Unit 2

• Health and safety law

  Ensures all employees are safeguarded
• Consumer law

  Introduced to prevent businesses from treating their customers unfairly
• A contract of employment

  A legal document that states the hours, rates of pay, duties and other conditions under which a person is employed
• National living wage

  An hourly rate of pay which is set by the government
• Benefits of globalisation

  Rapid growth

  Inward investment

  Cheaper resources
• Drawbacks of globalisation

  Fierce competition

  New competitors

  Threat of takeover
• Impacts of globalisation

  An increase of multinational companies who supply products across the world

  Increased international trade

  People have moved across international borders
• What is globalisation?

  The trend for markets to become worldwide in scope

  The increasing interconnectedness of the economies of the world
• What is income elasticity of demand?

  Measuring how much demand for a product changes as income changes
• When interest rates rise…

  People will save more and spend less

  Businesses will make less sales and borrow less
• What is the economic climate?

  The state of the economy
• What is the economy?

  The economy is made up of consumers, businesses and governments

  These groups make decisions on what to buy, sell, produce, import, where to work etc

  All these decisions decide what is produced, bought and sold
• What is sustainability?

  Methods of production which can be continued in the long term without damage to the environment
• What are ethics

  Ethics refer to weather a business decision is thought to be morally right or wrong
• What is a risk?

  The possibility of something going wrong
• Methods of reducing risk

  Make a business plan

  Invest in training of workers

  Use of experts or consultants who have specialised methods

  Sell in different markets so if one fails there is always another
• Internal risks

  Workers may refuse to go to work

  Fire or theft

  Bad publicity

  Workers leave to work for a competitor
• External risks

  New competitors

  Natural disasters

  Government laws

  Technological changes

  Changes in the economy
• What is uncertainty?

  The lack of information about a situation meaning the outcome or consequences are very hard to predict
• Why do businesses face uncertainty

  Political environment

  Economic uncertainty

  Social changes

  Changes in technology

  Legal

  Environment

  Competition
• Characteristics of monopolies:

  Little or no competition

  Consumers could be charged high prices

  Less choice for consumers

  Regulated by the government