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GCSE Business Studies > External Environment of Business > Flashcards

External Environment of Business Flashcards

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0
Q

How is land an economic problem?

A

Businesses need a supply of raw materials for manufacturing but there is a limited supply resulting in scarcity.

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1
Q

What are the four factors of production?

A
  • Land
  • Labour
  • Capital
  • Enterprise
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2
Q

How is labour an economic problem?

A

Businesses will need skilled workers to carry out specific tasks but there aren’t enough for every business.

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3
Q

How is capital an economic problem?

A

Businesses need capital to startup but often don’t have the amount of money it needs.

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4
Q

How is enterprise an economic problem?

A

A business needs an entrepreneur in order to make the business successful but such people are scarce.

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5
Q

What is an opportunity cost?

A

The next alternative that would have been chosen.

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6
Q

What is the primary sector?

A

Businesses producing raw materials for other businesses.

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7
Q

Give three examples of businesses in the primary sector.

A
  • Fishing
  • Mining
  • Farming
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8
Q

What is the secondary sector?

A

Businesses that use raw materials to manufacture products.

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9
Q

What is the tertiary sector?

A

Businesses that provide a service to customers.

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10
Q

Give three examples of tertiary sector businesses.

A
  • Retail
  • Banking
  • Insurance
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11
Q

Define interdependence.

A

The way in which businesses from different sectors depend on each other.

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12
Q

Define specialisation.

A

When a business focuses one particular activity.

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13
Q

What is the chain of production?

A

The process of a product from raw materials, manufactured and then sold.

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14
Q

Give one advantage of specialisation.

A

The business can reduce costs, producing cheaper goods.

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15
Q

Define added value.

A

When a business increases the value of a product.

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16
Q

Give three factors that have lead to the decline of the primary sector in Britain.

A
  • Raw materials have been fully depleted.
  • Machinery has replaced workers.
  • Foreign competition.
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17
Q

What is the decline of the secondary sector?

A

De-industrialisation

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18
Q

Give two factors that have lead to the decline of the secondary sector in Britain.

A
  • Cheaper foreign competition.

- The use of machinery in the place of workers.

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19
Q

How has the importance of the tertiary sector changed in Britain?

A

The importance has increased.

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20
Q

Give four factors that have lead to the change of importance for the tertiary sector.

A
  • Jobs are connected to a growing population.
  • The increase in wealth of Britain.
  • The increase in leisure time spent.
  • The increase of customer service.
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21
Q

What are the four main business objectives?

A
  • Profit
  • Growth
  • Survival
  • Providing a service.
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22
Q

How might a business achieve sales growth?

A

Opening more outlets.

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23
Q

Give three different forms of growth.

A
  • Sales growth
  • Increased market share
  • Elimination of competition
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24
Q

What is a business’ market share?

A

The amount of the market that a business controls generally in sales pc.

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25
Q

What is elimination of competition?

A

A business takes over / buys its competitor resulting in instant growth.

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26
Q

When might a business see survival as a vital objective?

A

During a time of recession when people don’t have much income.

27
Q

What is the private sector?

A

A business owned by private individuals.

28
Q

Give two main objectives based on a private sector business.

A

Growth and profit

29
Q

What is the public sector?

A

Businesses controlled by the government such as education.

30
Q

What is the most important objective of a public sector business?

A

Providing a good service.

31
Q

How might the objectives of growth and profit conflict?

A

Growth may lead to lower profits for a short period of time.

32
Q

How might the objectives of growth and service conflict?

A

With growth, a business may lose intimacy with its customers meaning the level of service may fall.

33
Q

How might the objectives of survival and profit conflict?

A

Survival may mean focusing on providing a good service resulting in a reduction of profit.

34
Q

What is a stakeholder?

A

A person or group with an interest in a business.

35
Q

Explain how a worker is a stakeholder.

A

They rely on work for income and security as well as a social benefit.

36
Q

Explain how a manager can be a stakeholder.

A

They need the work for income and have to organise the business to ensure its future. This may result in redundancy of workers.

37
Q

Explain how owners are stakeholders.

