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External influences on business activity

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Business Teacher

on 9 October 2016

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Transcript of External influences on business activity

Business A level
The law and employment practices
The law protects employees by a different set of objectives:

- prevent exploitation of workers
- control excessive use of trade union collective action

Legal constrains usually cover:
- minimal wages
- health and safety
- recruitment and employment contracts
- trade union rights
Employment termination
Unfair dismissal of the employee by the EU law is when these reasons are stated:

- pregnancy
- refusal to work on a holy day
- refusal to work overtime if it takes over 48 hours week maximum
- incorrect dismissal procedure having been followed
- being a member of trade unions
The impact of government on business
Governments introduce laws to regulate:

- Employment practice and conditions of work
- Marketing behavior and consumer rights
- Business competition
- Location of business
Recruitment, employment contracts and termination of employment
I every job opening and every job position, there has to be some written regulations that provide security to the future employees and possibility of knowing the rules and regulations of business.
External influences on business activity
Health and safety law
These aim to protect workers from discomfort and physical injury at work.

Health and safety laws usually require business to:
- equip factories and offices with safety equipment
- provide adequate washing and toilet facilities
- provide protection from dangerous machinery and materials
- give adequate breaks and maintain certain work temperatures
Evaluating the impact on business on employment and health and safety laws
Introducing laws can bring both positive and negative influences on business. Negative influences bring mostly costs:

- supervisory costs regarding firm recruitment, selection and promotional procedures
- higher wage costs if less than minimum wage was being paid before
- higher costs for paid holidays if here were none before
- employment of more staff to avoid overlong hours
- protecting clothing and equipment to meet helth and safety standards
The law and business competition
Fair competition means benefits for consumers:

- wider choice of goods
- low prices
- product quality
- competing with foreign firms
Monopolies happen when a business takes over the market and becomes an only supplier of a certain good.
Apple example:

Imagine that you are an employer, you have an opened job position for an accountant. Try to create a contract between you as a company and your future employee. Use your notebooks or ipads to write an example and present it to the class. Teacher will later show you an example contract.

For this task you have 15 minutes.
Evaluating the impact on business on employment and health and safety laws
Introducing these benefits for employees can alter their opinion on the business position they are working in and further benefit the business.
How do these benefits influence business?
Consumer rights
Why consumers need protection?

- invention of new products legally patented
- merging or taking over a company
- legal protection - government may decide to approve legal monopoly to protect a certain business

Are consumers affected monopolies?



- lower prices if there is a large scale production
- increased expenditure on new products if the objective of the monopolist is to same a patent or a domestic product


- higher prices if there is no competition to the product
- limited choice of products
- less investment and diversification of products since the demand is high
2 in 1 Monopoly
- Sometimes two companies can join forces to act as one monopolist on a specific market to manipulate it and create same effects as a single company monopolist.
- refusal to supply and making own terms
- full-time forcing
- price fixing agreements
- predatory pricing
Social audits
Social audit
is a report on the impact a business has on society - this can cover pollution levels, health and safety record, sources of supplies, customer satisfaction and contribution to the community.
The impact of technology on business activity
Information technology - the use of electronic technology to gather, store, process and communicate information.

Innovation especially but not exclusively through the new technology is one of the most important ways for businesses to create value. Not all inventions turn out to be successful innovations.
open books on page 84 and do the activity 8.5., after read the table
Applying technology to business - potential limitations
- costs
- labour relations
- reliability
- data protection
- management
management of change
within a business is one of the major determinations of successful organisations.
IT and business decision making
- managers obtain data quickly
- analyze and process data rapidly
- easier communication
- information overload
- reduction of authority to central managers
- leakage of data
Introducing technology effectively
When business is applying or trying to introduce new technology they should:
- analyze
- involve
- evaluate
- plan
- monitor
Try to write an example of a business model of business of choice.

Which technology is going to be used?

Write the possible drawbacks or benefits this new IT business system can have.
Social and demographic influences on business activity
The structure of society is constantly evolving. These changes include:

- an aging population with lowered birth rate
- the challenging role of women
- better educational facilities which are increasing literacy
- early retirement in many high income societies
- rising divorce rate and creation of single parent housing
- job insecurity
An aging population
The average rate of population is raising.

The impact on business of these changes are:

- greater number of "grey" consumers
- age structure on workforce might change
Patterns of employment
The main features of changing patterns of employment in most countries are:

- in many industries labour is being replaced with capital due to IT development
- transfer of labour from the old to new hi tech industries
- an increase of number of women in the industry
- an increase of part-time employment
- an increase of student part-time employment
- an increase of temporary and flexible contracts
- flexible working hours
- aging changes who works and who gets supported
- families smaller, women working full time and longer
- more women take shorter maternity leave
- many workplaces are cultural

Evaluating effects on business of the changes in the pattern of employment
Any effects on business can be used as an advantage of the employer, or the owner of business.

As an example we can see how Australian government researched the position of women in business:

- women tend to be more highly educated than men. Statistics show 20% more women aged 25 to 34 hold bachelor degrees compared to men.
- women can help your business understand how to appeal to female customers.

Open books on the page 88, do the activity 8.6.
The environment and corporate social responsibility
Environment is greatly affected by any business activity.
Air and noise and pollution from factory process, and many more.
They usually respond with implementing "green" policies.

Open books on page 89
do the activity 8.7.
Arguments for adopting environmentally friendly strategies
-business that reduces pollution can have a real marketing and promotional advantage

-low pollution production methods and responsible waste disposal will reduce the chances of business breaking laws relate to environmental protection

-businesses that switch to a more environmentally friendly strategy often report an improvement in the number and quality of applications they receive from potential employees.

-being environmentally responsible businesses can benefit financially. Using solar panels many electrical costs can be reduced
Arguments against adopting environmentally friendly strategies
- some businesses can have promotional benefits even if they are polluting the environment by giving lower prices for consumer goods

- profit might be increased if lower quality equipment is used for production but polluting the environment

- in many countries many laws are not adequate for saving environment so even saving it can not lower the risks of business nor produce popularity

- in some countries economic development is more important than saving the environment
Environmental audits
- assess the impact on business activity on the environment
- environmental factors are hardly measured by numbers in finance, but the can be measured by the pollution levels
Social audits
Social audits can include environmental audits but they are orientated on the community.

They include:
- health and safety record
- contribution to local community
- proportion of supplies that come from ethical sources
- employee benefit scheme
- feedback from consumers and suppliers of ethical nature of business
Open books on page 91/92, do the activity 8.8, 8.9
The role of pressure groups
Pressure groups are organisations created by people with a common interest or aim to put pressure on business or governments to change policies so that an objective can be reached.

Some examples are:
- green peace
- fair trade
- WWF - World Welfare Foundation
- Amnesty International
- Jubilee 2000
Pressure groups use different ways to achieve goals:

- publicity through media coverage
- influencing consumer behavior
- lobbying of government
Thank you
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