question 1

benefits of being socially responsible (10)

Answer 1

Increased customers/ sales/profits

Fewer customer complaints

Attraction of more applicants for vacancies

Improved competitiveness

Reduced risk of getting negative publicity

Reduction on negative impact on the environment

Positive impact on employees – increased job satisfaction/motivation

Greater brand recognition

Greater tax relief

Reduction in business expenses

Question 2

disadvantages of CSR to business (4)

Answer 2

Decrease in profits if a company must turn down business opportunities which could be finically lucrative. This can create confit with shareholders who are looking for short term financial return.

Costs to the business could increase e.g. buying raw materials from a country with a bad human rights record might be cheaper than using elsewhere

Involving staff in initiatives can reduce productivity and customer service = loss of sales

CSR can backfire on firms as consumers view it in different ways

Question 3

impact of CSR on stakeholders (7)

Answer 3

donating money to charity, = company gain the support of potential customers who share the same beliefs= increases customer base and sales = lead to satisfied investor as they get more dividends. However, some shareholders may prefer the money to be reinvested in growth so they may sell their shares. = the company loses shareholders which reduce their external finance. In addition, once money is donated there is a loss of control on how the money is spent and if it goes towards the intended purpose of the donating.

CSR helps a company get good publicity and research has suggested that this helps gain more customers which in turn will increase sales and therefore profits. If rival firms are also perceived as being socially responsible it may prevent losing sales to them because of customer loyalty thereby maintaining its profit level. Additionally, firms with CSR may not lose out on profits if some of their actions do not work out as expected as their previous good reputation may be remembered helping maintain profit levels.

Improving working conditions and treatment of staff can help increase job satisfaction. This can help reduce staff turnover.

If a company looks out for the environment e.g plant trees. It can attract staff who share these values this can help the company during their recruitment process as they have a wider pool of candidates to choose from. This can increase talent in the workplace.

CSR can motivate staff since they can become directly involved in projects that they are passionate about leading to all the associated rewards that a motivated workforce brings such as productivity and increase in output quality.

However, it can lead to additional costs in terms of equipment and staff which may make it difficult for the firm to remain competitive and having to sacrifice profit margins to maintain sales.

Cheaper options may have to be turned down in favour for more ethical options which reduce profits.

Question 4

Positive effects of environmental initiatives on an organisation (7)

Answer 4

lower prices passed to customers e.g. less packaging

Can be used in marketing campaigns

Can help develop customer loyalty

Can make consumers feel they are helping less developed countries e.g. fair trade

Makes firms more ready to deal with changing laws = competitive edge

New technologies can allow companies to access a growing market

Firms can access niche markets or create a new one

Question 5

negative effects of environmental initiatives on an organisation (4)

Answer 5

Fair trade products can be more expensive so consumers may buy non-fair-trade items

Some changes may be costly as the firm may have to buy or upgrade machinery and may pass costs down to consumers in the form of higher prices

Environemtal mistakes can affect profit and share price

If not seen to be environmentally friendly, then firms may lose to business competitors

Question 6

benefits of CSR to society and individuals (5)

Answer 6

Reduction in negative impact on the environment or local community such as reduction in co2 emissions, reduced litter/pollution

Positive impact on employees as there is increased motivation/job satisfaction/morale, improvements in mental health, career progression. Helps the working atmosphere

Improvements in sustainability such as ethically sourcing raw materials (replanting 2 trees for every one chopped down to provide wood for making furniture. Thus, a reduced impact on the earth’s finite recourses

Fairtrade and other similar schemes benefit farmers receiving a fair price for their goods thus improved standard of living

Donating to Chairty can have an improved impact on those receiving help – fewer homeless people.

