Understanding external influences on business - Topic 1.5

What are stakeholders?

Anyone who is affected by a business

Who are the stakeholders?

• Owners

  • Most important

  • Decide what happens to the business and make a profit

  • In limited company’s shareholders are the owners

• Employees

  • job security, promotion and wage affect employees

• Suppliers

  • Get more business when a business does well and needs more materials

• Local community

  • Businesses may cause noise and pollution

  • Or a business may other more jobs meaning more money is available to spend at other jobs

• Customers

  • Want high quality products at low price - benefit when business meet customer satisfaction

What stakeholders outside the business are affected?

• Government

  • Receive taxes if the firm makes profit

  • Receive money

• Pressure groups

  • Try to persuade people to think a certain think about a business

  • This influences if customers shop there and the decisions a business makes

What do owners need to do with other stakeholders?

• Needs to meet customer needs

• Need to pay suppliers on time

• Keep workers happy to keep high productivity

What is e-commerce?

Using the internet to buy or sell products

What are the different payment types?

• Online payments

• Chip and pin

• Contactless payment

What social media can be used to communicate within a business?

• Websites

  • Communicate with customers

• Email

• Mobile apps

• Live chat

• Video call

Why is social media beneficial to businesses?

• Easy for users to share information / communication

• Good advertisement

• Customer service

• Promote local events

How does technology affect a terms costs and sales?

• Technology can carry out process instead of people

  • Reduce cost as fewer work hours are needed from employees

• Can lead to increased sales for a business

  • Eg e-commerce as they can reach a bigger market

• Modern payment systems

  • Easier and faster for people to buy products so they may buy more

What are the disadvantages to adapting to new technology?

• Expensive

• Might have to hire staff to maintain it

• Buy new equipment and training so employees know how to use the new technology

What is employment law?

Describes the many different laws associated with the relationship between employers and employees

• Pay

• Recruitment

• Discrimination

• Health and safety

What is the NMW and NLW?

National minimum wage - the minimum amount 20 years and younger has to be paid

National living wage - the minimum amount 21 years and over have to be paid

What are the advantages of NMW and NLW?

• Better motivated and increased staff productivity

What are the disadvantages of NMW and NLW?

• A large fine if not met

• Increases firms cost → increases prices → possible fall in fails

What are the laws on recruitment?

• Can not discriminate someone based on religion, gender, sexual orientation, age, race and disabilities

• New recruits must have the legal right to work in the UK

What is the equality act?

All employees need to be paid the same amount for the same job

What is the health and safety legalisation?

Help to make sure that risks to people at work are properly controlled

What are the terms in the consumer rights act?

• The product should be fit for its purpose

• The product should match its description

• The product should be of satisfactory

How does the consumer law affect businesses?

• If consumer laws are broken they have to face the cost and inconvenience, they could be sued and harm their reputation

Why is unemployment a issue?

• The economy on the whole produces less output

• People have less disposable income

• People may loose skills

What is a tax?

The money that goes to the government

What impacts do taxes have on business growth?

• Tax increases → reduces amount of money they have to reinvest → slow grorwth

• Tax decreases → increases amount of money they have to reinvest → fast growth

What is inflation?

The increase in the price of goods and services