A

Owners are paid by the company in dividends meaning they want the business to succeed. This may result in the redundancy of worker and managers.

38
Q

Explain how a customer is a shareholder.

A

The customer wants low prices and good service from the business as well as a choice of products.

39
Q

Explain how a supplier is a stakeholder.

A

The supplier relies on the business to buy their products. Therefore, the supplier may see the growth of a business as beneficial to them.

40
Q

Explain how the local community is a stakeholder.

A

A business can provide jobs for local residents and may bring prosperity to the community contributing to local projects.

41
Q

Explain how the government is a stakeholder.

A

The government wants people in work and paying taxes giving them more money to spend on education and what not.
They also want lower unemployment rates.

42
Q

Give three potential social costs of business.

A
  • Pollution
  • Business closure
  • Business opening
43
Q

What is a social cost?

A

If the effect of the business harm the local environment and community.

44
Q

How is pollution a social cost?

A

If the business is shown to be polluting the environment, measures can be taken to fine or shut down the business.

45
Q

Give two social costs of business.

A
  • Workers lose their jobs reducing spending in their local economy.
  • Visual pollution caused by an abandoned facility making it harder to attract new businesses.
46
Q

How is a business opening a social cost?

A
  • A new business may be built on a greenfield site taking away farmland.
  • Demolition of existing buildings may be required.
  • Large businesses can force the closure of smaller businesses.
47
Q

Give three social benefits of a business.

A
  • Creation of jobs
  • Regeneration of an area
  • Community projects
48
Q

How is the creation of new jobs socially beneficial?

A
  • Workers’ pay will be spent in the local community supporting other businesses.
  • One business can attract other businesses.
49
Q

How is the regeneration of an area socially beneficial?

A
  • Building on a brownfield site makes the area look more attractive.
  • Regeneration often attracts other business.
50
Q

How can community projects be socially beneficial?

A

A new business may offer to improve local facilities.

51
Q

Give four reasons why a business takes notice of green issues.

A
  • Consumers will stop buying their goods.
  • Sales will fall.
  • Profits will be reduced.
  • If the business is seen as environmentally friendly, sales and profits may increase.
52
Q

Give four ways businesses can react to community concerns.

A
  • Use an ethical approach to business.
  • Only buying from other businesses that operate ethically.
  • Making donations to charities.
  • Community involvement.
53
Q

How might a business operate ethically?

A
  • Paying workers fairly.

- Not polluting the environment.

54
Q

Why might a business donate to charity and participate in community projects?

A

In order to gain good publicity to balance bad publicity it gets for damaging the environment.

55
Q

Give three organisations that affect business behaviour.

A
  • Local government
  • National government
  • Pressure groups
56
Q

How can local government affect business operation?

A
  • Granting planning permission that benefits the community.
  • helping businesses find a suitable place to build.
  • Placing regulations on businesses operations.
57
Q

How can national government affect business operations?

A
  • Support for the location of business to assist regeneration.
  • Laws on pollution and chemicals.
  • Measures that reduce the amount of pollution.
58
Q

What is a pressure group?

A

An organised group who try to persuade others to share their views.

60
Q

Give three possible actions that a pressure group might undertake.

A
  • Writing letters.
  • Organising protests.
  • Gaining public support.
61
Q

Give three reasons for the change in importance of the primary sector in Britain.

A
  • Raw materials used up
  • Use of machinery do replace jobs e.g. farming
  • Foreign competition e.g. coal
62
Q

What is a mission statement?

A

Brief summary of main objectives

63
Q

What is satisficing?

A

Making profits to meet needs – not maximizing them

64
Q

What is a dividend?

A

Payment made to shareholders from profits

65
Q

Explain how competitors are stakeholders.

A

They may want to see how others run their businesses so they can improve their own products.

66
Q

Explain how pressure groups are stakeholders.

A

They try to influence business policy in order to support of specific cause.

67
Q

Since you’ve been using these flashcards for free, please consider making a small donation for the hundreds of hours it took to make them.

A

http://bit.ly/21T6H3W

Thank you and good luck!

GCSE Business Studies (14 decks)

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