E O N BUS INES S A C TIVIT Y

EXTERNAL INFLUENC

N BU SINE SS A C T IVITY
FLUENCES O
• EXT ERNA L IN
O LO G ICAL,
MIC, SO C IAL , T EC HN
E G A L , E CO N O
(POLITIC A L , L
& O T H E R BU SIN E SSES
NM E N TA L , D EM O G RAPHIC
ENVIRO
 INTRODUCTION
c o n st a n tl y c ha n g ing e n vironment.
operate in a
• A ll b usi n e ss e s
e a sp e c ts of the
ta n ding that a lt h ou g h so m
e ve lo p a n u n d e rs
• Candidates w il l d
te in a contex t in w h ic h th in g s c h a n g e .
e d, b u si n e ss e s o p e ra
environment are fix
th e to o ls a b u si n e ss u se s to
d e v e lo p a n u n d e rs tanding of
• Candidates sh o u ld
t to e n su re th e su c c e ss o f the
te rn a l a n d e x te rn a l e n v ironmen
analyse the in
business.
 POLITICAL AND LEGAL
a ti sa ti o n in a g iv e n si tu a tion
n d d is a d v a n ta g e s of priv
• The adva n ta ge s a
e n si tu a ti on
o f nationa li sa ti o n in a g iv
n d d is a d v a n ta g e s
• The advanta g e s a
p lo yment
se e k to c o n tr o l: e m
n t m ig h t u se the law to
• How a go v e rn m e
h a n d sa fe ty ), w a g e le v e ls,
n d it io n s o f w o rk (i n c lu d ing healt
practices, co g o o ds a n d
d e c is io n s, p a rt ic ula r
b e h a v io u r, c o m p e ti ti o n , location
marketing
services
 POLITICAL AND LEGAL
o n b usi n e ss a n d b usi ne ss
a n ge s in p o litical and legal factors
• Th e im pa c t o f c h

decisions
 PRIVATISATION
e d a nd c on tr o ll e d b u si n e ss
n
the act of selling state-ow
• Privatisation is
se c to r. O R
rs in th e pri v a te
organisations to investo
w n e d in d u st ri e s in to the private
sf e rs o w n e rs h ip of state-o
• Privatisati on tr a n
nies.
g p u b li c li m it e d c o m p a
sector by creatin
c o m p a n ie s a re so ld through the
w ly fo rm e d p u b li c limited
• Shares in th e se n e

stock exchange.
 PRIVATISATION
is v e ry e xte n si ve a n d includes
se d c o m pa nie s in Europe
• The list o f p ri v a ti

British Airways,
a n d Sko da .
• De u tsc he Te le k o m

a ti sa ti o n is a c om p le x o ne.
• The debate over priv
e v e ry p o li ti cal.
• It has a lso b e c o m
 ENTS F OR PRIVATIS ATIO N
ARGUM
ie n c y th a n w he n a b u si ness is
ne ss e s le a d to g reater eff ic
si
• Private-se c tor b u
e d a n d su b si d ise d b y th e state.
support
n be sl ow a nd b u re a u c ra tic.
in st a te bodies ca
•D e c is io n-m a k in g
d e m p lo yees. This
r success to m a na g e rs a n
s re sp o n si b il it y fo
• Privatisation g iv e

is motivating.
 ENTS F OR PRIVATIS ATIO N
ARGUM
l be fo rc e d to c h a n g e or die;
te : fa il in g bu sinesses wil
e ra
• Market fo rc e s op
nd .
successful ones can expa
n a n c ia l re a so n s not poli tical
d e c isions are ta k e n fo r fi
ss
• Im p o rt a n t b u si n e
p ri c e s a rt if ic ia ll y low.
ping ele c tr ic it y
reasons, for example kee
ra is e fi na n c e fo r g o v e rn ment.
d in d u st ries can
• Sa le o f n a ti o n a li se
 ENTS F OR PRIVATIS ATIO N
ARGUM
p it a l m a rke ts a n d th is will
e a c c e ss to th e private c a
s wil l ha v
• Private businesse
ent
lead to increased investm
 S A GA INS T PRIVATIS ATIO N
ARGUMENT
d a s p ri v a te m o n o p o li e s if
d u st ri e s c o u ld b e operate
• Many stra te g ic in
m e rs w it h h ig h p rices.
exploit c o n su
privatised and they could
in to se v e ra l c o m p e ti n g units,
a li se d in d u st ri es, perhap s
n
• Breaking u p n a ti o
th ro u g h e c o n o m ie s o f sc ale.
th e o p p o rt u n it ie s fo r c o st saving
reduces
m a d e a c c ou n ta b le to th e country
n e rs h ip a n in d u st ry can be
• Through st a te o w
direct acc o u n ta b il it y to p a rl ia m e n t).
sp o n si b le m in is te r a n d
(thus having a re
 S A GA INS T PRIVATIS ATIO N
ARGUMENT
w it h e a c h o th e r a re u n li kely to
d b u si n e ss e s th at compete
• Privately op e ra te
cy for the b e n e fi t o f th e w h ole c o untry.
n t a n d c o ord in a te d p o li
achieve a cohere
st ri e s. T h e se d e c is io n s c an
k e d e c is io n s a b o ut e ss e ntial indu
• The state should ta h o ld e rs. This
t just the in te re st s o f sh a re
n e e d s o f so c ie ty a n d n o
be based on the n ie s w ould
a t p ri v a te c o m pa
e e pin g o p e n b u si n e ss a c tivities th
may involve k
consider unprofitable.
 NATIONALISATION
a te ly ow n e d b usi ne ss e s to state
e tr a n sf er of priv
• N a ti o na li sa ti o n th
m e n t) o w n e rs h ip a n d c ontrol.
(govern
a te ly o w ne d b u si n e ss e s to
a n d a g a in st th e st a te b u ying priv
• The arguments for ts for and
th e o pp osi te o f th e p o in
se th e m (i .e . n a ti o n a li sa tion) are
nationali
against privatization.
 NTS F OR NATIONA L IS ATIO N
ARGUME
c o n tr o l of m a jo r in d ust ries.
e
• The government will hav
p p ly ) sh o u ld n o w be p o ssible.
a l p o li c y (e .g . fo r water su
• Integrated in d u st ri
e x ploiting
g a s m o n o p o li e s a n d
c o m p a n ie s operatin
• It preve n ts p ri va te

