Influences On Businesses Flashcards
Ethical considerations in businesses
-treatment of workers
-sourcing of materials
-marketing considerations
-treatment of suppliers
-treatment of customers and marketing decisions
Advantages and disadvantages of behaving ethically
A- sales may be higher because reputation for being ethical will lead to trust from customers, improve motivation of workers as they trust business so increased productivity, investors like it
D- costs may be higher as fair wages and providing safe working conditions, reduced profits as higher costs and lost sales
Environmental considerations you need to learn
Sustainability
waste disposal
pollution
climate change
Advantages and disadvantages of being environmentally friendly
A- sales may be higher because customers prefer to buy from a business that cares about the environment
D- costs may be higher as raw materials produced are more expensive, production methods may be more expensive (growing food more organically is more expensive)
What is globalisation
Process by which business activity around the world has become increasingly interconnected
How businesses are interconnected (globalisation)
Global production, global buying and selling, global movement of capital, global movement of people
Advantages and disadvantages of locating abroad
A- lower production costs because labour, technology is cheaper in some countries, more skilled workers as in UK there is a shortage of labour workers
D- sales may be lost if customers don’t like buying good made abroad, harder to quality control as taking place long way away from head office
Impact of changing prices and the impact on goods in demand
-when in recession, unemployment is high so costs rise
-products customers will buy will change
-they will buy substitute products (swap Heinz beans for supermarket own beans)
-economy have an impact on what customers buy
-businesses need to adapt and supply products that are in demand
Impact of changing levels of consumer income and the impact on goods demanded
-consumer income on the rise so demand for goods go up
-more disposable income to spend on luxury items
Impact of changing levels of employment and impact on goods demanded
-high unemployment so less disposable income therefore sales in the business decrease
-so the business will have to lower prices or change product range so cheaper items available
Impact of changing levels of employment and impact on recruitment
-unemployment decreases so more people applying for jobs
-business will get larger pool of applicants to choose from
-business can offer lower wages as these applying for job have less choice
-business has lower overall costs so higher profit
Impacts of globalisation
-growth of multinational companies
-influences on business location
-international branding
-how businesses compete internationally
