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Business > Influences on Business (2) > Flashcards

Influences on Business (2) Flashcards

1
Q

What are the laws about the minimum amount employers must pay their staff?

A

Workers aged 24 and under but of leaving school age have to be paid the National Minimum Wage. Workers 25 and over have to be paid the National Living Wage

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2
Q

What is the difference between the two?

A

The National Living Wage is slightly more than the National Minimum Wage

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3
Q

What can businesses not discriminate against?

6 things

A
  • Religion
  • Gender
  • Race
  • Age
  • Sexual Orientation
  • Disabilities
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4
Q

What does the Equality Act in 2010 say?

A

All employees must be paid the same if they do the same job (or work of equal value) for the same employer

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5
Q

What will happen if a company is found discriminating?

A

They’ll have to pay compensation

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6
Q

What does the Health and Safety Legislation do?

A

It helps to make sure that risks to people at work properly controlled

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7
Q

What does the Health and Safety Act require?

5 requirements

A
  • All employers and their employees to take responsibility
    for health and safety
  • Firms to carry out risks assessments to identify possible
    dangers
  • Keep accident books
  • Trained first aiders
  • Health and safety equipment must be provided
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8
Q

What could a safe working environment mean for a business?

2 benefits

A
  • Fewer accidents and injuries
  • More productive workforce as employees will need less
    time to recover from injuries
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9
Q

What could happen to a business if they don’t follow Health and Safety Laws?

A

They can be prosecuted, fined or even closed down. They may also have to pay compensation to anyone who is injured which could give them bad publicity

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10
Q

What does The Consumer Rights Act 2015 do?

A

It covers how goods and services can be sold and the 3 criteria goods should meet

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11
Q

What are the 3 criteria goods should meet?

A
  1. The product should be fit for its purpose
  2. The product should match its description
  3. The product should be of satisfactory quality
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12
Q

What can happen if products don’t meet the legal requirements?

A

Customers can ask for their money back, a repair or a replacement

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13
Q

How can Consumer Laws affect a business if they’re broken?

4 ways

A
  • Faced with cost and inconvenience of having to refund,
    repair or replace the item
  • They could end up in court which could cost them more
  • Harm the reputation
  • Reduction in sales
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14
Q

How has technology changed the way businesses operate?

A

They often make processes faster because computers can do jobs more quickly or because people can communicate with each other more easily. They can also lead to reduced costs in the long term because fewer man hours are needed

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15
Q

What can be the disadvantages of technology?

A

It can be very expensive, a business may have to buy equipment, train staff or use new computer systems. They may also need to hire staff with the skills to use the new technology

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16
Q

What does E-Commerce mean?

A

E-Commerce is using internet to buy or sell products

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17
Q

How can E-Commerce help firms?

A

It means firms can reach wider markets compared to just having traditional shops

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18
Q

How can firms use social media to communicate with their stakeholder?

A

To advertise their products to customers, to provide customer service or to promote local events to a community

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19
Q

How can firms use websites to communicate with their stakeholder?

A

By posting blogs or providing customer service. They can also be used to publish reports to shareholders

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20
Q

How can firms use emails to communicate with their stakeholders?

A

It’s a quick way of communicating with stakeholders, either on a personal level (to respond to a customer query) or on a bigger scale (to tell all employees information)

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21
Q

How can firms use mobile apps to communicate with their stakeholders?

A

They’re usually used by firms to communicate with customers e.g. giving information about where stores are located, the products the company sells and any special offers

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22
Q

How can firms use live chats to communicate with their stakeholders?

A

Employees can use them to talk to different locations, or customers can use them to speak with a customer services advisor via the internet

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23
Q

How can firms use video calls to communicate with their stakeholders?

A

Employees who work for the same business in different locations may use video calls to hold meetings, rather than travelling to meet up. It can also be a good way for businesses to communicate with important shareholders who may all live in different places

24
Q

Define Ethics

A

Ethics are the moral principle of right and wrong

25
Q

What are the advantages of acting ethically for a firm?

3 advantages

A
  • By advertising its ethical policies, a business might gain
    customers and increase its profits
  • Treating their staff ethically can make employees more
    motivated meaning more productivity
  • Some shareholders may be more likely to invest in a firm
    if it has shown it behaves morally
26
Q

What are the disadvantages of acting ethically for a firm?

4 disadvantages

A
  • It can be costly for a firm. It can give the business a
    higher labour costs than if they didn’t work ethically
  • If a firm is committed to using ethically sourced materials,
    they may find it more difficult to find suppliers and have
    to pay a higher price on materials
  • Increased costs means they won’t make as much profit
    on each item
  • It could put its prices up but that could result in lower
    sales
27
Q

How can businesses reduce their impact on the environment?

4 reductions

A
  • Reduce the amount of packaging they use
  • Recycle things like delivery boxes or unwanted goods
  • Dispose of hazardous waste carefully so it doesn’t
    pollute land or water
  • Buying more efficient machinery that is less polluting
28
Q

What does being sustainable mean?

A

Being sustainable means working in a way that doesn’t damage the Earth for future generations

29
Q

What are two global impacts that are damaging the earth at the moment?

