Influences in the business environment: external influences Flashcards
What are influences in the business environment?
The business environment refers to the surrounding conditions in which the business operates, and can be divided into two broad categories; internal and external.
what are the external influences in the business environment?
Sometimes Elephants Play Golf Like Men To Impress Female Cows Social, Economic, Political, Geographic, Legal, Markets, Technological, Institutional, Financial, Competitive situation.
What are economic influences?
Economic influences- are a significant part of the external environment
A slowdown in consumer spending directly affects sales
A fall in the value of the Australian dollar on foreign exchange markets makes it more expensive to import
Managers of large Australian organisations work in an environment that is more open to global economic influences than ever before
What are financial influences?
Financial influences- allows access to finance and markets.
Deregulation of Australia’s financial system began in 1983. Previous systems of government control of credit, interest rates and exchange rates were reduced. Process of financial deregulation has ended up in the opening of the financial industry to greater competition.
What are geographical influences?
Geographic influences- have 2 major factors that impact business activity, Australia’s geographic location within the Asia-pacific and the economic growth in a number of asian nations, especially China. Providing business expansion, sales and profit.
Globalisation; members of the global community are linked through the mechanism of international trade.
This process has been strengthened by globalisation and has assisted the technological revolution in communication
Other aspects of geographic influences
* shift from rural to urban
*shift from inland to coastal
What are social influences?
Social influences- is rapid identification and change due to taste, fashion and culture, leading to profit opportunities. Failure to respond can threaten stability.
Other social issues; environmental practises, family friendly practises/ work life balance, cultural diversity.
What are legal influences
Legal Influences- Fair work act…….
What are political influences?
Political Influences- major political change as a result of elections can lead to business confidence and uncertainty. Major areas of influence include; Tax reform Taxation Employment legislation Environmental management social reform
What are institutional influences?
There are three main institutional influences on business, including government, regulatory bodies and other groups such as trade unions and employer associations.
EPA- Environmental Protection Association- enforces NSW gov laws about environment
ATO - Australian Taxation Office - enforces federal taxation policies
ASIC - Australian Securities and Investment Commission - regulates financial conduct
ACCC- Australian Competition and Consumer Commission - enforces consumer act
NSW Fair Trading - enforces product safety and business names and license
Trade Unions - protects and promotes the interest of employees
Employer Association - promote interests of employers
ASX - Australian Securities Exchange - share trading
What are consumer markets?
Consumer markets
Growth in the amount and value of world trade
Increased globalisation due to increased technology and increased communication
Access to larger markets
Achieve economies of scale
What are labour markets?
Labour markets
Decentralised labour market ( decline in union membership )
Skills shortages - encouraging skilled migration
What are financial markets?
Financial markets
Deregulation allowing for more free flow of capital ($) for investment
More globalised
Forgien currency trading
What is the external environment?
The external environment includes those factors over which the business has little control, such as government policy, technology, economic conditions and social attitudes.
