lo6 Flashcards
the factors which comprise the ecternal business enviroment
- social factors
- technological factors
- enviromental factors
- economic factors
- political factors
- legal factors#
- ethical factors
- competitive factors
social factors
factors relating to the population and our lifestyle
- demographic issues - ageing population, gender balance
- attitudes to work - flexible working patterns. home - working
- disposable income - amount of income a person has available to spend
- social trends - anti-smoking, organic food
- cultural beliefs - attitudes to debt - religious food
technological factors
advancing technology has changes the way we work, play, learn and shop
- automation - production lines, robotics
- purchasing / sales technology - e-commerce websites, card readers
- mobile technology - contactless payments
- communication technology - email, text, video conferencing
enviromental factors
factors relating to minimising damage to the planet e.g. energy management, waste reduction
economic factors
interest rates
- the additional payment required to borrow money
- the additional benefit received from saving money
exchange rates
- the value of one currency as compared to another currency
- affects imports and exports
- sterling exchange rates constantly change as they are affected by the supply and demand
inflation
- a general increase in the price of goods and services
- inflation rate is calculated by the government using a basket of goods that we typaclly purchase
political factors
factors relating to the government policy and practices
- political instability - chances of the collapse of a government more common overseas
- a change of government - general election, change in prime minister
- government initiatives - new government policy, grant funding, control measures
what are the eleven legislation factors in legal factors
- companies act
- partnership act
- consumer rights act
- consumer protection act
- equality act
- health and safety at work act
- working time directive
- national minimum wage act
- data protection act
- copyright, designs and patents act
- planning permission act
positgive + negative impacts on a business and its stakeholders of operating ethically
positive impacts
- reduced stakeholder conflict
- better reputation
- increased brand loyalty
negative impacts
- higher costs
- conflict with profit motive
- difficulty in sourcing suppliers
- lower shareholder returns
positive and negative consequences to a business and its stakeholders of not acting ethically
negative impacts
- damadge to reputation
- loss of customers
- loss of sales revenue
positive impacts
- lower costs
- easy sourcing suppliers
- can maximise financial aims
competitive factors
factors relating to the existense of rival businesses
- market share of the business and its competitors - is there a dominant firm in the industry? are competitors small?
- position in the market - is the business the market leader? is the business similar size to competitors? is it much smaller than competitors?
- strength of competition - is the business a price setter or a price follower? is it protected from competition because it operates in a niche market?
- competitor behaviour - do rivals actively compete with each other or do they co-exist?
companies act
- governs all types of companies
- file accounts annually
- limited liability for shareholders
partnership act
- governs business partnership
- profits must be shared between partners
- jointly and serverally liable
consumer rights act
- satisfactory quality, as described, fir for purpose
- services should be provided
- right to refund, repair or replacement
- protection for purchase of digital content
consumer protection act
- must not sells goods that are unsafe
- local councils have the right to seize unsafe goods and ban them from sale
equality act
- bans discrimination in all its forms
health and safety at work act
- employers and employees have a duty to keep the workforce safe for themselves
working time directive
- protects workers from undue stress and illness
national minimum wage act
- requires employees aged 25 and over to be paid the national living wage and those under 25 to be paid the national minimum wage
data protection act
- be obtained and processed lawfully
- be kept only for the purpose registered
- be adequate, relevant and not excessive
- be accurate and kept up to date
- not to be kept longer than necessary
- be kept safe and secure
- not to be sold without explicit consent
- not to be transferred out of Europe
= be disclosed to the data subject on request
copyright, designs and patents act
- protects the interest of the creator of original work
- cannot be used without owners consent
- owner retains all rights for use
planning permission
- businesses must obtain planning consent before making significant changes to land or property
legal implications of failing to meet legal requirements
- law suits
- court costs
- fines
- paying compensation
non-legal implications of failing to meet legal requirements
- bad publicity
- bad reputation
- poor employer-employee relations
- industrial action
ways a business can act ethically
- as an employer - not exploiting the workforce, not using child labour, paying above the minimum wage / living wage
- as a trader - buying fair trade products, charging fair price
- being enviromentally friendly - recycling, reducing waste, minimising energy use
- sustainablility - using non-fossil fuels for transport, planting trees, land management
- corporate social responsibility - giving donations to charity, offering employee health and welfare schemes, supporting cultural events