A
  • Resource Depletion

- Global Warming

30
Q

What is Resource Depletion?

A

When a firm uses non-renewable sources like coal and oil meaning if they run out, there’s no way we can replace them

31
Q

What is Global Warming?

A

When carbon dioxide and other chemicals are released into the atmosphere, it causes the Earth’s climate to become warmer resulting in melting icecaps, sea levels rising and more flooding

32
Q

What are the advantages of being environmentally friendly?

2 advantages

A
  • People becoming more aware of environmental issues
    means they’re more likely to buy environmentally friendly
    products
  • It can give firms a competitive advantage- being
    environmentally friendly can attract new customers and
    increase sales
33
Q

What is the disadvantage of being environmentally friendly?

A

Buying new equipment and developing new processes in order to be more sustainable can be expensive which could have a negative effect on their profits

34
Q

How can unemployment affect businesses?

A

Less employment means lots of people have less money to spend. This can lead to lack of demand for products from the unemployed, so sales can fall

35
Q

How can unemployment benefit a business?

A

They may be able to pay lower wages if there are lots of unemployed people desperate for a job and they can fill jobs without any difficulty

36
Q

What can happen if prices rise at a faster rate than income?

A

People will spend a greater proportion of their income on needs e.g rent and food therefore spending less on wants. This means businesses wants will suffer, their sales are likely to go down, leading to lower profits

37
Q

What can happen if prices rise at a slower rate than income?

A

People will be spending a smaller proportion of their income on needs which means they’ll have more money to spend more money on wants which will lead to an increase on sales and profit

38
Q

What is Interest Rate?

A

A value which shows the cost of borrowing money or the reward given for saving money

39
Q

What happens when interest rates are low?

A

When rates are low, firms and consumers borrow more and save less. This means consumers have more money to spend, so demand for goods and services goes up therefore increasing profit and output. Firms will have more money to spend on other parts of the businesses

40
Q

What happens when the interest rates are high?

A

When rates are high, firms and consumers will have less money available to spend. They’re likely to try and save more which means firms could potentially sell less and lose money. It may also mean they can’t afford to pay employees resulting in redundancies and enemployment

41
Q

Define Competitor

A

A business that sells the same products in the same market as another business

42
Q

What can a World Market mean?

A
  • A place where goods are traded between customers and
    suppliers
  • Trade in a particular type of product
  • The potential customers for a product
43
Q

What effects can competitors have on a business?

3 effects

A
  • Nobody is powerful enough to dictate prices. If a firm charges to much then consumers will go elsewhere
  • Firms need to try and convince consumers that their product is better than their rivals. This can be costly for firms
  • Firms will rush to fill any gap in the market so they may spend lots of money developing new products
44
Q

How can some businesses face little or no competition?

3 ways

A
  • If a business creates a brand new product, consumers will have to buy that product will have to buy it from that business until another business makes a similar product
  • Some businesses sell specialist products that not many people want to buy. There won’t be much competition because the market won’t be big enough to survive
  • Some markets are hard to start a business in because the cost of setting up a new business is too high. Not many businesses will be set up to sell to these markets, and there’ll be low competition
45
Q

What is Globalisation?

A

The process by which businesses and countries around the world become more connected. It has resulted in single businesses operating in lots of countries. They can be based anywhere and can buy from and sell to any country

46
Q

What does Globalisation mean for businesses?

A

There’s a much larger market they can trade with people all over the world not just people in their own town or country

47
Q

What disadvantage can Globalisation bring for majority businesses?

A

Having a Global market can bring competition

48
Q

What advantages can Globalisation bring for UK businesses?

3 advantages

A
  • Having a larger market to sell to can lead to increased sales and higher profits
  • Having a larger market to buy from means firms may be able to buy supplies more cheaply which reduces costs
  • It’s easier for UK businesses to set up factories in other countries which can reduce transport costs and may also not have to pay import taxes
49
Q

What disadvantages can Globalisation bring for UK businesses?

A
  • Higher wages in the UK means some UK industries can’t compete with firms from other countries
  • Different currencies can affect profit because of exchange rate
  • Setting up factories abroad to benefit from cheap labour may give bad publicity if seen exploiting or endangering workers in these countries
50
Q

What is exchange rate?

A

A value that tells you how much one unit of a currency costs in a different country e.g. £1= $1.50

51
Q

What are exchange rates affected by?

A

Exchange rates are affected by the economy of the country that uses the currency and by the global economy, this means they change over time

52
Q

What happens for businesses if the value of the pound decreases?

A

British exports become less expensive abroad - resulting in more sales and higher profits for the British firms that export products to other countries therefore making it more expensive for foreign countries to sell their products in the UK. But it would make it more expensive for British firms to import raw materials

53
Q

What happens for businesses if the value of the pound increases?

A

British firms that export products to other countries are likely to see sales and profit to go down because their profits will be more expensive. British firms that import raw materials will be able to make products more cheaply so their profits may go up

54
Q

What are some of the risks in running a business?

3 risks

A
  • Earning enough money to cover costs and make a profit
  • The Health of the economy
  • The actions of competitors
55
Q

What can businesses do to reduce risks?

A
  • Making a business plan

- Carrying out regular market research for any changes

Business (5 decks)

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