Topic 6-Influences On Businesses Flashcards
What is ethics?
Ethics is about what is morally right and wrong to do.
What do some ethical issues include?
- Treatment of suppliers.
- Sourcing of materials.
What things are viewed as bad ethics from a business to do with the treatment of suppliers?
- Late payment of bills.
- Forcing prices down.
How can the late payment of bills be classed as unethical?
It may mean that smaller businesses face severe cash flow problems.
Why do some businesses not behave ethically?
It is often cheaper not to and if they know their products or services will still sell they may not change what they are doing.
What are some problems with being ethical?
- Increases costs.
- Lowers profit margins.
What is a benefit of being ethical?
Good image.
Will customers pay more for a business that is ethical usually?
Yes.
Give an example of an ethical business…
Lush.
What are three ways that businesses make use of the environment?
- Pleasure.
- To dump waste.
- Resources.
What does sustainable production mean?
Making goods and producing services without depleting natural resources.
Give two ways a business can be sustainable…
By using renewable resources and reducing waste.
What is the ‘economic climate’
The economic climate refers to the state of the economy a business operates in.
What is meant by an economy?
An entire network of producers,distributors and consumers of goods and services in a community.
What is GDP?
A measure of how much a country produces each year.
What does GDP influence?
The level of employment and income.
What does GDP stand for?
Gross domestic product.
What are the effects of rising GDP?
- Income rises.
- Unemployment falls.
- Customers spending rises.
What are the effects of a falling GDP?
- Income falls.
- Unemployment rises.
- Customer spending decreases.
How does a falling GDP affect income?
It decreases it.
How does a fall in a country’s GDP affect customer spending?
They have less money to spend and so spend less.
How does a ride in GDP affect unemployment?
It falls.
What is the level of income?
The average income of people in a country.
What is disposable income?
The amount of money an individual has available to spend after taxes have been deducted.
Are all businesses affected in the sane way by changes in income?
No.
What does the level of employment mean?
The number of people who are in work in a country.
What does the level of unemployment mean?
The number of people who are out of work in a country.
How can a recession affect the human resource department of a business?
-They will seek to improve productivity.
How can a recession affect the production department of a business?
They may need to reduce production costs per unit.
Why might a business need to reduce production costs per unit?
In order to sell at lower prices.
How can a recession affect the finance department?
They will look to reduce costs.
