Influences in the business environment

Question 1

Business ( corporate ) culture

Answer 1

The values, ideas, expectations and beliefs shared by members of the organisation.

Question 2

business environment

Answer 2

refers to the surrounding conditions in which the business operates. It can be divided into two broad categories: external and internal.

Question 3

Complementary business

Answer 3

One that sells a similar range of goods and services.

Question 4

deregulation

Answer 4

the removal of government regulation from industry, with the aim of increasing efficiency and improving competition.

Question 5

Ecologically sustainable

Answer 5

When economic growth meets the needs of the present population without endangering the ability of future generations to meet their needs.

Question 6

economic cycles

Answer 6

(or business cycles) the periods of growth (‘boom’) and recession (‘bust’) that occur as a result of fluctuations in the general level of economic activity.

Question 7

External environment

Answer 7

Includes those factors over which the business has very little control.

Question 8

financial resources

Answer 8

the funds the business uses to meet its obligations to various creditors.

Question 9

Globalisation

Answer 9

The process that sees people, goods, money and ideas moving around the world faster and more cheaply than before.

Question 10

human resources

Answer 10

the employees of the business; generally its most important asset.

Question 11

Information resources

Answer 11

The knowledge and data required by the business, such as market research, sales reports, economic forecasts, technical material and legal advice.

Question 12

internal environment

Answer 12

includes those factors over which the business has some degree of control.

Question 13

Market concentration

Answer 13

Refers to the number of competitors in a particular market. There are four main types of market concentration.

Question 14

monopolistic competition

Answer 14

where there is a large number of buyers and sellers in a particular market (e.g. local retailing shops)

Question 15

Monopoly

Answer 15

Complete concentration by one business in the industry.

Question 16

oligopoly

Answer 16

where a small number of larger firms have a greater control over a market (e.g. car manufacturers)

Question 17

Perfect competition

Answer 17

Where there is a large number of small firms that sell similar products. They are unable to differentiate products from each other and so can only use price as a way of achieving market share.

Question 18

physical resources

Answer 18

the equipment, machinery, buildings and raw materials used by the business.

Question 19

Regulations

Answer 19

Rules, laws or orders that businesses must follow.

Question 20

stakeholder

Answer 20

any group or individual who has an interest in, or is affected by, the activities of a business.

Question 21

Support services

Answer 21

The activities needed to assist the core operations or prime function of a business.

Question 22

sustainable competitive advantage

Answer 22

refers to the ability of a business to develop strategies that will ensure it has an ‘edge’ over its competitors for a long period of time.

Question 23

What are the external influences on a business?

Answer 23

Economic, financial, geographic, social, legal, political, institutional, technological, competitive situation, markets.

Question 24

The external environment includes…

Answer 24

Those factors over which the business has very little control.

Question 25

The internal environment includes…

Answer 25

Those factors over which the business has some degree of control.

Question 26

What do ECONOMIC influences on a business relate to? ( external influence )

Answer 26

The economic environment, which is dependent on changes in economic growth. These are characterised by boom and recession periods in the economic cycle.

Question 27

What do MARKET influences on a business relate to? ( external influence )

Answer 27

Global and domestic financial markets which influence the cost of borrowing money and therefore directly affect the level of investment by a business.

Question 28

What are the 3 major GEOGRAPHICAL factors that affect business activity? ( external influence )

Answer 28

1. Australia’s geographical location within the Asia - Pacific region. 2. Changing demographic factors. 3. The process of globalisation.

Question 28

What do SOCIAL influences on a business relate to? ( external influence )

Answer 28

Changes in fashion and consumer culture, which in turn affect business sales and profits.

Question 29

What are 3 social issues that have has a significant impact on business practices? ( external influence )

Answer 29

1. growing awareness of the environment. 2. Growing desire for family-friendly workplaces. 3. Growing belief that workplaces must cater for workplace diversity.

Question 30

What do LEGAL influences on a business relate to? ( external influence )

Answer 30

The regulations within which a business must operate.

Question 31

What do POLITICAL influences on a business relate to? ( external influence )

Answer 31

State and federal government polices, including free trade policies and the process of deregulation.

Question 32

What do INSTITUTIONAL influences on a business relate to? ( external influence )

Answer 32

Include government, regulatory bodies and other groups such as trade unions and employer associations.

Question 33

What do TECHNOLOGICAL influences on a business relate to? ( external influence )

Answer 33

New technological advancements and how technology can be used within a business to increase business productivity and communication.

Question 34

What do COMPETITIVE SITUATION influences on a business relate to? ( external influence )

Answer 34

Local and foreign competition, marketing strategies, and gaining sustainable competitive advantage.

Question 35

What do the internal influences on a business include?

Answer 35

Product, location, resources, management and business culture.

Question 36

What do PRODUCT influences on a business relate to? ( internal influence )

Answer 36

The good or service that a business is offering. Branding, packaging, logos, etc.

Question 37

What do RESOURCE influences on a business relate to? ( internal influence )

Answer 37

Human Resources, information resources, physical resources and financial resources.

Question 37

What do LOCATION influences on a business relate to? ( internal influence )

Answer 37

The visibility, cost, proximity to suppliers and customers is all relating to the location of the business and will impact sales and profits.

Question 38

What do MANAGEMENT AND BUSINESS CULTURE influences on a business relate to? ( internal influence )

Answer 38

Unwritten or informal rules that guide how people in the organisation behave.

Question 39

What are the 4 essential elements of a business culture?

Answer 39

Values, symbols, rituals, and heroes.