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[archive] business > Topic 1.5- Understand External Influences on Business > Flashcards

Topic 1.5- Understand External Influences on Business Flashcards

1
Q

Define the term ‘ stakeholder’

A

A stakeholder is any person, group of people or other organisation that has an interest in the activities of a business.

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2
Q

What is the difference between internal and external stakeholders?

A

Internal stakeholders work within a business, either making decisions or carrying them out.
External stakeholders do not work within a business but are affected by its activities.

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3
Q

What is an owner’s interest and impact on a business?

A

interest: want to ensure the business is successful
impact: provide funding, make decisions

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4
Q

What is an employee’s interest and impact on a business?

A

employees want good levels of pay, job satisfaction and job security
impact: they can go on strike, demand higher wages

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5
Q

What is a customer’s interest and impact on a business?

A

interest: customers want good quality and a range of products at reasonable prices
impact: feedback and recommendations

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6
Q

What is supplier’s interest and impact on a business?

A

interest: suppliers want to receive payments on time, and regular orders
impact: low quality of goods

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7
Q

What are pressure group’s interest and impact on a business?

A

interest: want to increase knowledge of their cause
impact: improve working conditions, help employees

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8
Q

What is the government’s interest and impact on a business?

A

interest: want to raise more money from taxes
impact: change tax levels

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9
Q

How are conflicts between shareholders resolved?

A

Through negotiation and willingness to compromise.

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10
Q

What is e-commerce?

A

the buying and selling of products and services on the internet

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11
Q

Give 3 advantages of e-commerce.

A
  • reach wider markets
  • reduce overhead costs and break-even output compared to running a physical shop
  • sell at any time , day or night generating higher sales
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12
Q

Give 2 disadvantages of e-commerce

A
  • more competitors so may have to reduce prices to stay competitive
  • requires ongoing maintenance and malware protection which may be expensive
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13
Q

Give 3 types of digital communication tools a business could use.

A
  • email
  • websites
  • instant messaging
  • social media
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14
Q

Give two ways technology has benefited the use of payment methods

A
  • easy and convenient which means the business can serve more customers
  • Having safer and easier payment systems can encourage customers to use the services
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15
Q

Give two ways social media has influenced sales activity

A

allows a business:

  • to run sales and marketing campaigns
  • to interact with customers
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16
Q

How technology impacted business costs?- digital communication

A
  • more employees can work remotely therefore help to reduce costs for businesses,
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17
Q

Give two ways e-commerce has decreased business costs?

A
  • requires less sales staff

- requires smaller premises

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18
Q

Give 3 ways e-commerce has increased business costs

A
  • fees from handling payments online ( PayPal)
  • costs in running a website
  • may have to hire skilled IT staff
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19
Q

Give two ways social media has imapcted business costs

A
  • provides a quick, cost-effective way to communicate and interact with customers.
  • cheap from of market research
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20
Q

Give 3 examples of different payment methods

A
  • online payments
  • chip and pin
  • contactless payments
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21
Q

Give 4 laws associated with employment

A
  • recruitment
  • discrimination
  • health and safety.
  • wages ( NMW)
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22
Q

what is national minimum wage? definition+number

A

The lowest hourly rate permitted by the government that an employer can pay to employees 22 and over
- £8.91

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23
Q

what is disposable income?

A

the money left after paying for expenses and tax which is used on leisure

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24
Q

Give 3 advantages of increasing NMW

A
  • higher disposable income
  • more motivated staff
  • better work environment
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25
Q

Give 3 disadvantages to increasing NMW

A
  • increases firms fixed cost and total cost
  • if unable to there will be an increase of redundant employees
  • paying less than NMW can lead to fines and bad publicity
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26
Q

what is legislation?

A

law

27
Q

What does the consumer rights act do?

A

It protects consumers from business exploitation

28
Q

How does the consumer rights act protect customers?

A

goods and services should be:

  • as described
  • of satisfactory quality
  • fit for its purpose
29
Q

Give three ways consumer law affects businesses negatively

A
  • if broken, the firm would have to refund/replace the item increasing costs
  • case could end up in court leading to an increase of costs- lawyers
  • breaking it can lead to bad reputation– reduction of sales
30
Q

Give 2 ways a business must adapt due to health and safety legislation

A
  • firms need to carry out risk assessments to identify possible dangers
  • staff must receive training and suitable equipment
31
Q

Give 3 impacts of following the health and safety legislation

A
  • more productive workforce
  • expensive to train staff
  • if not followed, firms can be prosecuted or fined and may have to pay compensation
32
Q

What is the act that protects employees from discrimination?

A

The Equality Act 2010

33
Q

What does the Equality Act 2010 legislate?

A
  • must not discriminate against someone because of gender , race, age etc.
34
Q

Give 2 impacts of following the equality act 2010

A
  • adopting staff training

- if found discriminating, they’ll have to pay compensation

35
Q

What is the Employment Rights Act 1996?

A

employees must be provided with a written statement outlining the details of their employment.

