TMA2 Flashcards
What are the external factors?
The external factors are:
-Political
-Economic
-Socio_Cultural
-Technology
-Enviromental
-Competitive
What is the Political Factor?
It is an action taken by the government
What is the Economic Factor?
It is the current state of the economy
What is the Socio-Cultural Factor?
It is the cultural trends and buying habits on the market, and the population trends
What is the Technology factor?
It is the latest Technological developments
What is the Environmental Factor?
It is the actions and laws that promote the upkeep of the environment
What is the Competitive Factor?
It is the actions taken by competitors that force a firm to react
What are the Internal Factors?
The Internal Factors are:
-Finance
-Human Resources (HR)
-Current Technology (CT)
What is a stakeholder?
A stakeholder is at person or organisation who has taken an interest in the business and wants to see the business succeed
What are External Stakeholders?
They are stakeholders that are outside of the firm
What are internal stakeholders?
They are stakeholders which are inside of the firm
What is a stakeholders interest?
It is what the stakeholder WANTS from the business
What is a stakeholders influence?
It is an ACTION or DECISION that the stakeholder can take that will affect the business
How does Conflict arise?
Conflict arises when stakeholders want different things
What is an example of a conflict?
The employees want high wages whereas the owner wants to maximise the profits and keep the wages as low as possible
Who are the External Stakeholders?
-Suppliers
-Donors
-Customers
-Local Community
-Pressure Group
-Government
-Bank
Who are the internal stakeholders?
-Managers
-Owners
-Employees
-Shareholders
What is an owners interest and Influence?
An owner wants to maximise profits, and they can do this by hiring and firing staff
What is a managers interest and influence?
A manager wants status and responsibility and they can achieve this by appraising staff
What is an Employees interest and influence?
An employee wants good wages, and they can get this by demanding wages from the firm
What is a Shareholders interest and influence?
A shareholder wants high dividends and they can get this by voting at an AGM
What is a Governments interest and influence?
A government wants a successful firm to provide jobs, and they can get this by providing a grant for the firm
What is a Local Communities interest and influence?
A local community wants jobs and wealth for the community, and they can influence a business by creating demand for the businesses product
What is Suppliers interest and influence?
A supplier wants repeat purchases, and they can influence a business by extending the credit period
What is a Customers interest and influence?
A customer wants high quality products for the lowest possible prices, and they can influence a business by changing to another competitor.
What is a Banks interest and influence?
A bank wants a firm to take out loans, and they can influence a business by charging an interest rate
What are the traits of a business with poor ethics?
-Test animals
-Overwork underage’s (Child Labour)
-Drive down prices paid to farmers and producers
-Advertise irresponsibly
-Overuse packaging
-Pollute the environment
What are the traits of an ethical business?
-Help others
-Fair treatment of employees
-Fair treatment of animals
-Behave according to the law
-Protect the environment
Why do we care if businesses are ethical?
Because:
-It is morally correct
-We need to look after the environment and animals
-Need to prevent unfair treatment and labour of employees
What is a partnership agreement?
It is a legal document which sets out the terms of a partnership
Who are partnerships common amongst?
Professional occupations such as:
-Accountants
-Doctors
-Lawyers
-Dentists
What could a partnership agreement set out?
It could set out:
-What each persons responsibilities are
-How much money each person should put into the business
-The salary each person gets
-How the profits (or losses) will be split
-What should happen if a partner leaves, dies, or retires
Where are ethical trading symbols included?
In product labelling or advertising
Why do organisations want to show that they are ethical?
Because:
Better image —> More customers —> More profits
What businesses are ethical?
-The Body Shop
-H&M
-M&S
-Lush
-Boots
-McDonalds
What are dividends?
A dividend is a distribution of profits by a corporation to its shareholders.
What is the problem with understocking?
Can lead to stock of popular items running out during a sudden surge in demands
What is the problem with overstocking?
The money tied up in inventory could be invested elsewhere
