Exploring Business Activity P5

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Anton Prinson Sritharan                                                                                BTEC Business National Unit 1

Exploring Business Activity P5

  • Describe how three external factors are impacting upon the business activities of the selected organisations and their stakeholders.

I will see therefore that the businesses environment consists of all those things outside the businesses. The businesses need to keep a watchful eye on the environment because it is continually changing, to assist in this process they might use PEST analysis.    

Political factors: Have a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. Political factors: include legal aspects (e.g. Microsoft copyright), the general political ethos. 

Economic factors: Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. to look at: Economic factors include the effect of the economy (e.g. Interest rates) on individuals, and on organisations. 

Social factors: The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include demographic change (e.g. Oxfam is concerned of changes in proportion of age groups and educational changes.), other changes in social habits (where people go to shop, leisure expectations), 

National and international laws: International laws are created by international bodies; in particular Britain can be affected by European Union laws. The European Union courts are increasingly important in making judgements which apply across the Union. European Union laws are regarded as having supremacy over national laws. 

Employment: Over time a body of law or  has developed governing employer/employee relations and the rights of employees and employers in the workplace.

The Working Time Directive, 1999

Both businesses must guarantee to all employees a maximum 48 hours working week, and a four week holiday. Employees can choose to opt out of the Working Time requirement and agree to work longer hours if they wish.

  • Contracts: Oxfam employees have rights under their contract of employment. An employment contract is a legal agreement between an employer and an employee, setting out the terms on which one agrees to employ the other. An employment contract will deal with many issues, including the employee’s job description and duties, hours of work, pay, holiday and sick leave.

  • Consumer rights: Microsoft business makes sure that their goods and services meet general safety requirements. They must make sure that everyone on their premises is safe. In addition, they must ensure that what they offer the customer is accurately described and that the claims they make about their products are true. Consumer legislation provides real challenges for business: The consumer legislation helps to further inform consumers about their rights. This leads to every-increasing pressures on business to operate in a safe and reliable way. E.g. compliance costs money. Making sure that they keep within the EU law is a costly business to operate in a safe and reliable way.

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  • Environmental issues: The environment has become a major issue. These businesses need to show that they are aware of any issues if they are to keep various stakeholder groups happy, including:

  • Employees: who may not to work for a company with a poor environmental record

  • Customers: who may want to buy some products that need them

  • Pressure groups: Like friends of the Earth and Greenpeace.

  • Fraud: There is an increased amount of fraud which takes place as a result of cybercriminals hacking into Microsoft company databases, the majority of fraud takes place within ...

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