36
Q

Give 3 benefits of meeting legal obligations

A
  • staff are more efficient
  • staff more likely to stay working for the business reducing recruitment cost
  • the business gains a good reputation
37
Q

Give 3 impacts of not meeting legal obligations

A
  • pay compensation
  • stakeholders and suppliers may be reluctant to be associated with the business
  • business’ reputation is damaged
38
Q

Give 3 benefits of unemployment to a business

A
  • lower wages due to high demand for jobs
  • government provides grants to those who provide jobs in the area
  • less disposable income- higher demand for cheaper alternatives
39
Q

Give 3 drawbacks to high unemployment rates for the business

A
  • households have less disposable income leading to a lack of demand and lower sales
  • firms may have to reduce prices
  • less skilled workers
40
Q

Give 2 ways an increase in consumer income affects businesses ( compare discount)

A
  • higher disposable income leads to higher demand and an increase in sales
  • stores selling at discount prices may decrease in sales due to less demand
41
Q

Give 2 ways a decrease in consumer income affects businesses

A
  • greater proportion of income is spent on necessities and cheaper alternatives therefore less money to spend on luxuries
  • business will sell less and may decrease output , and increase staff redundancy
42
Q

How does levels of interest impact loans?

A
  • high level of interest: more expensive loan: difficult pay back
  • low level of interest: cheaper loan: easy pay back
43
Q

Give three impacts of low interest rates

A
  • firms and consumers borrow more and save less
  • consumers have more money leading to an increase of demand - more profit
  • firms may increase output to compensate for higher consumer spending
44
Q

Give three impacts of high interest rates

A
  • Borrowing money becomes more expensive
  • consumers will save more ( TIB ) in order to take advantage of higher returns
  • reduced demand for products, less sales
45
Q

How do levels of interest impact those who save?

A

high interest rates: better returns - higher reward

low interest rate- lower returns

46
Q

Define inflation

A

Inflation is the rate at which the prices of products and services increase over time

47
Q

Give 2 impacts of inflation to a business on consumer spending

A
  • it increases in the short term creating extra revenue for a business increasing profits
  • if income does not rise at the same rate, it can lead to a fall in demand
48
Q

Give 2 impacts of inflation to a business on cost of labour

A
  • employees pressure employers to increase wages to afford the higher prices
  • higher wages leads to an increase in costs and reduce its profit
49
Q

Give 3 impacts of inflation on Global Competition

A
  • high inflation rate makes UK exports expensive so UK firms become less competitive globally
  • Firms that sell lots of exports may see its sales fall
  • when inflation is low , sales of exports increase
50
Q

How does inflation and business growth link

A
  • it is hard to predict what will happen to costs and sales

- this makes them reluctant to take risks and invest in their business

51
Q

Define ‘ Exchange Rate’

and what are they affected by.

A
  • an exchange rate is the price at which one currency can be traded for another
  • it is affected by the economy of the country and the global economy
52
Q

Define appreciation

A
  • when the value of the pound increases
53
Q

Define depreciation

A
  • when the value of the pound decreases
54
Q

Define a ‘ Strong Pound’

A
  • when the exchange rates changes so that the currency gets stronger or appreciates
  • it will be worth more
55
Q

Give three impacts of having a strong Pound

A
  • exports become more expensive whilst imports become cheaper
  • British firms that export products will see sales and profits fall as they become more expensive lowering customer appeal
  • British firms that import raw materials will make products more cheaply so their profits may go up
56
Q

Define a ‘Weak Pound’

A

if the exchange rate changes and the currency gets weaker or depreciates
- it will be worth less

57
Q

Give three impacts of the ‘ Weak Pound’

A
  • British exports become less expensive abroad resulting in more sales and higher profits
  • It is more expensive for foreign firms to sell their products in the UK allowing British firms to stay competitive as they will not have to reduce prices
  • Firms which import raw materials will have higher production costs leading to an increase in the price of their product resulting in less sales and profits
58
Q

Define Exports and Imports

A

imports: buying goods from another country
exports: selling goods to another country

59
Q

Define tax and who is it set by

A

Tax is money that has to be paid to the government going towards public services
- it is set by the government

60
Q

Give 3 ways changes to income tax impacts spending

A

if income tax falls, consumers will have more disposable income - ( a fall ) consumer spending increases leading to increased revenue for firms
- if it increases, businesses expect to sell less so will reduce the level of their investment

61
Q

Give 3 ways increasing tax impacts businesses negatively

A
  • reduces the money able to be reinvested leading to slower growth
  • tax forces firms to cut costs in order to survive and meet profit targets: making staff redundant
  • may relocate abroad to avoid paying high corporation taxes
62
Q

Give 2 impacts of lowering business tax

A

-more money able to be invested growing the business
- may encourage firms from abroad increasing competition in the market, leading to a fall in sales
-

63
Q

Give 4 different types of tax

A
  • corporation tax
  • income tax
  • value-added tax
  • council tax
64
Q

Give two impacts of increasing VAT

A
  • consumers have to pay higher process , reducing their purchasing powers
  • inflation occurs affecting business costs

[archive] business (13 decks)

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