consumers.
ll p ri v a te b usi n e ss e s in a n
b e a c h ie v e d b y merging a
le c a n
• Economies of sc a
o ne n a ti on a li se d c o rp o ration.
industry into
 S A GA INS T NATIONA L IS ATION
ARGUMENT
ra te th e in d u st ry e ff ic ie ntly,
t m oti v e , so le ss inc e n ti ve to ope
• There is less profi
ie s to loss m a k in g n a ti o nalised
g o v e rn m e n t m a y p ro v id e subsid
and the
industries.
e c isio n -m a k in g for poli tical
u si ne ss d
Government may inte rvene too much in b
•
reasons.
a n ie s c o u ld b e v e ry h ig h .
t of bu y ing p ri vate com p
v e rnm e n
• The cost to the g o
 S A GA INS T NATIONA L IS ATION
ARGUMENT
c e fr o m p ri v a te sou rc e s (e.g.
il it y o f th e in du st ry to ra ise finan
• It removes the ab
ge).
through the stock exchan
 POLITICAL AND LEGAL
c o n o m y a n d th e se la w s m ay
d uc e s la w s to g o v ern the e
• Governmen t in tr o
ctivities o f a b u si ne ss o rg a n iz a ti on.
constrain decisions and a
t in fo ll o w in g m a in w a y s:
• These laws impac d in g h e a lt h , sa fe ty a n d minimum
w o rk in g c o n d it ions (inclu
employm e n t a n d
wage)
io r a n d c o n su m er rights
 marketi ng b e h a v

competition
 POLITICAL AND LEGAL
t in fo ll owin g m a in ways:
• These laws im pa c

location decisions m adol

rv ic e s – e xa m ple Tra
particular goods & se
 S A ND C O ND ITIO NS O F W ORK
EMPLOYMENT PRACTICE
n e m p lo y e e s a n d e m p loye r a n d
ol th e re la ti on sh ip betwe e
• These la w s c o n tr
ll o w in g tw o m a in o b je c tives:
have fo
o rk e rs by p owe rf u l e m ployers
ation of w
 Pre v e n t e x p loit

e u se o f tr a de u n ion
Control ex c e ss iv
 NTRACTS AN D TE RMINAT ION
RUITME NT, EMP LO YME NT CO
RE C
y e e a n d e m p loy e r c le a rly
t m u st b e si g n e d b e tw e en emplo
• A written contra c
ns.
e s a n d w o rk ing c o n d it io
stating the wag
f w o rk in g (n o c hil d la b our)
• There are minimum age o

• Minimum Wage
x im um wo rk in g we ek
• Length of th e m a
 RACTS AND TE RMINAT ION
UITME NT, E MP LO YME NT CONT
EXTERNAL RECR
o n e n ti tl e m e nts (i f a n y)
• Holiday and pen si

a t th e wo rk pla c e
• No discrim ina ti o n
 AND UN FA IR D ISMISA AL
DISMISSAL
e d fi ri ng ) is the te rm in a tion of
• Dismissal (also call
e m p lo y e r a ga in st the w ill of the
employment by an
employee.
w h e n a n e m p loy e r fi re s an
rs
• An unfair dismissal occu
t v iola te e m plo y m e n t la w or
employee for reasons tha
t.
their employment contrac
 E S UNFAIR D ISMISSAL ?
WHAT CONSTITUT

• Maternity leave
on holidays
• Re fu sa l to w o rk

o f a u n ion
•B e in g a m e m b e r

dure etc
• In c o rr e c t proc e
U la b o ur la ws.
c y is banne d a c c o rd ing E
e sc a le re d u nd a n
• Redundancy - la rg
 HEALTH AND SAFETY LAWS
a nd p h y si c a l in ju ry a t w ork.
te c t w o rk e rs fr o m d is c omfort
• These aims to p ro
g a ll y b in d in g on
e n t to workers a n d it is le
e a sa fe e n v ir o n m
• It seeks to provid
an employer.
y re qu ir e b usi n e sses to:
• These laws usua ll

it h sa fe ty e q u ip m e n t
equip factori e s w

w a sh in g a n d to il e t fa cilities
provide adequ a te
 HE A LT H A ND S A F ET Y L AWS
y re q u ir e b usi n e ss e s to:
• These laws usu a ll

n fr om d a n g e ro u s m a c hinery
provide protecti o

a k s in w o rk to a v o id fa tigue
give adequate bre
te m p e ra tu re a t w o rk place
maintain cert a in

n ti h a ra ss m e n t p o li c ie s
clearly devised a
 THES E L AWS ON A BUS INESS
F
EVALUATING THE IMPACT O

• Increase in costs:
o f re c ru it m en t
Su p e rv is o ry c o st

n m in im u m w a g e w a s b eing paid
if less tha
 H ig h w a g e c o st

g iv in g p a id h olidays
Higher c o st fr o m

m o re sta ff to a v o id o vertime
Employment o f

ipment cost
 P ro te c tiv e eq u
 OF THES E L AWS ON A BUSINESS
EVALUATING THE IMPACT
ness:
• Benefits gained by a busi
o re se c u re a n d m ore v a luable
Workers will feel m
of accidents
 Re d u c e d ri sks

c o u rt c a se s a n d pe na lt ies
Avoid expensiv e
d m o re su it a b le e m p lo ye es
p lo y e e s- may fin
A tt ra c ti ve fo r e m
 OF THES E L AWS ON A BUSINESS
EVALUATING THE IMPACT
ness:
• Benefits gained by a busi
e l th e ir ri gh ts a re p ro te cted
rc e wh en they fe
M oti va te d wo rkfo
 N F ROM B USINE SS A C TIONS?
CONSUM ERS NE E D P ROTECTIO
WHY DO ss.
w e rl e ss a g a in st la rg e b u sine
e rs a re g e ne rally po
• Individ u a l c on su m
th e a d v e rt ise ments
e ra ti onal decis io n s w h e n
o nsu m e rs to m a k
• It is not easy for c

are so influential.
a c c ura c y o f the b usi n e ss claims
c ult fo r c o n su m e rs to a c cess the
• It is at times diffi
n ic a l p ro ducts.
e c ia ll y fo r te c h
about their products esp
 N F ROM B USINE SS AC TIONS?
CONSUM ERS NE E D P ROTECTIO
WHY DO d products
n g b u t c o n su m e rs m a y ne e
o rt e d g o od s is increa si
• The tr e nd o f im p
ty st andards
c a l sa fe ty a n d q u a li
according to their lo
le a d to b u si n e ss e x plo it ing their
ti ti o n in m a rk ets may
• Increa si n g c o m p e
c o m p e ti ti ve p ricing.
uali ty to h a v e
consumers by reducing q
 P L ES OF C ON S UM ER L AWS
EXAM

c t, 1 9 7 9 a n d 1 982:
• Sale of G oo d s A

n d se rv ic e s a re fi t to sell
That the g o o ds a
u g ht
fo r wh ic h th e y a re b o
a b le fo r th e purpose
Tha t th e y a re suit

in th e w a y d e sc ri b e d .
That they perfo rm
 P L ES OF C ON S UM ER L AWS
EXAM

