Influences on a business-Pressure groups/STEP infl
- A pressure group is an organised grup of people, who share interests and want to use those interests by influencing others.
- A pressure group may be: Local-Maybe a residents association campaigning against factory noise. National-Such as the Automobile Association campaigning for motorists. International-Organisations such as GreenPeace.
- Trade unions are influential preeure groups.
STEP(Social, Technological, Economic, Political)
- Social influences are changes in society (fashion, tastes) Also the average age.
- Technological developments make some businesses grow (BT) and makes some adapt (Banks, with internet banking)
- Economic influences include, level of demand and tax rates
- Political influences are the least affecting a business as it might affect when they choose to step in to the economy and help it.
Influences on a business-Government/EU
Government spending and taxation
- A change in government spending affects the level of ecomnomic activity and, therefore, the amount of work for businesses.
- A change in taxes or interest rates affects a businesses profit.
Government helps businesses by:
- Providing infomation and advice.
- Offering finacial assistance, such as grants and loans.
- Offering straining schemes.
- Improving infrastructure.
EU (European Union)
- The Sales and Supply of Goods Act protects consumers when buying products.
- Unfair Commercial Practices Directive (UCPD) stops businesses from misleading consumers or using 'high pressure selling' techniques.
- Entrepreneurs are people who take a financial risk by starting a business in the hope of gaining profits.
- They find and select the resources-human, physical and financial-needed for their business.
- Some well known Entrepreneurs:
- Sir Richard Branson, with his virgin businesses
- Sir James Dyson, who created the Dyson vacuum cleaner
- Sir Alan Sugar, best known for Amstrad company and The Apprentice
- It is important for Entrepreneurs to gain a competitive advantage-a distinct adavntage that the business has, which will help it to be more successful than its competitors.
- Skills that succesful Entrepreneurs need:
- Determination, seeing things through to the end.
- Initiative, spotting opportunities and making things happen.
- Leadership, helping and inspiring others in order to achieve what's required.
- Honesty, when dealing with others and making honest or sensible decisions
- Ability to Plan, setting business goals and targets
Sources of finance
- Organisations need start up capital so they can:
- Start In business, they need assets, equipment ect.
- Survival, they need to survive to start thinking about profits
- Growth, extra finance is needed to buy more assets to expand
- Sources of finance for the private sector:
- Short term- trade credit, dealys paying bills
- Reduce stock to 'free up' cash
- Sell surplus assets that aren't required anymore
- Dip into savings or get an overdraft
- Check if eligible for a government grant
- Shares are the main sources of long-term finance for limited companies. They are sold to people who then become share holders.
- Chosing the finance- there are two key influences when choosing the finance for the business, the type of project and the nature of the business.
A budget is a financial plan, a detailed forecast of future action for the business. Businesses need to budget for two main reasons: to plan for future resources they will need and to check their progress by comapring actual results agianst their budget.
- Budgeting is very importatant and managers need to co-ordinate carefully what money goes where. For example the sales budget affects the production budget, which then affects the raw materials budget, which in turn affects the cash budget
- The sources of cash is listed on the previous card. The main uses of cash are:
- To buy assests, to pay expenses, to pay back loan interest, to pay taxes and to allow credit to customers.
- A cash forecast is produced so a business may be able to predict when there will be:
- Cash shortfalls-More outflows than inflows - so borrowing, in the form of an overdraft or loan, can be arranged.
- Cash surpluses - more inflows than outflows - which can be invested by the business.
An organisation will have a hierarchy. The status of employees in the hierarchy is shown bya chain of command.
- There are two types of business structures, tall and flat. A tall structure is associated with:
- Long chains of command, narrow spans and formal communication, specialised employees, slower decision making
- Businesses may 'flatten' their structures in order to speed up communication and cut out bureaucracy.
- Organising a business by functions e.g. marketing, finance, production allows specialisation to take place.
- A line of authority is a hierachy of employees, it starts with Board of directors, then may go down to different department managers, and then the different staff related to the managers.
- A matrix structure is when staff from different departments work together to get taks done quicker. Once the taks is complete the staff return to their traditional roles.
Human resources is a term used to decribe who comprises of an organisation Many businesses use a workforce plan. Methods of recruitment:Newspapers and magazines, Job Centres, employment agencies
- Businesses use many methods to select the right person for the job. They may ask apllicants to send their curriclum vitae (CV) with their apllication. After that stage they may have aptitude tests, intelligence and personality tests. Then finally they will have an interview with the last few applicants.
- Training-New employees may have induction training to get them used to the comanies system and the way they do things. Also they could give staff on the job training where they train while working, off the job training where they learn maybe at college and an appraisal where a company finds strengths and weaknesses of employees.
- Businesses may try to motivate employees to make them work more efficinetly. They could do this by: team-building excercises, trips out to improve moral and improving hygiene and basic needs.
The market consists of different people: buyers, sellers and products. Marketing is needed because people nusinesses and advanced economies all specialise.
- Businesses may carry out a SWOT (Strengths, weaknesses, Opportunities and threats) to see how they can improve there business and expand into f#different markets.
- Dividing the market into different parts is known as market segmentation. If the business focuses on one market only it is known as a niche market
- Ways to segment the market: