Influences On Businesses Flashcards
Economic Climate - Economy
Made up of consumers, businesses and governments making decisions on what to buy, sell and produce.
Economic Climate - Unemployment
When someone is willing and able to work, but cannot find a job.
Economic Climate - Inflation
The average rise in prices over time.
Economic Climate - Employment
The % of people aged 16-64 that are in employment.
Economic Climate - Consumer Spending
Value of goods and services bought by consumers.
Economic Climate - Interest Rate
The cost of borrowing money and reward for saving.
If interest rates increase…
People should save more and borrow less
If interest rates decrease…
People should save less and borrow more
When interest rates increase consumer spending is affected as…
They will spend less as they will have less disposable income, so cut back on items that are expensive.
When interest rates are increased business spending is affected as…
They will spend less as they won’t have as many customers. If they have a lot of borrowed money they may not be able to afford to spend as much.
Legislation - Equality Act
A business must not discriminate against people in the workplace on grounds such as race, sexual orientation, age.
Legislation - Trade Descriptions Act
A business must provide accurate information regarding a product.
Legislation - National Living Wage
Adult workers over 25 years of age must earn this as a minimum.
Legislation - Sale And Supply Of Good’s Act
All products must be of satisfactory quality and fit for purpose.
Legislation - Health And Safety At Work Act
A business must protect its workers and members of the public. A Health and Safety Policy must be written, and training on healthy and safety must be given.
Legislation - National Minimum Wage
Adult workers in the UK must be paid at least the minimum wage.
Environment/Ethics - Disposal Of Waste
How a business or consumer gets rid of unwanted materials.
Environment/Ethics - Sustainability
How a business ensures it can continue to operate in the long term without damaging the environment for future generations.
Environment/Ethics - Ethics
The moral standards by which business behaviour is judged.
Environment/Ethics - Environment
The natural world within which we live.
Environment/Ethics - Noise Pollution
Unwanted, excessive or harmful sounds in the environment.
Environment/Ethics - Pressure Group
An organisation that seeks to influence others in relation to a specific issue in order to bring about change.
Interest rates
Impact on business?
- High interest rates - borrow less, increase costs
* High interest rates - consumers save, less likely to spend
Level of employment
Impact on business?
- Impact businesses - easier to recruit
* high employment, lots of spending
Consumer spending
Impact on business?
• Inflation, costs may rise, prices may rise
Ways high unemployment may cause problems for a business?
- May not have enough staff to operate
* People have less disposable income - demand will fall
