1.2 Influences on BusinessN5 Business Management

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1-4

StakeholdersStakeholders are people with a

key interest in a businessThe main ones in business are:

•Customers

•Government

•Community

•Owners/Shareholders

•Managers

•Employees

Owners and Shareholders

• The number of owners and the roles they carry out differ according to the size of the firm

• In small businesses there may be only one owner (sole trader) or perhaps a small number of partners (partnership)

• In large firms there are often thousands of shareholders, who each own a small part of the business

Managers

OrganiseMake decisionsHire and firePlan aheadCommand & controlAccountable to the

owner(s)

Employees

A business needs staff or employees to carry out its activities

Employees agree to work a certain number of hours in return for a wage or salary

Pay levels vary with skills, qualifications, age, location, types of work and industry and other factors

Customers• Customers buy the goods or

services produced by firms• They may be individuals or other

businesses• Firms must understand and meet

the needs of their customers, otherwise they will fail to make a profit or, indeed, survive

SuppliersFirms get the resources they

need to produce goods and services from suppliers

Businesses should have effective relationships with their suppliers in order to get quality resources at reasonable prices

This is a two-way process, as suppliers depend on the firms they supply

Firms and the communities they exist in are also in a two-way relationship

The local community may often provide many of the firm’s staff and customers

The business often supplies goods and services vital to the local area

But at times the community can feel aggrieved by some aspects of what a firm does

Community

• Economic policies affect firms’ costs (through taxation and interest rates)

• Legislation regulates what business can do in areas such as the environment and occupational safety and health

• Successful firms are good for governments as they create wealth and employment

Government

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1-10

DebateThe school is to be knocked down and a new

hospital is to be built here. Pupils will relocate to Blantyre.

You will be assigned different Stakeholder roles to debate this for/against whether it is good for the town.

Internal Factors

Technology

Labour

Finance

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11-21

In GroupsCreate a charter (set of rules) for

working conditions that you agree are acceptable for people aged 16-18.

External Factors

Political Economic Social Technological Environmental Competitive

PESTEC

Political Factors

Legislation

Tax

Trade barriers & Tariffs

Economic Factors

Inflation

Unemployment

State of Economy (Boom v Recession)

Exchange Rates

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22-36

Go FurtherFind 5 laws in the UK that affect a

business and say why.

Go FurtherWhat does GDP mean?How is it calculated?What is the Exchange Rate?

Social Factors

Demographic changes

Tastes & Trends

Technological FactorsCommunication & Connectivity

Smart phones & Tablets

Automation

Technology (EXTERNAL)

Some Recent Technological Innovations:

Google’s Driverless CarsChina’s 3D Express CoachIndoor Clouds3D PrintersGoogle’s Project GlassApple TVAsimoElectric Cars

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37-43Go FurtherPolish is now the 2nd most spoken

language in the UK. What products would you target to the Poles?

Environmental FactorsBad or unseasonal weather

Extreme weather

Natural disasters

Recycling

Green issues

Competitive Factors

New products/servicesPrice warsAggressive advertisingBOGOFSponsorshipBetter customer service

TASKQuestion Bank

44-54Go FurtherWho are the G8?What is the Earth Summit?What is the Kyoto Agreement?

Go FurtherWhat is a Price War?What is a Loss Leader?What are the features of the Copyright, Designs &

Patents Act

ICT Presentation

Prepare a revision presentation on External Environmental Factors (PESTEC)

Include a Title SlidePolitical FactorsEconomic FactorsSocial FactorsTechnological FactorsEnvironmental FactorsCompetitive Factors

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55-59