Business — In uences on business (paper 1 + paper 2)
Impact of the changing use of ICT and • Improved how businesses work as they often make processes faster because
how it in uences business activity computers can do jobs more quickly than before and people can communicate
with each other more easily in the business
• Can also lead to reduced costs in the long term because fewer man hours are
needed to carry out tasks
E-commerce • E-commerce is the process of buying or selling, goods and services online
using the internet
• Allows rms to access wider markets beyond local area which may increase
sales
• Changes marketing mix eg. place, so less physical stores needed therefore
reduces costs like rent which increases pro t
• Need to adapt to e-commerce like employ IT specialists, develop systems to
distribute products to online customers and train staff to use new computer
systems which is expensive
Digital communication • Changes the way businesses communicate with stakeholders
• Allows businesses to communicate with stakeholders quickly and at relatively
low cost.
• Digital communication is the exchanging of info with stakeholders via
technology such as websites, email and apps.
• Customers can receive updates and give feedback through email, websites,
social media and apps. However, businesses may need to respond quickly to
negative feedback, which can spread rapidly online.
What is ethical behaviour in business? • Ethical behaviour requires businesses to act in ways that stakeholders
consider to be both fair and honest.
Ethical considerations Possible trade off between ethics and pro t:
• Behaving ethical may mean pro ts will decline eg. choosing to buy from
suppliers that don’t exploit children and using fair trade products may be more
costly
Fair trade: Firms that buy raw materials from developing countries can choose to
buy from fair trade sources-this means people in developing countries who
produce the goods are paid a fair price so they can earn decent wages/improves
their standards of living.
Examples of ways in which a business can • Behaving honestly, fairly and responsibly in all marketing activities. E.g
behave ethically avoiding targeting children with advertisements for products with potentially
harmful side-effects, such as junk food.
• Choosing to buy from suppliers that don’t exploit children (child labour)
• Not using animal testing
• Paying minimum wage to employees
• Providing safe working conditions
Advantages and disadvantages of ethical Advantages:
behaviour • Sales might increase due to good publicity
• Adapt marketing to gain more customers
• Improved brand reputation/image
• Shareholders more likely to invest in a rm if it has shown that it behaves
ethically
• Treating staff ethically mean workers are more motivated which would
increase productivity which in turn could reduce costs
Disadvantages:
• May have higher labour costs than if the rm didn't work ethically
• If rm is committed to using ethically source materials eg. fair trade products
they may nd it more dif cult to nd suppliers and have to pay higher price for
their materials.
• Because rm has higher costs for being ethical they might charge higher
prices which might lead to lower sales so less revenue
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, Business — In uences on business (paper 1 + paper 2)
Environmental considerations • Business and consumers accept greater environmental responsibility in their
decision making and the costs and bene ts of businesses behaving this way.
• Impact on traf c congestion
- Staff can start car share schemes so that they reduce traf c caused by their
staff driving
• Recycling
- Businesses can recycle delivery boxes/unwanted goods/raw materials so less
waste goes to land ll
• Disposing of waste
- Businesses can dispose waste carefully so that it doesn't pollute land or water
• Noise and air pollution
- Businesses can buy more ef cient machinery that is less polluting, quieter
machinery, sound barriers/insulation
Advantages and disadvantages of being • As people become more aware of environmental issues, consumers are
environmentally friendly changing their buying decisions - people buying more environmentally friendly
products now. Taking environmental issues seriously can give rms a
competitive advantage - a green image can attract new customers and
increase sales
• Buying new equipment and developing new processes in order to be more
sustainable can be expensive. Firms have to weigh up the bene ts against the
negative effect it could have on their pro ts.
Sustainability • Sustainability means meeting current needs while using resources in a way
that does not compromise the ability of future generations to meet their needs
Possible trade-off between sustainability and pro t:
How a business’ production of goods and • Businesses being sustainable may mean that pro ts will decline eg. using
services could be sustainable: recycled materials and resources may increase costs so decrease pro ts.
• Using renewable resources
• Making products from recycle or • Global warming
renewable materials - Many industries release CO2 into the atmosphere which contributes to the
• Producing goods and services without Earth's climate becoming warmer. The consequences of this could include ice
the use of chemicals and other products caps melting, sea levels rising and ooding.
that damage the environment
• Using scarce resources
- Many resources used by rms are non-renewable. Firms now using more
renewable energy resources (such as wind and solar power), vehicles and
machinery that produce less carbon dioxide and electrical goods that are more
energy ef cient.
Interest rates • Interest rates refer to the cost of borrowing money or the reward for saving
money, expressed as a percentage.
How uctuating interest rates can affect Low interest rates (cheaper to borrow money):
businesses that rely on overdrafts and • Firms that borrow money to nance their spending (eg. using overdrafts and
loans for nance loans) will have smaller interest repayments, so they have more money
available to spend on other parts of the business.
• They may also choose to borrow more while interest rates are low and save
less and spend more eg. if they want to grow the business.
High interest rates (more expensive to borrow money):
• Businesses that rely on loans and overdrafts will have larger interest
repayments so it will be more expensive and costs will increase. This will
discourage investment and may mean businesses become less competitive or
are reluctant to expand.
• Businesses may choose to save money to earn the higher interest, rather than
borrow and spend it.
