External Influences on Business Activity
Privatisation
↳ The act ofselling state-owned and controlled organisations to investors to the sector
private
Advantages Disadvantages
In several industries, business decisions need
greater efficiency since decision
making process
. ·
in
private
-
sector business is faster to be basedon the needs of society and
give responsibility for success to
managers not just interests
the ofshareholders.
·
motivation than state ·Many strategic industries could become
and
employees, higher
-
owned businesses private monopolies hence they could exploit
consumer with high prices
Nationalisation
↳ The transfer ofprivately owned businessess to state (government) ownership and control
Advantages Disadvantages
Government will have control of Less
profitmotive, less incentive to
major operate
· ·
industries the
industry efficiently. Government may have
of be achievedby subsidies to
Economies scale to
provide loss-making nationalised
·
can
merging all
private businesses in an
industry industries
into one nationalised corporation Important
·
business decisions may be taken for political
reasons.
Legal Restrictions
It embraces:
·
Employment practices, conditions of work and wage levels
Marketing behaviour, consumer rights and controls over some products
·
·
Competition
·
business
Location of
The law and employment practices
Main Objectives cover areas
·
Prevent abuse of workers by
·
Recruitment, employment contracts
powerful employers by insisting and termination
ofemployment
on appropriate levels of health ·
Health and safety at work
and safety and minimum Minimum Wages:The set minimum
wage
·
rates wage per hour /per week/per month
·
Control excessive use oftrade union that
employers are not allowed to
pay less
collective action
Legal restriction
Itembraces:
Employees practices, conditions ofwork and
wage levels
·
·
Marketing behaviour, consumer rights and controls over some
products
, ·
Competition
·
location in businesses
The law and
employment practices
Main objectives Cover areas
·
Prevent abuse ofworkers by powerful
·
Recruitment, employment contracts and termination
employers by insisting on
appropriate levels ofemployment
·Health and safety
of health and
safety andminimum
wage at work
rates ·
Minimum
wages:the set minimum
wage per hour/per week/
·
Control excessive use oftrade union collective per month that employers are not allowed to
action
pay less
Minimum Wages
Critism
Main objectives
·
Prevent exploitation ofpoorly organised ·Employers might keen on
recruiting casual staffs
by powerful employers contractand
workers with no
employment no
job security
·
Reduce
inequalities between the high
·
Increasing labour can
cost reduce business competitiveness
paid and low paid in the
economy
.
Other workers
being paid above the minimum wage
just
raise
Effects ·
Inflation might increase as business costs increase
·
Enhanced standard of living and
purchasing power of low-paid workers
·
a work incentive
EmploymentPractices
Recruitment, employment contracts e Health and Safety
at work
its termination Aim to protectworkers from discomfort and
The right ofworkers are
legally protected in
physical injury at work
the
following forms: Businesses have to equip factories and
·
· Written contract
ofemployment offices with
safety equipment and train staff
·
Minimum working ages to use it
Maximum
length ofthe working week Provide protection from dangerous machinery
·
·
Holiday andpensions and materials, adequate and toilet
·
washing
· No discrimination facilities
·
give adequate breaks
Impact on business
Benefits Drawbacks
By employing employment contract, Adding supervisory costs for checking
·
on
workers will feel more secure and recruitment, selection and promotion
more motivated procedures
Privatisation
↳ The act ofselling state-owned and controlled organisations to investors to the sector
private
Advantages Disadvantages
In several industries, business decisions need
greater efficiency since decision
making process
. ·
in
private
-
sector business is faster to be basedon the needs of society and
give responsibility for success to
managers not just interests
the ofshareholders.
·
motivation than state ·Many strategic industries could become
and
employees, higher
-
owned businesses private monopolies hence they could exploit
consumer with high prices
Nationalisation
↳ The transfer ofprivately owned businessess to state (government) ownership and control
Advantages Disadvantages
Government will have control of Less
profitmotive, less incentive to
major operate
· ·
industries the
industry efficiently. Government may have
of be achievedby subsidies to
Economies scale to
provide loss-making nationalised
·
can
merging all
private businesses in an
industry industries
into one nationalised corporation Important
·
business decisions may be taken for political
reasons.
Legal Restrictions
It embraces:
·
Employment practices, conditions of work and wage levels
Marketing behaviour, consumer rights and controls over some products
·
·
Competition
·
business
Location of
The law and employment practices
Main Objectives cover areas
·
Prevent abuse of workers by
·
Recruitment, employment contracts
powerful employers by insisting and termination
ofemployment
on appropriate levels of health ·
Health and safety at work
and safety and minimum Minimum Wages:The set minimum
wage
·
rates wage per hour /per week/per month
·
Control excessive use oftrade union that
employers are not allowed to
pay less
collective action
Legal restriction
Itembraces:
Employees practices, conditions ofwork and
wage levels
·
·
Marketing behaviour, consumer rights and controls over some
products
, ·
Competition
·
location in businesses
The law and
employment practices
Main objectives Cover areas
·
Prevent abuse ofworkers by powerful
·
Recruitment, employment contracts and termination
employers by insisting on
appropriate levels ofemployment
·Health and safety
of health and
safety andminimum
wage at work
rates ·
Minimum
wages:the set minimum
wage per hour/per week/
·
Control excessive use oftrade union collective per month that employers are not allowed to
action
pay less
Minimum Wages
Critism
Main objectives
·
Prevent exploitation ofpoorly organised ·Employers might keen on
recruiting casual staffs
by powerful employers contractand
workers with no
employment no
job security
·
Reduce
inequalities between the high
·
Increasing labour can
cost reduce business competitiveness
paid and low paid in the
economy
.
Other workers
being paid above the minimum wage
just
raise
Effects ·
Inflation might increase as business costs increase
·
Enhanced standard of living and
purchasing power of low-paid workers
·
a work incentive
EmploymentPractices
Recruitment, employment contracts e Health and Safety
at work
its termination Aim to protectworkers from discomfort and
The right ofworkers are
legally protected in
physical injury at work
the
following forms: Businesses have to equip factories and
·
· Written contract
ofemployment offices with
safety equipment and train staff
·
Minimum working ages to use it
Maximum
length ofthe working week Provide protection from dangerous machinery
·
·
Holiday andpensions and materials, adequate and toilet
·
washing
· No discrimination facilities
·
give adequate breaks
Impact on business
Benefits Drawbacks
By employing employment contract, Adding supervisory costs for checking
·
on
workers will feel more secure and recruitment, selection and promotion
more motivated procedures