1987:
• Consumer Protection Act,
d u c ts a re li a ble for th e cost of
d a n g e ro u s or de fective pro
e
Firms that p ro vid

d a m a g e th e y m a y c a use .
a ny
ote m is le a d in g p ri c e s.
It is illegal to q u
 ION L AWS ON B U SINESS ES
OTECT
IMPACT OF CONSUMER PR
e e t c o n su m e r p ro te c ti o n laws
y in c re a se in o rder to m
• Business c o st m a
t e tc . m ay b e
s and me a su re s o f w e igh
c o n tr o l st a n d a rd
• Improving q u a li ty

ss e n ti a l to a v o id le g a l a c tion
e
o n d to th e ir c o m p la in ts more
c on su m e rs fa ir ly and resp
• May have to tr e a t

u ic k ly to a v o id le g a l p ro ceedings.
q
 T EC TION L AWS ON B U SINESSES
O
IMPACT OF CONSUMER PR mer interest at
usi ne ss m a y h a v e to pu t consu
gy a nd c u lt ure as the b
• Chang e o f st ra te

the forefront.
a rd s a b u si ne ss wh e re their
c ust o m e rs wil l b e a tt ra cted tow
• On the other hand, more
ot fe e l c h e a te d o r e x plo ited.
k e n c a re of a n d they do n
intere st s a re ta

ta in c ust om e rs .
• M a y be e a sy to re
m ore pro fi ts su b se q ue ntly
a se in sa le s in the lo n g run and
lead to inc re
 All th is wo u ld
 A ND BU S INES S C O M PET ITION
LAWS
o n h a s foll owin g b e ne fi ts:
ompetiti
• It is usually argued that c
c o n su m ers
W id e r c h o ic e fo r

r consumers
 Lo w e r p ri c e fo

for consumers
B e tt e r q u a li ty

n c y a nd b e tt e r u se of resources
Productiv e e ff ic ie
 A ND BU S INES S C O M PET ITION
LAWS
o n h a s fo ll ow in g b e n e fi ts:
ued that competiti
• It is u su a ll y a rg
c o m p e titive in
may also m a k e a b u si n e ss
e e n lo c a l fi rm s
Competiti o n b e tw
v e n u e th ro u g h e x ports.
m a rke t b ri nging fore ig n re
inte rn a ti o n a l
 NC O URA GES C OM PET ITION?
HOW GOVERNMENT E
o u ra g e bu si n e ss c o m p e ti tion by
u nd th e wo rl d tr y to enc
• Governm e n ts a ro

making laws to:

lo pm e n t o f m o nopolies
Prevent th e d e v e

e pra c ti c e s b e twe e n fi rm s
Limit uncompetitiv
 MONOPOLY
su p p li e r in a n ind u st ry.
o n w h e re th e re is a sing le
a ti
• Monopoly is a si tu
g m o re th a n 25%
e fi n e d as a fi rm c o n tr oll in
o li c ie s this is re d
• For governmen t p

share in the market.

 D O M ON OPOL IES D EVELO P?
HOW

• Patent on new inventions

• Barriers to entry
• Integration
• Le g a l p ro te c ti on
 A F F EC TED BY M ONO POL IES?
HOW ARE CONSUMERS

to e c o no m ie s o f scale
• Lower p ri c e d ue
re ta in th a t p o si ti on in m arket
to
• Investment in new ideas

On the other Hand:

a y b e p o or quality
• High p ri c e a nd m

r c o nsu mers
•L im it e d c h o ic e fo
 A F F EC TED BY M ONO POL IES?
HOW ARE CONSUMERS

and:
On th e o the r H
c o m pe tition
eas as th e re is n o ri sk o f
e st m e nt on n e w id
• Limited or n o in v

sc a rc e re so urces
• Ineff ic ie n t u se o f
 IVE O R RE S T RIC TED PRA C TICES
UNCOMPETIT

ll a b ora ti n g to inte rv e n e with

e s b y p ro d u c e rs o ft e n th rough co
• These are practi c
as:
e s fo r th e ir b e n e fi t su c h
free market forc
ing
Pre d a to ry Pri c

Full line forcing

nd p ri c e fi x in g a g re ements
Market shari n g a
 IVE O R RE S T RIC TED PRA C TICES
UNCOMPETIT

ll a b o ra ti n g to inte rv e n e with
e s b y p ro d u c e rs o ft e n th rough co
• These are practi c
as:
e s fo r th e ir b e n e fi t su c h
free market forc
s a t su c h a lo w le ve l th a t
g - th e p ri c in g o f g o o d s or service
Predatory Pricin e d to le a v e th e market.
te and a re fo rc
other firms cannot compe
 IVE O R RE S T RIC TED PRA C TICES
UNCOMPETIT
a b ora ti n g to in te rv e n e w ith
b y p ro d u c e rs o ft e n th ro ugh coll
s
• These are practice as:
e s fo r th e ir b e n e fi t su c h
free market forc
h ic h th e su p p li e r o f g o o ds
A n a n ti c o m p e ti ti v e p ra ctice in w
Full line forcing - o n a d dit io na l ty p e s o f g oods or
e s re q uir e s th e p u rc h a se r to take
or servic h a se fr om
ssibly to a g re e n o t to p u rc
e sa m e su p p li e r, a n d p o
services from th
competitors.
 IVE O R RE S T RIC TED PRA C TICES
UNCOMPETIT

ll a b ora ti n g to in te rv e n e with
e s b y p ro d u c e rs o ft e n th rough co
• These are practi c
as:
e s fo r th e ir b e n e fi t su c h
free market forc
ts - a gre e p ri c e s w it h y o ur
n d p ri c e fi x in g a greemen
Market sh a ri n g a

