External influences on business activity

Question 1

Constraint

Answer 1

Something that limits or controls a businesses actions of decisions

Question 2

External constraints

Answer 2

Constraints which a business has no direct control over

Question 3

Social responsibility

Answer 3

When a business makes decisions that may benefit stakeholders other than stakeholders

Question 4

Pressure groups

Answer 4

Formed by people who share a common interest to try and take action for a change in government policy or business decisions

Question 5

External costs

Answer 5

Costs paid by the rest of society as a result of a business decision

Question 6

External benefits

Answer 6

The gains to the rest of the society resulting from a business decision

Question 7

Private costs

Answer 7

The costs of a business decision paid by the business

Question 8

Private benefits

Answer 8

Financial gains made by a business as a result of a business decision

Question 9

New products +-

Answer 9

+ Encourage customers to buy more often
- Expensive to research and develop new products

+ If a business is the first with a new idea, it will have a competitive advantage over competitors
- Businesses that don’t develop new products tend to lose sales and market share

+ New high-tech production leads to higher efficiency, lowering costs
- New technological production methods are expensive