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Stakeholders- External Influences Flashcards

1
Q

List all stakeholders of a business.

A

-Managers, Suppliers, Government, Pressure Groups, Employees, Local community, Customers, Employees, media

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2
Q

Define a shareholder

A

A shareholder influence the way in which a business is run because they own a part of the business by holding a share or a number of shares in it.

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3
Q

Define 2 business ownerships that may have shareholders.

A

1) Private Limited Companies- shares in these business can only be bought privately, that is by the people who know the entrepreneur setting up and running the private limited company.
2) Public limited companies- shares in these business can be bought through a stock exchange by members of the public who are not known to the original entrepreneur.

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4
Q

Explain the objectives an employee might have from a business (2)

A

-Employees are key stakeholders in a business because they actually do the business’ work.

Two objectives could be:1) To get the best possible pay and rewards for doing their job.
2) To keep their jobs and ensure that their job is secure.

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5
Q

Why are customers important stakeholders?

A

Customers are an important stakeholder because they buy a business’ products and services and allow sales to increase and allow the business to do well -> If customers stop buying the business’ products, business’ sales will decrease and overtime, this will lower the business’ profit.

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6
Q

What is the main objective of managers?(2)

A

The main objectives of managers are:

  • to make sure the business succeeds so they get paid.
  • ensure jobs are secure.
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7
Q

Why must a business consider their local community when making decisions?

A

A business must consider their local community when making decisions as if business disturbs the local community, people can complain to their local council and if a business wants to expand; they have to seek permission from the local council and the local community.

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8
Q

Define the term pressure group

A

A pressure group is a group of people who join together to try and influence business or the government for a particular cause.

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9
Q

How is a gov affected by the activities of a business because?

A

The government are affected by the activities of a business because they can influence the amount of tax that it pays, the way it treats the employees and its impacts on the environment. They do this through laws and legislations that they pass.

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10
Q

List the four types of technology a business may use

A

1) E-commerce.
2) Social media.
3) digitial communication.
4) Payment systems

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11
Q

Define e-commerce

5 Advantages and 3 disadvantages of e-commerce

A

E-commerce is the process of using internet to carry out the business transactions.

Adv:

  • can trade around the world at any time.
  • can process order immediately.
  • can give real time order updates to the customers.
  • reduced costs on having a retail.
  • easier ordering process from customers.

Disadv:

  • can be exp to keep up with technology.
  • customers may have security concerns & security of account details.
  • can make it harder to build relationships with customers, leading them to make purchase decisions because of price rather than loyalty.
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12
Q

Explain how a business could use social media

A

-Use social media such as facebook, Twitter, YouTube, etc, and allows a business to keep with the trends, read customer reviews and communicate with customers about pos or neg views-> effective way for customers and other stakeholders, such as pressure groups, to influence a business.

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13
Q

Explain the term ‘digital communication’

A

Digital communication includes email or SMS and communication through websites or social media platforms.

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14
Q

Explain how technology is used by customers to pay for goods or services

A

Customers can use payment systems that can be paid in many different ways, eg through websites e-commerce due to them being more efficient , meaning that payments happen quicker and they also cut down the costs of payment processing and paperwork for business

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15
Q

How does technology impact:

  • sales of a business.
  • cost of a business
  • the marketing mix
A
  • on sales: sales can be made on days when physical shops are closed and can be made at any time , from any location so long as there’s internet connection- technology can help a business have high sales as it provides a point of convenience.
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16
Q

How does technology impact:

- the marketing mix( price and product)

A

Price:

  • customers shopping online will have a lot more businesses to choose from so tech helps business lower their prices in order to compete
  • customers- online price comparison- bs will lower prices.
  • reduce costs allowing them to lower price and attract customers whiles still making a profit.

2) Product:
- robots to manufacture products- increases productivity.
- offer new ways to access products or services eg eBooks instead of selling printed books- reduces cost
- customers can customise their product choice- produced quickly using robotics or manufacturing tech

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17
Q

How does technology impact:

-cost of a business

A

-cost of a business:
-avoiding paperwork by using online record tracking,
-enabling real-time purchasing through online transactions.
-use email to communicate- reduce costs of email
-not needed a physical store.
Technology reduces cost and it has become more accessible to everyone/

18
Q

How does technology impact:

- the marketing mix( place and promotion)

A

1) Place:- social media to make customers aware of brands.
- reliable, easy to use e-commerce websites that make purchasing easy for customers.
- customers can be impressed by a good e-commerce website.