competitors.
 D EM O GRA PH IC INF L U ENC ES
SOCIAL A ND
p h ic c ha ng e s, c a n in fl uence
e s in so c ie ty, in c lu d in g demogra
• Significant chan g
u c ts to supply.
h a s w h ic h p ro d
business decisions, suc
 RATE S OC IA L RES PO NS IBILITY
CORPO
ti o ns to a ll st a ke ho ld e rs ,
it s le ga l a nd m oral oblig a
a c c e pts
• When a business
g c o rp ora te so c ia l re sp o nsibility
in ve st ors , it is sa id to b e showin
not just
(CSR).
n e ss im p a c t o n soc ie ty and the
h th e d e c is io n s o f a bu si
• The wa ys in w h ic
h e th e r C SR is a k e y p ri ority
a re v e ry im p o rt a n t in d ic ators of w
environment
for that business.
 D A C C OU NTING P RA C TIC ES
CS R A N
in g p ro fi t fi g u re s th a t c o nvince
o n si b le to re p o rt mislead
• Is it soc ia ll y re sp
p o te n ti a l in v e st ment?
any is a g o o d
shareholders that a comp
e o f a b u si n e ss so th a t le nders are
o n si b le to in fl a te the valu
• Is it socia ll y re sp
s?
more willing to give loan
ts a p pe a r m o re fa v o u ra b le,
n d o th e r fo rm s o f m a k in g accoun
• These practices, a
nti n g w in d o w d re ss ing’
• are called ‘a c c o u
 D A C C OU NTING P RA C TIC ES
CS R A N
in g p ro fi t fi g u re s th a t c onvince
o n si b le to re p o rt mislead
• Is it soc ia ll y re sp
p ote n ti a l in v e st ment?
any is a g oo d
shareholders that a comp
e o f a b u si n e ss so th a t le nders are
on si b le to in fl a te the valu
• Is it socia ll y re sp
s?
more willing to give loan
 D A C C OU NTING P RA C TIC ES
CS R A N
n ts a p pe a r m ore fa v o u ra ble,
n d o th e r fo rm s o f m a k ing accou
• These practices, a
o u nti n g w in d o w d re ss in g’
are called ‘acc
p t to d is to rt th e p ro fi ta bility
v ie w is th a t a n y d e li b e rate attem
The widely held ing pictu re is so c ia ll y ir re sp o n si ble
m p a n y to giv e a m isle a d
or value of a co
law.
and should be against the
 NT O F IL L EGA L INC EN TIVES
CSR AND THE PAYME
e n ts ’ (b ri b e s) to d ir e c tors or
o n si b le to a w a rd ‘i n c e ntive paym
• Is it socially resp
is award e d to a p a rt ic u la r c o m p any?
n a ge rs so th a t a c o n tr a c t
purchasing ma
v e pa y m e n ts ’ to g o v e rn m e nt
o n si b le to a w a rd ‘incenti
• Is it socia ll y re sp
le g a l a c ti on fo r b reaking
s or to a v o id
officials to obtain subsidie
environmental laws?
 NT O F IL L EGA L INC EN TIVES
CSR AND THE PAYME
v e n t the se a n d othe r forms of
ave effective laws to pre
• Most countries h
‘incentive payments’.
re it is n o t n e c e ssa ri ly the best
to rt e d m a rk e tp lace, whe
• They lea d to a d is
o rst w ro ng d o e r w h o p a ys fines.
t th a t re c e iv e s a c o ntr a c t or the w
produc
 C S R A N D S OC IA L A UD ITING

a n n u a ll y o n h o w so c ia ll y
d e m a n d fo r b u si n e sse s to report
• There is growing
n.
responsible they have bee
o r lo ss e s, a n a n n u a l so cial
n n u a l a c c o u nts re p o rt on profits
• It is just like the a
usiness o ve r th e sa m e p e ri o d. It w ould
th e so c ia l im p a c t o f a b
report indicates
show.
 C S R A N D S OC IA L A UD ITING

o f st a k e h olde r in te re st s, or if
ro fi ts w e re m a d e a t th e expense
• For example, if p
s soc ia l re sp o n si bilities.
orts to m e e t it
the business made real eff
o rt s a re c a ll e d so c ia l a u dits.
• Annual social rep u c e su c h audits,
e nt for bu si n e ss e s to p ro d
a le g a l re q u ir e m
• It is not curr e n tl y

u t m a ny do so v o lu n ta ri ly.
b
 C S R A N D S OC IA L A UD ITING

e so c ia l a u dit s v o lun ta ri ly?

u c
• Why do businesses prod
 SOCIAL AUDIT

p a c t a b u si n e ss h a s o n society.
the im
• Social audit is a report on
clude:
• So c ia l a u d it in

Pollution levels fa ta lities)

b e r o f a c c id e nts a nd
ty re c o rd (e .g . the num
A healt h a n d sa fe
m m u n it y e v e n ts a n d c h a rities.
s to local co
 C o n n tr ibu ti on
 SOCIAL AUDIT

• Social audit include:

fi t sc he m e s
Em p lo y e e s b e n e
o f th e business’s
p li ers on the e th ic a l n a tu re
u st o m e rs a n d su p
Feedback fro m c

activities.
(e .g. Fa ir tr a de su pp li e rs ).
li e s fr o m e th ic al source s
f sup p
The proportion o
 S
BENEFITS OF SOCIAL AUDIT
n e ss is m e e ti n g – a n d wh at
a t so c ia l re sp on si bil it ie s the busi
• They identify wh
.
still needs to be achieved
t in so c ia l p e rf o rm a n c e by
ta rg e ts fo r im p ro vemen
• Managers c a n se t
rf o rm in g fi rm s in th e in dustry.
ri n g th e se a u dit s w it h th e best-pe
compa
w h ic h a c ts a s a u se fu l m arketing
o m p a n y ’s pu b li c image,
• They imp ro v e a c

tool to increase sales.

 T IO N S O F SO CIA L AU D IT S
LIMITA
s re qu ir e ti m e a n d m o n e y.
• Detailed social audit
it m a y no t b e ta k e n se ri ously by
t in de pe n d e n tl y c he c k e d ,
is n o
• If the social au dit

stakeholders.
whe th e r the b usi n e ss e s they
st in te re st e d in c h e a p g oods, not
• Some consumers are ju
so c ia ll y re sp o n si b le o r not.
buy from are
 N S ID E R C OM M UNIT Y NEEDS
WHY BUSINESSES CO
si b le w il l ta ke d e c ision s that
s to be soc ia ll y respon
• A busine ss tha t a im
w e ll a s it s sh a re holders.
com m u nit y a s
consider the needs of the
 T O M E ET T H E NE E D S O F T HE
BU S INE S S E S AT T E M PT ING
BENEFITS OF
COMMUNITY e to v
, m a k in g it m o re a tt ra c ti
c im a g e o f th e business
• Improve th e p u b li
.
c ia ll y a w a re c o n su m e rs
investors and so
pt b u si ne ss d e c isio n s such
th e c o m m u n it y will acc e
a n c e th a t
• Increasing the ch
n.
as expansion or relocatio
c e iv e su b si d ie s a n d g ra nts.
a n c e o f th e b u si ness to re
• Increasin g th e c h
 TO M E ET T H E N E ED S O F T H E
U S IN E S S E S AT T EM P T IN G
BENEFITS OF B
COMMUNITY

g ta k e n a g a in st the busi ness by

tive a c ti o n be in
• Reducing the risk of nega
pressure groups.
 RO L E OF PRES S URE GROU PS
THE
ple w it h a c o m m o n in te rest
a re o rg a n is a ti on s c re a te d by peo
• Pressure Groups
nd govern m e n ts to c h a n ge p o li c ie s so
p re ssu re o n b u si n e ss e s a
or aims to put
ed.
that an objective is reach

• They pressurize 3 groups:

p a ss la ws fo r th e ir aims.
Governm e n t: to
 RO L E OF PRES S URE GROU PS
THE

