Unit 1 - ASO3 (Macro Factors) Flashcards
(47 cards)
External environment
All the elements outside a business that may act as pressures or forces on the business operations.
Operating environment
stakeholders external to the business who have a direct impact on business operations, like: suppliers, competitors, costumers and special interest groups.
Macro environment
The broader forces, conditions, and trends in the economy and society within which a business operates, like: CSR conditions, global issues, economic conditions, legal/regulations, societal attitudes and behaviors, technological considerations.
Attitudes
the ideas, values, and beliefs held by people in a particular society, which sometimes affect the way they behave.
Behavior
actions that express ideas, values and beliefs.
what can attitude and behavior affect?
-How people live, work, and consume products.
-how business operates
-how stakeholders view business
Values and beliefs
shared principles and morals of a group or society idea/s about what is good or bad and necessary or unnecessary.
how can values and beliefs affect business?
-Force businesses to implement policies and procedures that preserve and protect the natural environment.
-Can compel businesses to give back to the local communities.
Trends
The general direction in which people’s attitudes or behavior in society is developing or changing.
Trends: demographic
-characteristics of the human population
-businesses that plan for changing demographics is likely to succeed.
-Australian population=opportunity to start new businesses in healthcare, retirement, funeral planning, etc. Possible labour shortage in future.
Trends: workplace flexibility
-creating a culture where employees meet demands of their personal lives while maintaining high levels of work performance.
-Can involve businesses offering flexible work arrangements, like remote learning, friendly workplaces, etc.
Economic conditions
the many influences that relate to economic activity in a nation or the world, and include interest rate, unemployment, business and consumer confidence levels, tax rates, exchange rates, and inflation.
Expansion
-Increasing consumer spending
-Business expectations increasingly optimistic
-increasing business investment
-sales and profits rising
-unemployment decreases
contraction
-Decreasing consumer spending
-Business expectations increasingly pessimistic
-decreasing business investment
-sales and profits falling
-unemployment increases
peak
-wages and salaries at high levels
-business operating at full capacity
-sales and profits at its highest level
-Consumer spending at its highest
-high employment
trough
-wages and salaries at low levels
-business operating at below capacity
-sales and profits at its lowest level
-Consumer spending at its lowest
-low employment
Interest rates
The cost of borrowing money from banks or other financial institutions.
High interest rates
-Consumers have less income after servicing their existing loans.
-Decreased spending on goods and services
-Decreased sales and therefore less profitability
-A business may not expand its operations
Low interest rates
-Consumers have more income after servicing their existing loans.
-Increased spending on goods and services
-Increased sales, and therefore, more profitability.
-A business will expand its operations
Employment
ABS defines employment if people work one hour or more per week.
When economy expands and reaches peak (employment)
-Businesses can struggle to hire employees due to labour shortages.
-business will have to pay higher wages to attract talent or hire overseas workers
-May have to put their expansion plans on hold
When economy contracts and reaches recession (employment)
-Easier to find employees due to increase in labour need.
-Business will pay lower wages.
-Put their expansion plans through since there is enough staff.
Tax rate
the percentage of (personal or company) income or value of a good, service or asset paid as tax.
Company tax
tax levied as a percentage of a business’ net income.
