External influences Flashcards
What is administration?
- spreadsheets
- databases
- word processing packages
- financial accounting packages
What is communication?
- video conferencing
- computer networks
- advertising and promotion
- website design packages
What is recruitment?
- online application
- online tests
- advertise jobs
What is stock control?
- JIT manufacturing
- prediction of sales
- managing suppliers
What is CAD?
the use of computer software to design new products in 3D
What is CAM?
involves using computers to control machines to undertake the production of goods
What are the advantages of CAD?
- ideas can be quickly drawn and developed
- designs can be viewed from all angles
- testing and feedback can be done before the product is produced
- easier to design and test ideas
What are the disadvantages of CAD?
- needs a skilled workforce
- difficult the keep up with changing technology
- expensive
- computers can fail
what are the advantages of CAM?
- good for mass production
- machines can run constantly
- fast and accurate production
- less wastage
what are the disadvantages of CAM?
- computers and machines can fail
- downtime required for maintenance
- needs skilled engineers
- expensive
how does technology impact marketing?
advantage:
- social media
- e commerce and m commerce
disadvatage:
- security breaches
- bad reviews
- publicity
how does technology impact finance?
advantage:
- use of spreedsheets is quicker
disadvantage:
- can cause errors
- need to train staff
how does technology impact human resources?
advantage:
- quicker recruitment process
disadvantage:
- more data selection so less employee privacy
how does technology impact operations?
advantages:
- helps predict sales
- quicker production rate
disadvantage:
- people lose jobs due to machines replacing them
how can tech impact shareholders?
adv: competitive advantage so they can charge a premium price
dis: expensive
how does tech impact customers?
adv: more choice of product
dis: closure of high street shops
how does tech impact employees?
adv: less physical work
dis: loss of jobs
advantages of e commerce
-Attract customers across the globe, increasing the target market
- Sell 24 hours 7 days a week
- Receive payments immediately
- Reduced overhead costs compared to running a physical shop
- Products and services can be delivered in a range of locations
- Able to sell a huge range of products, due to not being limited by shop size
disadvantages of e commerce
- More competitors from across the globe, making it harder for the business to get noticed
- Employees may need new skills, eg website maintenance
- Procedures required for how products and services will be delivered and processing returns
- A need to maintain and update technologies, including security software, which may be expensive
- Customers cannot see or try on items before ordering
- Customers must wait for products to be delivered
Advantages of new technology include:
- easier, faster and more effective communication
- better, more efficient manufacturing techniques
- less wastage
- more efficient stock management and ordering systems
- the ability to develop new, innovative approaches
- more effective marketing and promotion
- new sales avenues
disadvantages of new technology:
- increased dependancy on machines
- very expensive especially for small businesses
- risk of jobs being cut
- closure of high street shops
- security risks
- regular updates are required
- can cause all operations to stop if machines break
what are ethics?
having moral and principles and ‘doing the right thing’ usually not taking in account profits
how can a business treat workers ethically?
-paying a fair wage
- providing good working conditions
- allowing flexible working
how can businesses treat suppliers ethically?
- paying fair prices
- having reasonable expectations
- paying bills on time
how can businesses treat customers ethically?
- offering good customer service
- good quality products
- making the customer feel valued and appreciated
- thinking about the customers needs
- giving clear and accurate service and product information
why should a business be ethical?
- better brand reputation
- good publicity
- increase sales
- motivated workforce
- investors are more likely to invest
what is climate change?
long term changes to weather patterns
what is pollution?
the contamination of air or water with harmful chemicals also it can be noise pollution
what is sustainable?
meeting the needs of today whilst taking into consideration the impact of our actions on the future generations with a business this means that business activity does not use up or destroy natural resources
what is waste reduction?
businesses reduce the amount of waste they produce which means they reduce costs and there is less waste to dispose of
advantages of being environmentally friendly:
- the government is more willing to invest in eco-friendly businesses
- lower costs
- increase sales as customers who are more concerned about the environment will be more likely to purchase from eco businesses
disadvantages of being environmentally friendly
- increased costs as it is more expensive to produce ethically better goods
- time consuming
- potential for inaccurate claims which can damage the reputation
how do pressure groups try to influence businesses to be more ethical?
- lobbying
-organizing boycotts
-viral marketing
what can pressure groups influence?
