2 - Influences on business

• Why is technology important to a business?

  makes businesses more efficient to cut costs, increase sales and profits
• What does administration do in a workplace?

  write letters and keep records of transactions
• What dos communications do in a workplace?

  inform stakeholders of needs and progress of business activity
• What does recruitment do in a workplace?

  links to admin for possible recruits
• What is CAM?

  Computer-aided manufacturing
• What does CAM mean?

  machines that are used in production are controlled by computers, little human input
• What is automation?

  little human input during production
• Benefits of using CAM?

  ideal for production on a large scale, can be run 24/7, fewer workers are needed during production, can be integrated with CAD with speeds up production, less scope for errors during production as it allows a standardised quality
• Drawbacks of using CAM?

  costly as it depends on machinery which have sophisticated softwares, needs specialists to run computers which increases labour costs, causes unemployment and redundancy
• What is CAD?

  Computer-aided design
• What does CAD mean?

  using computer software to generate 3D models of a finished product
• Benefits of using CAD?

  allows for precision during manufacturing as goods can be viewed before to find the best design which improves quality and accuracy, consumer feedback can be gathered before production, can be linked to CAM to speed up production
• Disadvantages of using CAD?

  software is expensive, security issues, require specialists to run programs
• What is CIM?

  Computer Intergrated Manufacturing which is the integration of CAD and CAM
• Examples of businesses that have changed due to technology changes?

  Music - Physical media is less due to online streaming

  Blockbusters - Physical media is less due to online streaming
• Advantages of technological changes?

  Better communication between business and customer

  Products can be made to meet the needs of customers more precisely

  New products attract new customers
• Disadvantages of technological changes?

  Production methods are expensive and causes unemployment
• What is e-commerce?

  buying or selling using an electronic system such as the internet
• What is m-commerce?

  buying or selling through wireless handheld devices
• Globalisation is the movement of goods, services, people and capital to allow businesses to sell their products anywhere in the world
• Benefits of globalisation

  Increased markets - increases sales

  access to cheaper labour, supply chains and raw materials

  transfer of knowledge and skills

  growth for businesses
• Drawbacks of globalisation

  International competitors with cheaper prices

  language barriers - when marketing and trading

  foreign currency issues - exchange rates and conversions

  importing to internationally may come with local tariffs or taxes
• International trade may take place because...?

  not all goods are available

  goods and services can be produced more cheaply
• Exports are goods produced in one country and sold in another one
• Imports are goods and services brought from producers overseas
• A fall in the value of the pound will make imports more expensive
• Disadvantages of a business having to use different currencies

  Transaction costs

  uncertainity for costs and prices
• Business Ethics involves whether a business decision is morally right or wrong
• An ethical policy sets out the actions a business will take to ensure its decisions and actions are ethical
• Animal rights refers to the idea that animals are treated humanely
• Fair Trade is obtaining products in which producers aren't exploited and are paid fairly
• Governenment can be treated unethically when a business doesn't pay taxes
• An ethical business would...

  promote in a way that customers are treated fairly, provide goods in a quality appropriate to the price, not include harmful materials or ingredients in products, be aware of consumer concerns regarding animals
• Why do businesses have strong ethical policies?

  Avoids bad publicity → reduces loss of customer base

  Meeting government targets like CO2 emissions → avoids fines/costs

  Consumer pressures → important for image of the business, more sales
• Ways to operate ethically

  Using fair trade goods

  Using biodegradable packaging → environmental benefits

  Treating workers ethically in terms of wages and conditions
• Ways to be deemed acting unethically

  Not using fair trade products, paying workers low, exploiting small businesses (paying lower prices so small businesses can cover costs)
• Advantages of behaving ethically

  Customers are attracted to products ethically produced so sales increase, employees that are treated fairly are more motivated, suppliers treated ethically will be able to fulfil more orders
• Disadvantages of behaving ethically

  Materials are more expensive when ethical policies are adopted, increasing costs, ethical policies may be hard to get approved especially if there is a cost attached to them, may need training of ethical policies which increases costs
• Premium prices for ethical products → increased revenue
• External costs occur when a business' activities have harmful effects on people not involved in production