Unit 1 AoS3 - The External Environment (SAC 3)

Question 1

Distinguish between the external macro and operating environments.

Answer 1

• Both a part of the external environment

Marco: the broad conditions and trends in the economy and society within which a business operates.
(Business = no control)
- Corporate social responsibility
- Global issues
- Economic conditions
- Legal and government regulations
- Societal attitudes and behaviours
- Technological considerations

Operating: the specific outside stakeholders with whom the business interacts in conducting its business.
(Business = some control)
- Suppliers
- Customers
- Competitors
- Special Interest Groups

Question 2

Define the term ‘globalisation.’

Answer 2

The effect of hi-tech communications, lower transport costs and unrestricted trade and financial flows turning the whole world into a single market, producing a more integrated global economic system

Question 3

Explain the phases of the business cycle.

Question 4

Explain the impacts of technology on a business during the planning stage

Question 5

Define ‘corporate social responsibility’

Answer 5

Managing a business in such a way that the broader social welfare of the community, including its employees, customers, suppliers and the environment, is taken into consideration when making business decisions.

Question 6

Outline what is meant by business and consumer confidence levels and how these may affect
profits of a business

Question 7

Define business environment

Answer 7

The surrounding conditions in which the business operates which can be divided into internal and external.

Question 8

List the factors of the macro environment

Answer 8

(Business = no control)
- Corporate social responsibility
- Global issues
- Economic conditions
- Legal and government regulations
- Societal attitudes and behaviours
- Technological considerations

Question 9

List the factors of the operating environment

Answer 9

(Business = some control)
- Suppliers
- Customers
- Competitors
- Special Interest Groups

Question 10

Explain the key legal and government regulations affecting businesses in the planning stage

Question 11

Explain societal attitudes and behaviour, such as values, beliefs and trends

Question 12

Explain, with reference to a contemporary business you have studied this year, why it is important for a
business to be aware of trends.