• They pressurize 3 groups:

p o li c ie s to b e c om e m o re ethical
change their
 Bu si ne sse s: to
usi n e ss e s with
a bits and m o ve to w a rd s b
g e the ir b u yin g h
Consumers: c h a n

social responsibility
 EGIES O F PRES S URE GRO UPS
STRAT

coverag e
• Publicity through media
m e r b e haviour
• Infl u e n c in g c o n su

overnment
• L o b b y in g o f g
 ION A L P RES S U RE GROU PS
BEST KNOWN INTERNAT
v ir on m e n ta l p ro te c ti o n by
fo r g re a te r fo r greater e n
p a ig n s
• Greenpeace – c a m
d govern m e n t p a ss in g ti g hte r la ws.
pti n g g re e n st ra te g ie s a n
businesses ado
a l fo r a g ri c u lt ura l p ro d u cers in
o n – a im s to a c h ie v e a better de
• Fairtrade founda ti

low-income countries.
y su p po rt s h um a n ri gh ts .
o n a l – rigorousl
•A m n e st y In te rn a ti
 ION A L P RES S U RE GROU PS
BEST KNOWN INTERNAT
to forc e gov e rn ment to take
courages demon st ra ti o n s
• Extinction rebellion – en
ange.
action against climate ch
 DEMOGRAPHIC CHANGES
re o f the p o pula ti o n c a n occur at:
size and structu
• C h a n g e s in th e
la ti on d u e to a large
in c re a se in the lo c a l p o p u
p le s in c lu d e a n
Local level: exa m
ilding of la rg e n e w h o u si n g e st a te s.
re ig n re fu g e e s o r th e b u
settlement of fo
d e c li n e in th e n a ti on a l b irth rate
a m ple s in c lu d e a n in c re ase or a
x
National level: e
a g e in g n a ti o na l p o p u la ti o n.
and an
 DEMOGRAPHIC CHANGES
re o f th e p o pula ti o n c a n occur at:
size and structu
• Ch a n g e s in the
w o rl d ’s p o p u la tion from
e p ro je cted grow th in th e
m p le s in c lu d e th
Global level: ex a
2100. T h e w o rl d p o pu la ti o n h a s doubled
in 20 2 0 to 1 1 b il li o n b y
almost 8 billion
since 1970.
 A N D D EM OGRA PHIC C HA NGES
RECENT GLOBAL SOCIAL
m a n y h ig h -i n c o m e c ou ntries
lation in
• a n a g e ing p o p u
m e nt a n d fi ll p osts
in c re a si n gly seek e m p lo y
f w o m e n , w h o
• the changing role o
f re sp o n si b il it y in in d u st ry
o
c re a si ng li te ra c y, le a d in g to more
f e d u c a ti o n fa c il it ies and in
• better prov is io n o

il le d a n d a d a p ta b le w o rkforces.
sk
 D D EM OGRA PHIC C HA NGES
RECENT GLOBAL SOCIAL AN
to m o re le isu re ti m e fo r a
h ig h -i n c o m e c o u n tr ie s, leading
t in many
• e a rl y re ti re m e n
e n si o ners
la ti v e ly w e a lt h y p
growing number of re
of si ng le -p e rs on h o u se holds
s, c re a ti n g in c re a si n g numbers
• rising divorce ra te
m p lo y e e s to a c c e pt
b a li sa ti o n, forcin g m o re e
n c a u se d b y g lo
• job insecurity, ofte a lt hough so m e w o rk e rs p re fe r th is option.
rt -t im e e m p lo y m e n t,
temporary and pa
 D D E M OG R A P HIC C H A N G E
A C T ON B U SINES S OF SOC IAL AN
IMP la ti o n is ri si n g.
e a ge o f the gp o p u
ti o n m e a n s th a t the avera
• An ageing po pula

ciated with:
• It is o ft e n a sso
ti o n o v e r th e a g e o f re ti rement.
rtion of the popula
 a la rg e r p ro p o
ti on b e lo w 2 5 y e a rs o f age.
io n o f th e popula
a sm a ll e r p ro p ort
h ig h e r ta x bu rd e n on the
so c ia l b e nefits, pu tt in g a
d e p e nd a n ts o n
a larger number of
working population.
 D D EM OG R A P HIC C HANG E
A C T ON B U SINES S OF SOC IAL AN
IMP
e n re sult from:
• Th e se c ha ng e s o ft

lower birth rates

n d lo ng e r li fe e x pe c ta n c y.
work a
 m o re wo m e n in
 T O N BUS IN ES S C HA NGES
IMPAC of
d e m a n d d if fe re n t ty pe s
s o f d e m an d - O ld e r c onsumers
• Changing pattern r c o n su m e rs .
h t b y y o u n g e
products from those boug
fr o m b u il d in g la rg e a p a rtments
p a n y m ig h t, fo r e x a m p le, switch
• A construction com l fa c il it ie s fo r th e e lderly.
sm a ll e r u n its with sp e c ia
for fa m il ie s to
in d e m a n d fo r p ro d uc ts as a
o rt a n t to fo re c a st change s
l b e im p
• Market research wil
c e o f a n a g e in g p o p u la ti on .
consequen
 T O N BUS IN ES S C HA NGES
IMPAC
the wor kforce.
• Ag e st r uc ture o f
le .
u n g e m plo y e e s a v a il a b
u c e d n um b ers of yo
• There m a y b e re d
isio n fo r e m plo yin g older
pla nn in g to in clude p ro v
ssary for w ork forc e
• It m a y be n e c e
longer than usual.
r ke e pin g e x is ti n g w o rk ers
workers or fo
tr a in in n e w te c h no lo gies.
b e m o re a d a pta b le a n d easier to
• Younger employees may
a n d h a ve ye a rs o f e x pe rience.
oft e n sa id to sh o w m o re loyalty
• Older workers are
 PATTERNS OF EMPLOYMENT
o f the so c ia l c o nst ra in ts on the
s of e m p lo ym e nt are one
• Changing p a tt e rn

activities of business.
o f p ro d u c ti on a nd p ro b a bly
e s, la b o u r is st il l a c ru c ial factor
• For many business
g re a te st si n g le e x p e nse .
the
ri e s, su c h a s c hil d c a re o r
tr ue in th e pe rs o n a l se rv ice indust
• This is particularly
homes for the elderly.
 T PA T TER N S IN M A N Y C O U NTRIES
AT UR ES OF C H A N G IN G E M PLOYMEN
MAIN FE
c h a s a uto m a te d m a c h ines,
p la c e d by c a pit a l e q u ipment su
• Labour is being re
e e c on omy.
n d a ry se c to r o f th
particularly in the seco
ri e s, su c h a s st e e l, to n e w hi-
in g fr o m o ld e st a b li sh e d indust
• Labour is transfe rr
s design.
su c h a s c o m p u te r- g a m e
tech industries,
m e n t is in c re a si ng.
• Part-time e m p loy
 PAT TER NS IN M A NY C OU N TRIES
R ES OF C H A NG ING E M PLO YMENT
MAIN FEAT U
id e r ra ng e of o c c u pa ti o ns is
o m e n in e m p loy m e n t a nd in a w
• The number of w
increasing.
a c ts a re inc re a si n g w h ic h can be
e x ib le e m p lo yment contr
• Tempora ry a n d fl
osts.
used to reduce the fixed c
g fr o m h o m e o r fl e x i- h ours
tt e rn s a re m o re c o m m o n . Workin
• Flexible work pa
r a n d e m ployee.
t bo th e m p lo y e
arrangements can benefi
 T P A T TER N S IN M A N Y C O U NTRIES
AT UR E S O F C H A N G IN G E M PLOYMEN
MAIN FE