• It may also mean that rms can't afford to pay everyone who works for them-
so some people may be made redundant, and unemployment may go up.
fl fi fi fl fi fi fi fi fl fifi fifi fi fi fi fi
Impact of the changing use of ICT and • Improved how businesses work as they often make processes faster because
how it in uences business activity computers can do jobs more quickly than before and people can communicate
with each other more easily in the business
• Can also lead to reduced costs in the long term because fewer man hours are
needed to carry out tasks
E-commerce • E-commerce is the process of buying or selling, goods and services online
using the internet
• Allows rms to access wider markets beyond local area which may increase
sales
• Changes marketing mix eg. place, so less physical stores needed therefore
reduces costs like rent which increases pro t
• Need to adapt to e-commerce like employ IT specialists, develop systems to
distribute products to online customers and train staff to use new computer
systems which is expensive
Digital communication • Changes the way businesses communicate with stakeholders
• Allows businesses to communicate with stakeholders quickly and at relatively
low cost.
• Digital communication is the exchanging of info with stakeholders via
technology such as websites, email and apps.
• Customers can receive updates and give feedback through email, websites,
social media and apps. However, businesses may need to respond quickly to
negative feedback, which can spread rapidly online.
What is ethical behaviour in business? • Ethical behaviour requires businesses to act in ways that stakeholders
consider to be both fair and honest.
Ethical considerations Possible trade off between ethics and pro t:
• Behaving ethical may mean pro ts will decline eg. choosing to buy from
suppliers that don’t exploit children and using fair trade products may be more
costly
Fair trade: Firms that buy raw materials from developing countries can choose to
buy from fair trade sources-this means people in developing countries who
produce the goods are paid a fair price so they can earn decent wages/improves
their standards of living.
Examples of ways in which a business can • Behaving honestly, fairly and responsibly in all marketing activities. E.g
behave ethically avoiding targeting children with advertisements for products with potentially
harmful side-effects, such as junk food.
• Choosing to buy from suppliers that don’t exploit children (child labour)
• Not using animal testing
• Paying minimum wage to employees
• Providing safe working conditions
Advantages and disadvantages of ethical Advantages:
behaviour • Sales might increase due to good publicity
• Adapt marketing to gain more customers
• Improved brand reputation/image
• Shareholders more likely to invest in a rm if it has shown that it behaves
ethically
• Treating staff ethically mean workers are more motivated which would
increase productivity which in turn could reduce costs
Disadvantages:
• May have higher labour costs than if the rm didn't work ethically
• If rm is committed to using ethically source materials eg. fair trade products
they may nd it more dif cult to nd suppliers and have to pay higher price for
their materials.
• Because rm has higher costs for being ethical they might charge higher
prices which might lead to lower sales so less revenue
fi fiflfifi fl fi fi fi fifi fi
, Business — In uences on business (paper 1 + paper 2)
Environmental considerations • Business and consumers accept greater environmental responsibility in their
decision making and the costs and bene ts of businesses behaving this way.
• Impact on traf c congestion
- Staff can start car share schemes so that they reduce traf c caused by their
staff driving
• Recycling
- Businesses can recycle delivery boxes/unwanted goods/raw materials so less
waste goes to land ll
• Disposing of waste
- Businesses can dispose waste carefully so that it doesn't pollute land or water
• Noise and air pollution
- Businesses can buy more ef cient machinery that is less polluting, quieter
machinery, sound barriers/insulation
Advantages and disadvantages of being • As people become more aware of environmental issues, consumers are
environmentally friendly changing their buying decisions - people buying more environmentally friendly
products now. Taking environmental issues seriously can give rms a
competitive advantage - a green image can attract new customers and
increase sales
• Buying new equipment and developing new processes in order to be more
sustainable can be expensive. Firms have to weigh up the bene ts against the
negative effect it could have on their pro ts.
Sustainability • Sustainability means meeting current needs while using resources in a way
that does not compromise the ability of future generations to meet their needs
Possible trade-off between sustainability and pro t:
How a business’ production of goods and • Businesses being sustainable may mean that pro ts will decline eg. using
services could be sustainable: recycled materials and resources may increase costs so decrease pro ts.
• Using renewable resources
• Making products from recycle or • Global warming
renewable materials - Many industries release CO2 into the atmosphere which contributes to the
• Producing goods and services without Earth's climate becoming warmer. The consequences of this could include ice
the use of chemicals and other products caps melting, sea levels rising and ooding.
that damage the environment
• Using scarce resources
- Many resources used by rms are non-renewable. Firms now using more
renewable energy resources (such as wind and solar power), vehicles and
machinery that produce less carbon dioxide and electrical goods that are more
energy ef cient.
Interest rates • Interest rates refer to the cost of borrowing money or the reward for saving
money, expressed as a percentage.
How uctuating interest rates can affect Low interest rates (cheaper to borrow money):
businesses that rely on overdrafts and • Firms that borrow money to nance their spending (eg. using overdrafts and
loans for nance loans) will have smaller interest repayments, so they have more money
available to spend on other parts of the business.
• They may also choose to borrow more while interest rates are low and save
less and spend more eg. if they want to grow the business.
High interest rates (more expensive to borrow money):
• Businesses that rely on loans and overdrafts will have larger interest
repayments so it will be more expensive and costs will increase. This will
discourage investment and may mean businesses become less competitive or
are reluctant to expand.
• Businesses may choose to save money to earn the higher interest, rather than
borrow and spend it.
• It may also mean that rms can't afford to pay everyone who works for them-
so some people may be made redundant, and unemployment may go up.
fl fi fi fl fi fi fi fi fl fifi fifi fi fi fi fi