2) Promotion:
- cheap digital promotion materials such as email newsletters, promotional codes and online advertising which is less than physical promotion materials such as billboards and adverts in magazines.
- target advertising to customers by using cookies to track what a particular customer has been looking online

19
Q

Define the term legislation

A

-means the laws of a country and this can have a big impact on a business as when making a decision, a business needs to follow the laws of the country which can affect the way they trade.

20
Q

Purpose of legislation? (2)

A

1) Protecting the rights of consumers through customer law.

2) Protecting the rights of employees and employers through employment law.

21
Q

Explain how the consumer rights act 2015 looks after customers (3)

A
  • customers are protected when they buy goods or services from businesses and businesses are also protected by the Consumer Rights Act when they purchase good from the supplier.
  • all products must be of satisfactory quality, fit to purpose.
  • after 30 days, customers have the right to repair, replace or refund a faulty product.
  • a business providing a service must provide the service with reasonable care and ensures that customers receive goods and services of right quality and gives them legal protection if standards are not met.
22
Q 
What is the minimum wae for the following age groups?
1) Under 18?
18-20?
21-24?
Over 25?
A

Under 18- £4.20
18-20 -£5.90
21-24- £7.38

Over 25 are paid the national living wage and it is set at £7.83 per hour

23
Q

Define

  • national living wage.
  • national minimum wage
A

1) National minimum wage and this is where businesses must pay a specified minimum wage to any employee under the age of 35 and these rates are set by the gov.
2) national living wage is businesses must pay a specified min wage to any employee over the age of 25

24
Q

Explain the main aim of the equality act 2010?

A
  • prevents businesses from discriminating against certain groups of people and also means businesses cannot refuse to give a job to a candidate because of their race, sexual orientation or any other protected characteristic.
25
Q

Explain why a business needs to follow the health and safety at work act 1974?

Give examples of what the act covers? (5)

A
  • it ensures that everyone in the workplace is responsible for looking after each other’s health and safety and a business needs to follow this act to prevent being closed down.

HASAW:

  • business provide safe place to work.
  • suitable equipment
  • training for employees in how to use suitable equipment.
  • safety for anyone who comes into their premises.
  • public liability insurance which covers them in a case where a member of the public has an accident on their premise.
26
Q

If a business follows the law, how does it affect their

cost?(5)

A

Cost:

1) Training costs include the cost of travelling to the training any any accommodation,or the cost of getting the trainer to come to the business.
2) Equipment- changed or updated.
3) Pay: National Minimum Wage and National Living Wage
4) Administrration: administration costs may increase if a business has to update its websites, paperwork, manuals, etc, to reflect what the law says- cost for paper and printing.
4) Licenses or professional services- costs include payments to solicitors and accountants who may have to advice a business on any changes in employment and consumer law.

27
Q

If a business follows the law, how does it affect their reputation-good or bad? (4) (3)

A
  • positive rep
  • customers, employees feel that they are being treated fairly by the bs.
  • higher sales due to customers being attracted to buy due to good rep.
  • better candidates for jobs with the business and more people would want to work due to good rep.

Bad rep:

  • bs taken to court, fines or even prison.
  • negative media stories= bad rep.
  • business is closed down temporarily or permanently.
28
Q

List the 6 aspects of the economy that can impact a business

A

1) Changes in exchange rates.
2) unemployment
6 Inflation
3) Changing levels of consumer income.
4) Changes in interests rates.
5) Gov tax.

29
Q

Define the term ‘globalisation

A

when businesses operate on an international scale and gain international influence or power.

30
Q

How might consumer impact levels affect a business ?

A

Low levels of consumer income:

  • consumers r more restricted so they buy lower priced products.
  • nu of products and services that are bought is also likely to go down.
  • consumer confidence is low, meaning less likely to make a big purchase, and will put it off until their income is higher.