Question 7

how does e-commerce impact marketing (5)

Answer 7

Marketing decisions: pricing, promotion, product range/portfolio, where/how to sell (channels of distribution)

Process e.g. online shopping

People

Conducting market research

Question 8

how does e-commerce impact operations (7)

Answer 8

Inventory management

Methods of production

Ordering from suppliers

Manufacturing

Ensuring quality

delivery options

Research and development

Question 9

how does e-commerce impact HR (8)

Answer 9

Recruitment

Selection

Employee training and development

Appraisal

Motivation

Workforce planning/staffing

industrial relations

Employment legislation

Question 10

how does e-commerce impact finance (6)

Answer 10

Managing cash flow

Sourcing finance/funding

Preparing financial statements

Calculating profitability

Budgeting

Financial analysis

Question 11

answer style question on how e-commerce impacts functional areas (8)

Answer 11

inventory management = automated = fewer staff is required. Impacts HR as reduction in staff recruitment and training. Also impacts finance function as less money will be spent on staff wages, = improved profitability. However, need for training = increase as employees need to adapt to new ways of working

Employees may have to redeploy to other areas to services the increase in e-commerce operations. This leads to more shift work hours to provide 24-hour service which can impact negatively on staff motivation and satisfaction. HR function

As online selling doesn’t involve cash, the management of cash flow may be more accurate and easier, impacting positively on the finance function

Investment in creating and maintaining a website is likely to be costly in terms of time and money, reducing profit levels in the short run

The use of computerised inventory should make the process of inventory management and ordering more accurate leading to improved efficiency in the operations function

Costs of warehousing can be reduced if an online seller order goods from their supplier only when orders are received from a customer. This can improve efficiency in operations in terms of the reduced need for warehousing but also reduced cots, therefore improving cashflow and productivity. However, if the seller is responsible for delivery to the customers there may be more small orders made in opposed to a large delivery to retailers which impacts the reputation of the organisation for not being environmentally friendly

Using e-commerce enables businesses to be open 24/7, improving customer service and convenience, thus impacting positively on sales/marketing function

Onlin sellers can collect data on customers shopping habits which can be used to target future promotions. This can encourage impulsive buying resulting in increased revenue

Question 12

impact of government monetary policy (2)

Answer 12

Reducing interest rates cuts the cost of borrowing therefore encourages business to borrow money as there is a lower risk – this means businesses will have access to cash when sales are low. This money can be invested in hiring staff, boosting production.

Quantitative easing is when the bank of England prints more money and pumps it into the economy this money is available through borrowing for example an overdraft. It’s deigned to reduce interest rates encouraging individuals to borrow meaning they have more money to spend on goods and services which can increase the sales and of business thus profits

Question 13

impact of government fiscal policy (3)

Answer 13

Reducing corporation tax to attract inward investment also increases retained profits after tax which can be reinvested into the business this can accelerate growth.

Reducing VAT can create lower selling price to encourage increased spending. Consumers are left with more disposable income which can be spent on other businesses which will improve the economy as a whole increase customer base as more people will purchase. A small reduction in VAT won’t do much to help a business.

Another way is by reducing income tax as this can motivate more individuals to get a job therefore there will be less people unemployed. more disposable income which increases consumer spending.

Question 14

government influence and help to business (8)

Answer 14

Ensuring a productive/highly educated workforce by funding education

Skills development Scotland supports people and business to develop skills making them internationally competitive

Promoting innovation by funding university research

Ensuring a healthy workforce through the provision of free healthcare – can have a positive impact on staff absences and employees can work of longer

Infrastructure projects have improved transport networks across the country making quicker, easier and cheaper to move produce

Small business bonus scheme reduces taxation for almost 100,000 business premises reducing running costs

Provides advice for business wanting to export

Focuses on attracting FDI helping the economy grow

Question 15

Government financial support (7)

Answer 15

Government loans – maybe at lower interest – to encourage business to invest in growth, employment

Funding employment and training e.g. apprentice opportunities

Invest in business directly e.g. buy shares in companies to safeguard jobs in important industries

Government grants – don’t have to paid back = better cash flow however they are hard to apply for

Tax relief – companies can pay less tax giving them greater funds to invest in projects to help the business survive during a recession

Tax deferral – businesses are given more time to pay tax owed to the government, improving cash flow

Reduction in stamp duty threshold – to encourage the sale of new houses since the amount paid will be lower as less duty needs to be paid

Question 16

government support scheme (4)

Answer 16

Kickstart scheme – pays employers to create new jobs for young people at risk of unemployment. The government pays the wages for the first 6 months. This reduces expenses and reduce unemployment

Job retention scheme – the government pays up to 80% of wages for employees unable to work during lockdown. This helps employers to retain staff until lockdown measures were lifted

Eat out to help scheme – encouraged people to eat out in cafes and restaurants with 50% discount on bills.

Help to buy – first time buyers given financial support to purchase their first home. Reduces the amount of deposit the purchaser needs. The government provides loans for up to 20% of the property value, interest free for 5 years.

