Internal Factors -UB Flashcards
What are the 3 main internal factors?
• Finance
• Human resources
• Current technology
What might a lack of finance mean the business is unable to?
A lack of finance may mean that a business is unable to:
• pay its bills, e.g. electricity;
• purchase raw materials, which can lead to a halt in production;
• take on more staff;
• grow, e.g. open up a new store;
• carry out marketing activities
Why might finance be needed for a business?
- developing new products
- upgrading new software
- a wage rise for existing employees
- hiring new staff
- an advertising campaign for a product
- extending existing premises
- buying a new fleet of vehicles
- opening a new branch
- buying new machinery and equipment
What does Human Resources cover?
Human resources covers:
- managers
- employees
How can mangers influence a business?
Managers can influence a business through:
- decision-making - Good decision making can increase productivity, increase profits and grow the business. Poor decisions could result in employees losing motivation, production being disrupted and complaints from customers.
- creating policy - Managers create policies that aim to motivate employees and set realistic goals.
- hiring and firing of employees - Managers recruit new staff and let others go.
- setting budgets - Managers will decide how much money a business can spend within a specific period.
- conducting appraisals with staff - Managers need to assess their staff to ensure they are working effectively.
How can employees influence a business?
Employees can influence a business through their:
- productivity
- ability to satisfy customers
- absenteeism
- ability to perform their job
- training
- industrial action
The current technology that a business is using may be out-of-date, which may lead to the following:
• money is spent fixing the technology which could be used elsewhere, e.g. advertising;
• productivity is slower, which can delay customer orders;
• production may have to stop if machinery breaks down;
• staff may get frustrated working with out-of-date software as tasks may take longer.
How can competitors gain an advantage over a business using out-of-date technology?
Competitors using up-to-date technology can gain an advantage over a business using out-of-date
technology as their tasks can be completed much more quickly.
What is current technology?
Current technology is the technology that a business is currently using. This could be the software,
hardware, equipment or machinery they are using.