c re a se s th e d e p e n de n c y ratio.
ulation in
• An a g e in g p o p
e r – fa m ilies are
ime emp lo y m e n t for lo n g
g to st a y in fu ll -t
• Women are te n d in
n a n d m a n y w om e n o nly have
m o re w o m e n d o n o t h a ve childre
smaller,
children later in life.
a n d th e n re turn to w o rk .
e m a te rn ity leave
•M ore w om e n ta k
 A N D D E M O G R A P H IC C H A N GE
S SIB LE O P P O R T U N IT IE S O F SOCIAL
PO
e th n ic g ro u p s o r a g e g ro ups.
n g fo r p ro d u c ts aimed a t
si
• Demand is in c re a
u se h o ld p roducts.
m and for h o u si n g a n d h o
in c re a se s th e d e
• Rising popu la ti o n
re a se c o n sum er
e , m iddleclass p e o p le in c
rs o f h ig h -i n c o m
• Increasing num b e
cts.
spending on luxury produ
r g re a te r fl e xib il it y o f o perations.
m e n t p a tt e rn s allow fo
• Part-tim e e m p lo y
 A ND D E M OG RA PHIC C H A NGE
IAL
POSSIBLE THREATS OF SOC s that are
e d a t a g e gro u p s o r so c ial group
fo r p ro ducts aim
•R e du c e d d e m a n d
g re la ti v e ly le ss im p o rt ant.
becomin
if th e re is a n a g e in g p o pulation.
our supply
• Sh o rt a g e o f la b
ia l b e n e fi ts.
people de p e nd e n t o n so c
n to p a y fo r m o re
• Increased ta x a ti o
rk ers.
it m o re p a rt -t im e w o
re w ork pa tt erns to su
• Need to re st ru c tu
y a l te am .
lt to b u il d in to a lo
rc e m a y b e m ore difficu
• Part-tim e w o rk fo
 ES ON BU S INES S A C TIVITIES
TECHNOLOGICAL INFLUENC
e s a n d sc ie nc e in a n ind ustrial
s th e u se o f too ls , machin
• Technology m e a n

context.
nd m a c hin e s, su c h a s d ri lls
n u si n g lo w -t e c h no lo g y tools a
Businesses have be e
•
f years.
and lathes, for hundreds o
a ll d e p a rt m e n ts w it h in the
g e is a ff e c ti n g a ll b u si n e sses and
• Technological chan
business.
 ES ON BU S INES S A C TIVITIES
TECHNOLOGICAL INFLUENC te,
e d th e wa y m ost bu si n esses opera
e lo p m e n ts ha ve tr ansform
• The se rec e n t d e v

including:
su m e rs d em an d
the p ro du c ts c o n

ucts are made

the wa y s p ro d

e s c o m m u nic a te
the wa y s b u si n e ss
t, st ore a nd u se informa tion.
e s c o ll e c
the ways business
 OF TEC HNO LO GIC A L C HA NGE
IMPACT ON BUSINESS

m n e w te c h n olo gy in c lude:
• Opportunities fr o
ro d u c ts.
m e r e le c tr o n ic s p
s in d e v e lo p in g n ew consu
New prod u c ts : a
d opted.
ti c s a re b e in g w id e ly a
a u to m a ti o n and robo
New pro c e sse s:
ti v it y.
he r le v e ls o f pro d u c
su lt in g fr o m much hig
Reduc e d c o st s: re
 OF TEC HNO LO GIC A L C HA NGE
IMPACT ON BUSINESS

m n e w te c h n olo gy in c lude:
• Opportunities fr o
f so c ia l media.
p le, from inc re a si n g u se o
a ti o ns: fo r e x a m
Better com m u n ic
fo r b u si ness
p roviding m u c h m o re d a ta
n: IT sy st e m s a re
More inform a ti o

decision-making.
 U SING NEW T EC HNOLO G Y
NT IA L T HR EATS TO B U S INESSES
POTE

• Costs:
b e su b st antial.
C a pit a l c o st s c a n
wit h fu rt h er
e ss ary and re c u r re g ula rl y
c o st s a re a ls o ne c
Labour train in g
nt.
technological developme
 U SING NEW T EC HNOLO G Y
NT IA L T HR EATS TO B U S INESSES
POTE
• Workforce relations: p la in e d a n d pre se n te d to
o lo gic a l c ha nge is not e x
amaged if th e te c h n
 Th e se c a n b e d
way.
fully justified
workers in a positive and
, re m a in in g w orkers ma y suffer
n g th e process o f c h a ng e
lo st d u ri
If many jo b s a re
dam a g e th e ir m o ti v a ti on le v e ls .
b se c u ri ty a n d th is c o u ld
from reduced jo
te c h n olo g ic a l c h a n ge if it risks.
an oppose
 Tra d e u n ion s c
 U SING NEW T EC HNOLO G Y
NT IA L T HR EATS TO B U S INESSES
POTE

• Reliability: sy st e m s c a n le a d to
o n o r in ventory-ha n d li ng
m a te d p ro du c ti
Breakdowns in auto
wh o le p roc e ss be ing h a lted.
the
e m s a n d the e x p e c te d g ains in
th in g pro b le m s w it h new syst
There may b e te e
d tha n fo re c ast.
er to be re a li se
efficiency may take long
 U SING NEW T EC HNOLO G Y
NT IA L T HR EATS TO B U S INESSES
POTE

• Data protection: y n a ti o nal laws

custome rs is c o n tr o ll e d b
d a ta o n st a ff a n d
The right to h o ld
ith these le g a l c o n st ra in ts o n it s use of
ne ss m u st k e e p up -t o -d ate w
and the bu si

IT.
 U SING NEW T EC HNOLO G Y
NT IA L T HR EATS TO B U S INESSES
POTE

• Management:
n o t w e lc om e ne w te c h n ology.
Some managers do of c h a n ge require
a nd managin g th e proc e ss
ne e d fo r c h a n g e
Recognising th e

good management skills.