High levels of consumer income:

  • consumers have more money to spend so they are more likely to buy higher priced goods or luxuries.
  • num of products and services that are bought is likely to rise.
  • consumer confidence is high= more spontaneous purchases
31
Q

Define the term ‘inflation’. Who monitors the rate of inflation?

A
  • increase of the prices over time.

- The Bank of England monitors the rate of inflation that changes every month

32
Q

Explain how a low inflation can benefit a business ? (2)

A
  • the amount that it pays its suppliers to remain low.
  • employees are less likely to ask for a pay rises and employers can give very small pay increases as the cost of living is not increasing very much.
33
Q

Access the impact on savers and borrowers with high- and low interest rate?

A

High:

1) Savers- paid more money for keeping their money in the bank, meaning they have more money to spend.
2) Borrowers- have to pay more money to borrow from a bank, meaning that they have less to spend.

Low:

1) Savers: paid small amounts of money for keeping their money in the bank, meaning that they have less to spend.
2) Borrowers- have to pay a smaller amount of money to borrow from a bank, meaning that they have more left over to spend.

34
Q

How might a low-interest rate encourage customers to spend more money?(2)

A
  • low-interest rates mean generally consumer income levels are high because the amount of money that it costs to borrow money is lower, however, is only useful if the business sells products to customers who buy much more when income is high.
  • if the business relies on pensioners and savers that rely on their savings, low interest may not be good for them.
35
Q

How might a low-interest rate affect the way business spend their money and borrow?(2)

A
  • interest rates are low, businesses more likely to be able to borrow money and expand or invest in the business at a cheaper rate.
  • low-interest rate could also mean other costs such as wages or supply costs are also low and if interest rates are high, this means that costs are likely to go up and staff will ask for higher wages.
36
Q

List the 8 different taxes a government collects

A

1) Income Tax- individuals pay income tax for their wages- % of their wages that they pay as tax depends on what they earn.
2) National Insurance- indiv pay this insurance to cover their pensions and other benefits and employers also pay a NIC on behalf of employees.
3) VAT- individuals pay VAT when they buy goods and service and VAT is added on the price of those products and services- paid by businesses when they buy from their suppliers.
4) Corporation Tax- business pay corporation tax on what they make.
5) Counch tax- individuals pay council day to pay for services that are provided for them locally.
6) Business rates- rates for services that are provided for them locally.
7) Excise duties- individuals pay their extra tax when they buy certain products.
8) Other taxes

37
Q

Explain the difference between imports and exports

A
  • Imports are the flow of goods and services into a country from another country.
  • Exports- flow of goods and services out of a country into another country
38
Q

What happens to imports/exports if:
-The value of the pound is weak or low? Imports are….

The value of the pound is high or strong? Imports are….

The value of the pound is weak or low? Exports are…..

The value of the pound is high or strong? Exports are…

A
  • Value of pound is weak- then imports are more expensive.
  • The value of the pound is high or strong? Imports are…. cheaper
  • The value of the pound is weak or low? Exports are cheaper
  • The value of the pound is high or strong? Exports are more expensive.
39
Q

Why is it important for a business to respond:

  • changes in technology?
  • changes in legislation?
  • changes in economic climate(consuer incomes, interest rate, taxation)?
A
  • Changes in technology: important because business can risk becoming obsolete- business failure.
  • Changes in legislation: if a business ignores changes in legislation, there’s a risk of it being penalised through being fined, having staff members imprisoned or even having the risk of shutting down. It can damage, people, equipment, environment and the reputation of the business
  • Changes in economic climate:
  • if consumer incomes go down, business have to lower their prices to remain sales remain high or may look for customers in other places, eg overseas markets- failure to make enough sales experience a cash flow problem and collapse.
  • interest rates go up, a business may have to decide to slow down any plans to expand in order to avoid borrowing money
  • if taxation falls, a business may respond by hiring more people as it can afford to pay more staff and makes a business more effective, increase its sales and put it ahead of any competitors who have not responded to change in economic climate.
40
Q

(6) List some adv and disadv (2) of payments systems?

A

Adv:

  • easy
  • 24/7
  • fast
  • -people order immediately= good customer service.
  • trends in sales can be identified quickly
  • can work in many diff currencies

Disadv:

  • may be vulnerable to fraud
  • additional fees paid by business.

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