Question 17

government legislation and impact on business (7)

Answer 17

Any update in the equality act legislation would mean that company would have to update its recruitment polices (1). This would be time consuming to update (1). The company may also have to provide additional training which may reduce productivity whilst training takes place. (1)

When advertising a position all companies must be careful of the wording used in any job adverts to ensure there is no discrimination (1)

To provide equal opportunities all organisations may have to adapt the workplace to allow employees to access the building and carry out their job (1). This will lead to additional costs for installing ramps, lifts and doors (1)

Organisations must ensure that application forms are available in different formats for example large text, which can be time consuming to change (1).

If using tests – provide extra time for applicants with additional support needs, making interview process longer (1).

Business cannot solely advertise in one area for example female magazine meaning the business has to increase the amount of advertising it does which may lead to additional costs. (1).

NMW - increases costs

Question 18

internet advantages to business (8)

Answer 18

Ordering online allows firms to reduce lead time and storage costs

Allows firms to see what competition is doing

No need to pay staff wages

Attractive websites can be a marketing tool

Can sell 24/7 globally

Employees can work from home - reduced costs

Firms and customers can track orders

Online banking allows firms to manage cash flow mire effectively

Question 19

advantages of using mobile phones (2)

Answer 19

Can contact employees out with the office

Employees can work on the move

Question 20

Advantages of using PC/software (2)

Answer 20

Routine tasks can be carried out easily

EPOS can gather large amounts of information about customers that can be used to target them

Question 21

advantages of using computer aided design (4)

Answer 21

Allows firms to quickly design products accurately and change them quickly and cheaply

Can react to changing needs

Testing can be down cheaply

Cuts lead time from design to production so can keep up with competitors

Reduces need for specialists = cuts costs

Question 22

disadvantages of technology (6)

Answer 22

Easy for competitors to see firms prices/service online

Constant changing technology = increased need for staff training = increased costs

Employee constantly checking emails can waste time and cut efficiency

Viruses can cause systems to crash = customer complaints

easy to hack

Maintenances can be costly

Question 23

Advantages of internet banking (3)

Answer 23

Improves company efficiency while reducing costs

Viewed online = precise indication of finical position at any moment in time

Less branches needed; less staff needed = lowered costs

Question 24

advantages of e-commerce (7)

Answer 24

Smaller business can gain access to global markets with millions of potential customers this allows it to compete with larger companies

• Reduction in costs such as rent and fewer retail outlets are required these funds could be reinvested into the company to improve the products they currently offer or develop new ones.
• Creates a valuable marketing tool – tracking customer purchases, targeting promotion customers are encouraged to make an account allowing the businesses to track purchases and consumer trends.
• Access to suppliers worldwide which can reduce costs by finding cheaper suppliers overall reducing the cost of production
• The company can stock a wider range of products allowing greater choice for consumers leading to greater levels of customer satisfaction in addition the company can gain a competitive edge
• Customers can shop on the go through mobile technology goods are delivered to homes which can be returned if they are not satisfied allowing for customers to take risks and purchase more products. Orders can also be delivered into stores which encourages customers to purchase more products when collecting their order.
• Most e commerce allows ratings on products and customer feedbacks. If ratings are positive, it can encourage consumers to purchase products.

Question 25

Disadvantages of using e-commerce (8)

Answer 25

Greater worldwide competition means that company’s need to improve efficiency or lower prices to remain competition thus the company may have to lower prices which can overall reduce profits made.

• Additional costs through creating and maintaining an effective website means that staff needs to be employed to carry out these jobs resulting in more wages having to be paid.
• There also needs to be security to ensure secure online shopping, storage of customers data in accordance with the legislation if security is not good legal action may have to take which can then take their customers else were.
• Ensuring cost effective and speedy delivery to customers may mean a company has to switch courier companies.
• Dealing with higher number of returns may result in having to in staff a return team.
• Retailers without an online presence must find other incentives to remain competitive such as providing a higher level of customer service, free shipping or annual subscriptions.
• Reliance on courier companies/external distributers must ensure that the service meets customers’ expectations as customers with bad experience with a courier have to go back to the company and complain.
• Negative comments and rating on social media can create a negative image which can impact the company negatively as customers may be put off purchasing form the company.