 U SING NEW T EC HNOLO G Y
NT IA L T HR EATS TO B U S INESSES
POTE

• Competition: te c h n o lo gy more
ore innov a ti v e a n d a d op t
m ig h t b e e ve n m
Rival com p a n ie s
tiv e th a n b e fo re it in v e st e d in
v in g a b usi n e ss le ss c o m peti
rapidly, le a
technology.
 S INES S D EC ISION-M A KING
F ITS OF P R OV ID ING D ATA FOR BU
BENE
d e p a rt m e n ts a n d re g ion al
qu ic k ly a n d fr e q u e n tl y from all
obtain data
• M a n a g e rs c a n
e ra ll c o n trol.
, w h ic h a id s o v
divisions of the business
d a ta ra p id ly w hic h a ll ows
use d to a n a ly se a n d p ro cess the
• Computers can b e
is io n s q u ickly.
ta a n d ta k e d e c
managers to interpret da
m m u n ic a ti o n o f d e c is io ns to
rm a ti o n sy st e m s a c c e le rate the co
• Management info n ow.
n is a ti o n w h o n e e d to k
those in the orga
 R B U SINESS D EC ISION-M AKING
WB AC KS OF P R OV ID ING D ATA FO
DR A
a d to in fo rm a ti o n o v e rl oad. It
e rr in g d a ta e le c tr on ic a ll y can le
• The ease of transf o st im portant in fo rm a ti o n a n d th e a re a s of
to id e n ti fy the m
becomes more difficult
u si ne ss m o st in ne e d o f action.
the b
n a g e rs c o u ld re d u c e th e authority
fo rm a ti o n bri n g s to c e ntral ma
• The power that in
a n d m iddle ma n a g e rs . C e n tr a l c on tr ol c an
e n to w o rk te a m s
and empowerment giv
c h m e n t a nd m o ti v a ti o n levels.
o m e o p p re ss iv e , re d u c in g job enri
bec
 C ING T EC HNO LO GY E F F EC TIVELY
INTRODU
ro u g h whe n in tr o d u c ing or
n t st a g e s a b usi ne ss sh ould go th
• There are import a
op p o si ti o n to c hange:
duce in te rn a l
updating technology to re
, Ev a lu a te , Pla n a nd M onitor.
Analyse, Involve
 C ING T EC HNO LO GY E F F EC TIVELY
INTRODU
g y a n d th e w a y s it c a n make the
ti a l u se o f th e n e w technolo
• Analyse the po te n

business more effective.

ss in g th e p o te n ti a l b e n e fits and
a n d o th e r e m p lo y e e s in asse
• Involve mana g e rs
gy . B etter ide a s m a y c o m e fr o m w orkers
g th e n e w te c h n o lo
pitfalls of introducin h asing it.
rs re sp o n si b le fo r p u rc
se th e sy st e m th a n fr o m m a n a ge
who will u
 C ING T EC HNO LO GY E F F EC TIVELY
INTRODU
, a n d e x p e c te d e ff ic ie nc y
a v a il a ble , c om paring c ost
ren t sy st e m s
• Evaluate the diffe
d g e t a v a il a b le.
on si d e r th e b u
and productivity gains. C
c lu d in g e x te n si v e tr a in ing for all
d u c ti o n o f th e n e w sy stem, in
• Plan for the in tr o
m o n st ra ti o n s to a ll st a ff .
users and d e
. Is it g iv in g the e xp e c te d
o n a n d e ff e c ti v e n e ss o f the system
• Monitor the introducti im p ro v e p e rf o rm a n c e?
if n o t, w h a t c a n be done to
ben e fi ts a nd ,
 C OM P ET IT ORS A N D S UP PLIERS
INFLUENCE OF
m a rke t sha re , th e le ss m arket
tal
The greater the number of competitors and their to
•
we r in d iv id ua l b usi ne ss e s ha ve .
po
it h c o m p e ti to rs ’ p ri c e s, unless
in g h a ve to b e ta k e n in line w
• Decisions on p ri c
d u c t d iffe re n ti a ti o n is a chieved.
effective pro
fo r n e w b u si n e ss e s to join an
fe w c o m p e ti to rs , if it is easy
• Even if there a re
usi n e ss w il l be low.
er o f a n y o n e b
industry, the market pow
 C OM P ET IT ORS A N D S UP PLIERS
INFLUENCE OF
b u si n e ss c u st om e r is a b le to
e r o f su p p li e rs , th e le ss likely a
The smaller the num b
•
u e n c e pri c e s a n d c re d it terms.
infl
a c u st om e r b u si n e ss h a s an
p li e rs c o m p e ti n g w it h e ach other,
• If there are many sup in g lo n g e r credit
p p li es down a n d d e m a n d
fo rc in g p ri c e s o f su
excellent chance of
terms.
 TERN ATIO NA L IN F L UE NC ES
IN

n a l tr a d e w it h o th e r c o untries.
ternatio
• All countries engage in in
tr a d e m e a n th a t a n inc re asing
re se n te d b y in te rnationa l
p
• The opport u n it ie s
e d m a te ri a ls o r e x po rt their own
n o f b u si n e sse s e it h e r u se import
proportio
ts – o r, v e ry c o m m o n ly , both.
produc
 TIONA L T RA D E A ND ITS IM PACT
IMPORTANCE OF INTERNA
, p oli ti c a l a n d soc ia l li nks.
b u il d im p rov e d business
• It helps c ou n tr ie s

• Increased revenues
petition
• De c re a se d c om

t life-span
• L o ng e r p rod u c

tation
• E n h a nc e d re p u
 M INTERN ATIO NA L TRA D E
POTENTIAL RISKS FRO
ic fi rm s th a t c a n n o t c o m pete
o f o u tp ut a n d jo b s fr om domest
• There may be lo ss
v e ly wit h im p o rt e d g o o ds.
effecti
e r fa c to r le a din g to a loss of
e tw e e n c o u n tr ies or ano th
c on fl ic t b
• There could be a
imports.
w it h im p o rt s, to th o se in
a k in g g o o d s tha t c a n n o t compete
• The switch from m ng time.
d v a n ta g e , m a y ta ke a lo
e c o u ntr y ha s a * -- c om parative a
which th
 M INTE R NATIO NA L TR A DE
POTENTIAL RISKS FRO mpetition
le to su rv iv e a g a in st c o
b u si n e ss e s m a y fi n d it impossib
• Newly established ‘i n fa n t in d ustries’ fr o m g ro w in g d o m e st ic ally.
T h is p re v e n ts
from existing importers.
c o st p ri c e in o rd e r to e liminate
a y ‘d u m p ’ g o o d s at below
• Some imp o rt e rs m

om p e ti ti o n fr o m d o m e st ic firms.
c
(p ro d u c ts so ld a b roa d ) for
rt s e x c e e d s th e v a lu e o f exports
• If the value of impo lo ss o f fo re ig n e x c hange.
, th e n th is c o uld lead to a
se v e ra l y e a rs
 ION A L TRA D E A GREEM EN TS
IMPACT OF INTERNAT
de a gre e m e nts wh ic h h a ve led to
nal tr a
• There has been a series of internatio
n t re d uc ti o ns in p ro te c ti onism.
signific a
a re ta ri ff s, qu o ta s a n d voluntary
n fo rm s of tr a d e barriers
• The most c o m m o

export limits.
 N A L T RA D E IS D RIVEN BY
FREE INTERNATIO

ation (W TO):
• The World Trade Organiz
it te d to fr e e in g wo rl d tr ade from
of c o un tr ie s comm
Th is is m a d e u p
nts.
n s throu gh n e g o ti a te d a greeme
restrictio
 ATION A L T RA D E IS D RIVEN BY
FREE INTERN

