BUSINESS AO3 (CHAPTER 3)

What is the external environment?

Surrounding factors that impact a business, which it has minimal control over

What is business planning?

Business planning involves establishing business goals and developing strategies to achieve them

What are macro factors?

Social, legal, technological, and economic conditions that a business operates in and has no control over

What are operating factors?

The primary external factors that impact a business, which a business has some control over (eg competitors behaviours, customer needs and expectations)

What are legal and government regulations?

the laws and rules made by parliaments and governments, as well as decisions made by the courts to upkeep safety of community and fair competition within industry

What can happen if a business does not comply to legal and government regulations?

consequences such as fines forced closure, or damaged reputation

What are employment laws and regulations?

rules that govern the relationship between employers and employees (eg business owner must provide safe working environment for employees, business owner should consider rules such as minimum wages)

What is environmental legislation?

The set of laws that aim to protect the environment (eg minimises businesse’s impact on enviro and protects resources such as oil, water)

What are industry regulations?

Rules that are specific to a business within a certain industry (eg may require business to obtain certain cetificates/qualifications/permits)

What are council regulations?

Local government rules made to govern a business operating in a specific geographic area (eg renovations of business: heritage listings restrict can limit renovations. waste disposal of a business: local laws can decide where a business disposes of waste

What are taxation requirements?

rules and laws related to tax that apply to all businesses (eg obtaining an ABN which allows a business to register for GST)

What are societal values and beliefs?

the principles, standards, and assumptions upheld by individuals or a group of people, which influence how they make decisions

What is societal behaviour?

the way people act and respond in various situations.

Good mental and physical health (societal values and beliefs)

Business should adapt their plan to suit the growning importance of wellbeing (eg supermarket selling healthier foods)

Employee wellbeing (societal values and beliefs)

employees should have a work-life balance in their jobs. Businesses should consider this by allowing employees flexible work hours and work from home options

Environmental Sustainability (societal values and beliefs)

Business can have negative impacts on environment. A business should source resources ethically and aim to reduce waste and pollution created.

Hygiene Practices (societal values and beliefs)

Businesses could consider placing hand sanitisers out the front of stores, or encourage employees to wear masks.

What is a trend?

A trend is a general development in the way a group of people in society are behaving

Increased reliance on advanced technology (Societal trends)

Businesses should search for ways to upgrade technological products to stay competitive, ensure latest advancements are implimented in processes

Greater focus on achieving gender equality (Societal trends)

A business may impliment workplace policies such as gender quotas

Increased purchasing of products related to wellbeing (Societal trends)

More business are selling activewear, exercise equipment

What are economic conditions?

The conditions that exist in relation to the productive performance and financial stability of a nation or other geographical area (macro factor)

What are economic condition indicators?

interest rate, employment levels, tax rates, level of consumer confidence

What are interest rates?

Price paid for money that has been borrowed, expressed as a percentage

What does high/low interest rates mean?

low interest rate = business loans are less expensive, repayments are easier to manage

high interest rate = business owner will have to pay more for the amount borrowed

What are employment levels?

Measured as the percentage of the labour force who are working in paid employment, full-time students and retired individuals are not included

What does it mean when the unemployment rate is low?

employment levels are high, and a business may find it difficult to find workers, or have to offer higher wages

What does it mean when the unemployment rate is high?

employment levels are low, and businesses will find it easier to attract workers, may only need to offer minimum wage

What are tax rates?

the percentage of income or spending that is required to be paid to the government by individuals or businesses

What is consumer confidence?

A measure of consumer’s feelings and expectations about current and future economic conditions

What does high and low consumer confidence mean?

High consumer confidence = there is a belief that the economy will grow

Low consumer confidence = belief that economy will slow down

customers who believe economic conditions will grow = more likely to spend money, optimistic about financial and job security

What are technological advancements?

are the invention and innovation of tools that solve problems and enhance processes.