External Influences

• Protests resulting from unethical behaviour


  • Customers with ethical principles could be put off from purchasing from the business → sales revenue may fall
  • Competition may benefit as customers switch from non-ethical business to ethical business → sales may increase for businesses not involved
  • Businesses may be forced to behave in a more ethical manner → this could see costs rise, possible increased prices if the costs are passed on to the customer
• Poor reputation


  Could lose customers/market share
• Suppliers


  Difficult to obtain less stock → loss of sales revenue/profit
• Ethical policies


  Set out the actions that a business will take to ensure that its decisions and actions are ethical
• Business ethics


  Involve a business doing what is morally right for its stakeholders
• Reasons why businesses have strong ethical policies


  • Ideology of owners
  • Consumer pressures as they become more aware of environmental issues
  • Meeting government targets e.g. CO2 emissions/litter/waste
  • Avoids bad publicity, loss of customers
  • Concern for employees, improves worker morale/motivation
  • Concern for producers e.g. fair trade, improves reputation
  • Attracts workers, improves quality of staff
• Social responsibility


  An approach to managing business in which the interests of all groups in society are taken into account when making decisions
• Ways to operate ethically


  • Using fair trade goods
  • Using biodegradable/recyclable packaging
  • Recycling schemes/reducing waste
  • Reducing food miles
  • Giving food away to charities
  • Reducing CO2 emissions/carbon offsetting
• Animal rights


  Refers to the idea that animals should be treated humanely and protected from exploitation and abuse
• Ways a business can be deemed as acting unethically


  • Not behaving in a morally correct manner
  • Exploiting the small businesses/taking advantage of the business/workers/customers
  • Forcing businesses to close/go bankrupt, creating unemployment and poverty
  • Making it hard for smaller business to break-even/survive
• Consumer Legislation


  Laws that have been introduced to prevent businesses from treating their customers unfairly
• Ways businesses can treat customers unfairly


  • Selling goods and services that are not as described
  • Selling unsafe products
  • Selling poor quality products or at unfair prices
  • Selling consumer information to other businesses without permission
• Consumer Rights Act 2015


  Law that provides consumers with clear rights and protection when buying goods and services. States all products sold must be of satisfactory quality, fit for purpose and as described
• What the Consumer Rights Act covers

  • Product quality
  • Returning goods
  • Repairs and replacements
  • Delivery rights
• Consumer Protection Act 1987


  Law that prevents firms from selling dangerous products to consumers. Makes businesses liable for any illness or injury caused by their products
• Unfair Trading Regulations 2008


  Law that replaced the Trade Descriptions Act. Makes it illegal to give consumers incorrect information on packaging and labels. Outlines aggressive selling tactics
• Consumer Credit Act 1974


  Law that stops businesses charging very high interest rates on consumer loans. Gives consumers a week to change their minds about a loan agreement
• Data Protection Act 1998


  Law that controls the use of consumers' information. Businesses must store information securely and avoid theft/loss. Prevents selling personal details without consent
• Legal responsibilities a business has to its customers


  • Ensure customer environment is safe
  • Ensure goods are fit for sale/purpose/as described
  • Provide redress for customers
  • Ensure accurate description of goods/services
  • Ensure accurate weights and measures
• Computer Misuse Act 1990


  Act that prevents people accessing computer information they have no right to read
• Food and Drugs Act 1984


  Law that lists what can and cannot be added to food products. Makes it illegal to make or sell food in unclean buildings
• Food Safety Act 1990


  Law that makes it illegal to sell unsafe food that may cause illness. Covers farmers, restaurants and shops
• Labelling of Food Regulations 1970


  Law that states packaged food must contain the ingredients listed on the label
• Copyright

  Rights that writers and artists have over their works
• Trademarks

  Logo or symbol that distinguishes a business's products or brands from others
• Intellectual Property


  Property that cannot be seen or touched but is the result of creativity, including businesses' names, inventions, product designs, books, paintings and music
• Patents

  Right to be the only user or producer of a new invention for a stated period
• Advertising Standards Authority (ASA)

  Self-regulated organisation that regulates the content of advertisements, sales promotions and direct marketing to ensure they comply with advertising standards
• Most ads are legal, decent, honest and truthful. In 2017, the ASA removed 7,099 that weren't
• Weights and Measures Act 1986


  Law that states weights and measures must be stated on packets or containers, and the measure must be correct
• Unemployment


  Exists when someone is looking for a job, but is unable to find one
• Problems caused by unemployment

  • Reduction in income for consumers resulting in a fall in living standards
  • The stress of finding a new job if businesses are not recruiting
  • Social and emotional effects of being unemployed
• Problems caused by unemployment for businesses


  • Fall in consumer incomes results in a fall in demand for their goods and services
  • Financial problems if they are a small business or a business with no or little savings/retained profit
• Problems caused by unemployment for government

  • Fall in revenue from Income Tax, VAT and Corporation Tax
  • Increase in welfare payments
• Economy


  Made up of millions of individual consumers, many thousands of businesses and governments. All take decisions on what to buy and produce.
• Gig Economy


  Refers to businesses that use mainly temporary workers who do not receive benefits such as guaranteed hours of work or holiday or sick pay
• Economic Climate


  Describes the state of key factors within a country such as the level of goods and services produced and the number of jobs available
• Producers


  Suppliers of goods and services
• Consumers


  Individuals who buy goods and services from businesses. The final users of goods and services. They are at the end of the distribution channel.
• Unemployment Rate


  The number of people who are unemployed as a percentage of those working or looking for work