- change the product
- changing pricing strategies
- changing distribution methods
- changing the way a product is advertised
In what ways does the economic climate affect a business?
- unemployment
- changing levels of consumer income
- interest rates
- tax rates
what is unemployment?
refers to people wh are actively seeking employment but are unable to find work
what impact does unemployment have?
the economy will not grow as quickly and it may slow down which will mean that consumers will not have much disposable income to spend and therefore businesses will decrease in sales
why might someone be unemployed?
- redundancy
- being fired
- leaving education
- financially stable
what is the impact of changing levels of consumer income?
the amount of income will influence how much a consumer spends
If consumer incomes increase, general spending is also likely to increase. An increase in spending will help businesses expand, lower unemployment and improve the economy
if consumer incomes fall, spending is likely to decrease. This means that businesses will not perform as well, unemployment will rise and the economy will be less stable.
how does an increase in interest rates affect savers?
they will recieve more interest on their savings which will encourage them to spend less so that they can save more
how does an increase in interest rates affect borrowers?
they will have to pay more back for money that is borrowed which will discourage them from borrowing
how does a decrease in increase rates impact savers?
they will recieve less interest on savings which could discourage them from saving so they may spend money instead
how do a decrease in interest rates affect borrowers?
they will have to pay back less interest for money that’s borrowed which will encourage them to borrow more
what is a tax?
a financial charge made by a government on individuals, consumers, and businesses
how does unemployment impact shareholders?
Shareholders and owners may receive higher dividends if the business employs less people, and recruitment costs and wages may be lower, however they could also be negatively impacted by the possibility of fewer customers, with less disposable income.
how does unemployment affect employees?
Employees may fear for their role if unemployment is high, they would also have less bargaining power for wages and workers’ rights. If unemployment is low, employees will be more secure in their role and likely to have higher wages
how do suppliers get impacted by unemployment?
Suppliers will receive more orders when unemployment is low, as more customers will have disposable income to purchase products. When unemployment is high, suppliers will receive fewer orders and may have to reduce prices.
how does the government get impacted by unemployment?
The government will have to pay more state benefits when unemployment is high, and have to provide more schemes to lower unemployment. When unemployment is low, the government receives more money through taxes and will provide less state benefits.
how do changing levels of income impact shareholders?
If incomes rise shareholders and owners may receive a larger dividend, but may also have to increase the wages of employees. If general consumer incomes fall, this could decrease the amount of money a business makes
how do changing income levels affect employees and customers?
Employees and customers may benefit from additional income, which could provide them with more money to spend on luxury goods and services.
how do changing levels of income impact suppliers?
Suppliers may benefit from additional orders due to higher incomes, or a drop in orders if income levels drop. They may also have to increase wages for their employees.
how will the government be impacted by changing levels of income?
The government will receive more in taxes if incomes rise, and less in taxes if incomes fall.
how will changes in interest rates affect shareholders and owners?
Shareholders and owners may decide to store more money in the bank rather than investing in the business if interest rates rise. If interest rates fall, they may be more inclined to invest money in the business.
how will a change in interest rates affect customers?
Customers may be less likely to spend if interest rates increase, as they would benefit from having money in a savings account and will be less likely to take out a loan
customers may be more likely to spend or take out a loan, and less likely to save money in the bank - this would also increase tax revenue for the government.
how do taxes affect shareholders and owners?
Shareholders and owners will receive higher dividends and profits if taxes are low. If taxes increase the opposite may happen.
how do taxes affect employees?
Employees will have a higher level of take-home pay if tax rates are low. If taxes increase, employees will have a drop in take-home pay.
how do taxes affect the government?
The government will receive more money if taxes increase. If taxes decrease they will be likely to receive less revenue through taxes.
how do customers get impacted by taxes?
Customers may have more to spend on goods and services if taxes decrease. If taxes increase then customers may spend less due to having less disposable income.
What is income tax?
Income tax is charged on
income it is paid as a percentage of earnings. There are different rates of income tax depending on how much money a person earns, a ‘basic’ rate, a ‘higher’ rate and an ‘additional rate. Owners of sole traders and partnerships pay income tax on the profits of their business.
what is corporation tax?
Corporation tax is a charge on a company’s profits
This type of tax only applies to private and public limited companies.
what is national insurance?
National Insurance contributions (NICs) are charges to cover healthcare, state pensions and employment-related benefits such as Jobseeker’s Allowance. Both employers and employees pay it.
what is VAT?
Value-added tax (VAT) is a charge on sales of goods and services based on the value of the item sold. It is collected by businesses, which then pass it on to the government. VAT is charged on most goods and services sold in the UK.
what is globalisation?
businesses that operate internationally or on a global scale
what are imports?
goods or services that enter the country
what are exports?
goods or services that leave the country
what is international trade?
the buying and selling of goods or services between different countries
why are goods imported?
-climate
- capacity of businesses
- availability of raw materials
- cheaper
what is spiced?
Strong
Pound makes
Imports
Cheaper but
Exports
Dearer
what is wpidec?
Weak
Pound
Imports
Dearer but
Exports
Cheaper
advantages of international trade
- growth
- spreading risk
- increasing sales and profits
- new and more technology
disadvantages of international trade
- language barriers
- culture clash
- supply chain issues
- currency issues
- local taxes
- local laws
opportunities offered to businesses by operating globally
- lower costs
- larger target audience
- quicker expansion
- invests into the UK economy
threats to businesses operating in a global market
- increased competition
- risk of takeovers
- increased risk of exploitation
what is a multinational company?
companies that operate in a number of countries around the world
why might a business become a MNC?
- increased market share
- cheaper production costs
- economies of scale
- avoided barriers to trade
- government grants
how do MNC’s in the UK bring advantages?
- more jobs
- new technology
- contribute to the overall economy
- increased consumer choice
what are the disadvantages of MNC’s in the UK?
- environmental damage
- exploitation of labour
- deskilled jobs
- profits don’t stay in UK
what is the EU?
a group of countries from Europe that have an agreement in place for political and economic purpose
what are the characteristics of the single market?
- free movement of goods, services, capital and labour
- trade is free, no tariffs
- cheaper
- general laws e.g consumer protection
- no barriers
- tariffs on trading outside the EU
how do shareholders get affected by EU regulations?
- increased profits due to having a larger target market, being able to sell more products and having cheaper raw materials
- able to distribute employees
- have to ensure laws are being enforced
how are customers affected by EU regulations?
- more choice
- cheaper prices
- fair treatment
how are employees affected by EU regulations?
- better job security
- freedom to move between countries
- fair treatment
how are suppliers affected by EU regulations?
- more potential customers
- may have to compete more on price
how is the government affected by EU regulations?
- more spending and foreign investment
- receive more taxes
what is legislation?
a set of laws put in place by the government to protect businesses, employees and consumers
what is an employment law?
involves keeping the employees safe and ensuring that employers are fair
what is consumer law?
involves protecting consumers and anyone purchasing goods or services
what is intellectual property law?
involves protecting ideas, creations, designs, names and logos
what does employment legislation include?
- recruitment
- pay
- discrimination
- working conditions
what does an employment contract include?
- payment
- holidays
- duties
- responsibilities
- notice period
why is pay included?
minimum wage and national living wage
why is discrimination included?
prevents any discrimination towards someone based on their race, ethnicity, disability, religion, belief, sexual orientation, sex, gender etc
what is unfair dismal?
when an employee of a business has their employment terminated without a valid reason or against government law
what is consumer law?
any piece of government legislation that protects consumers from poor quality products or unfair treatment
what is copyright?
gives the creators of media the rights to control how the media is used and distributed
what is a patent?
used to protect ownership of an invention or new process
what is a trademark?
the protection of a logo, phrase or business name that a company can register with the government to make their company distinctive
what impact does legislation have on costs and profit?
- supply training and safety equipment
- test products
- pay staff higher wages
what advantages does legislation have on marketing and sales?
- ensures a strong brand image
- less risk of impersonation
- less returns
- less chance of being sued
- higher sales
what disadvantages does legislation bring to marketing and sales?
- the branding and IP must be original
- any issues can bring negative impacts
- expensive
what benefits does legislation have on production?
- high-quality products
- customers have more confidence
- employees have higher productivity if they have good working conditions
what drawbacks are there with legislation on production?
- all products and services must be produced to high levels
- high quality materials are expensive
advantages of human resources due to legislation
- lower staff turnover reducing recruitment costs
- happier employees so higher productivity
- low level of complaints
disadvantages to human resources due to legislation
- expensive
- mistakes can lead to legal action
- flexibility requird