• Free-trade blocs ho u t re st ri c ti o ns but

tr a d e with eac h oth e r w it
o un tr ie s a gre e to
• These groups of c
s in orde r to ga in c o m p e ti ti v e a d vantage
tr a d e b a rr ie rs on o th e r countrie
impose
against their imports.
the a st Asi a n Na ti o n s) a n d the
: ASE AN (Ass o c ia ti o n of Sou
• Examples inclu d e

European Union (EU).

 D INTERNATION A L TRA D E
BENEFITS OF INCREASE
n s, c o nsu m e rs h a v e a m uch
p ro d u c ts fr om other nati o
p u rc h a se
• By being able to
ho ic e o f g o o d s a n d se rv ices.
wider c
o n om y to inc re a se it s ra te of
ri a ls c a n a ll o w a d e ve lo ping ec
Imports of raw ma te
•
industrialisation.
d u st ri e s wh ic h e n c o u ra ge
om p e ti ti on fo r domestic in
c re a te s c
• Importing products
-d e si g n e d , hig h -q u a li ty goods.
make we ll
costs to be kept low and
 D INTERNATION A L TRA D E
BENEFITS OF INCREASE
fu rt h e r c ost a nd p ri c e b enefits.
le a d to e c on o m ie s of sc ale and
• Specialisation ca n
a de w it h in a c o untry.
e r th a n similar pro d u c ts m
d u c ts a re c he a p
• Some imported pro
un tr ie s tr a d in g to g e th e r should
rd s o f a ll c o n su m e rs in all co
• The living sta nd a

increase.
im p o rt p ro d u c ts the y m ake
in p ro du c ts th e y m a ke best and
• Countries can specialise ra ti v e a dv a nta ge .
ie s. This is ca ll e d c o m pa
a re d to o th e r c ou n tr
less efficiently comp
 GY IN INTERN AT IO NA L TRADE
THE ROLE OF TECHNOLO
n a n c e a rr a n g e m e nts n ee ded
p the fi
Blockchain – these te chnologies are speeding u
• c o st of tr a d e fi n a n ce .
a l tr a d e a n d reducin g th e
for in te rn a ti o n
n b e u se d to e st a b li sh the
c hin e le a rn in g – these c a
e a n d m a
• Artificial intelligenc tr a ff ic a t p orts
s, m anage sh ip a n d tr u c k
tr a d e sh ip p in g ro u te
most cost-effective n g u a g e in to other
se a rch queri e s fr o m o n e la
a n sl a te e -c o m m e rc e
efficiently, and tr
languages.
 GY IN INTERN AT IO NA L TRADE
THE ROLE OF TECHNOLO
se rv ic e pro v id e rs – e d u cators,
e se a re b ri n g in g togethe r
m s – th
• New digital platfor u stomers.
w it h p ote nti a l g lo ba l c
lope rs, a c c o u n ta n ts a n d others –
web deve
c h n o lo g ie s fo r m a k in g mobile
A p p le P a y, M -P e sa a n d other te
• Mobile payments – is p a rt ic u la rly true
b u y products o n li n e . T h is
li n g m o re p e o p le to
payments are enab b e e n w e a k.
n a l banking sy st e m s h a v e
u n tr ie s w h e re tr a d it io
in developing co
 B U SIN ES SE S AN D G O V ER N M EN T
HIP S B ET W E EN M U LTIN ATIONAL
THE RELATIONS
q u a rt e rs in o n e c o u n tr y but owns
u si n e ss e s h a s its head
• A mult ina ti o n a l b
ro d u c e g o o d s a n d se rv ic es.
m o re th a n o n e c o u n tr y , which p
operations in
e x c e e d in g th e si z e o f m any
a ls h a v e a n n u a l revenue s
a ti o n
• The biggest mu lt in
ies.
countries’ entire econom
n c e th e y h a v e , c a n le a d to many
a ti on a ls , a n d the influ e
• The siz e o f m u lt in
ts.
problems for governmen
 ES SE S AN D G O V ER N M E N T
ET W E EN M U LTIN ATIO N A L BUSIN
THE RELATIONSHIPS B
e st e rn E u ro p e a n c ou n tr ies or in
a ls h a v e th e ir h e a d o ff ices in W
• Many multinati o n
n g b a se s in less -d e ve lo p e d c o un tr ie s w ith
n y o f th e ir o p e ra ti
the USA, yet have ma
much smaller economies.
o f th e ir w o rk fo rc e s, oft en
to sa v e c o st s b y re d u c in g the size
• If the companies need e re th e h e a d o ff ic e s a re based.
tr ie s to lose jo b s a re th e ones wh
the last coun
 D D EM OG R A P HIC C HANG E
A C T ON B U SINES S OF SOC IAL AN
IMP a n sp ort
b e n e fi ts o f lo w e r tr
ss to th e ir m a in m a rk e ts , with the
• It brings the busine u t c o n su m er tastes.
fo rm a ti on a b o
costs and better market in
ro d u c in g in the lo c a l c o untry.
s a re a v oided by p
• Im p o rt re st ri c ti o n
th e ir b a se country.
m ig ht not b e a v a il a ble in
re so u rc e s w h ic h
• Access to natu ra l
re n ta l c o st s a nd
lt o f lower wa g e s, lo w e r
d u c ti o n a s a re su
• Lower costs of p ro
s.
k g o v e rn m e n t re st ri c ti o n
relatively wea
 OBL EM S F O R M ULT INATIONALS
POTENTIAL PR
h e a d q ua rt e rs m a y b e p o or.
h
• Communication links wit
m a k e c om m un ic a ti o n s difficult.
n d c u lt u re d if fe re nc e s could
• Language, leg a l a
il l b e c o m e m ore
th e m ultination a l gro u p w
h o th e r p la nts in
• Coordination w it

difficult.
y b e lo w, re qu ir ing subst antial
lo y e e s m a
• The sk ill levels of the local emp
gram mes.
investment in training pro
 ALS ON HOST COUNTRIES
THE IMPAC T OF MULTINAT ION
EVALUATION OF
ri n g s in fo re ig n e x c h a n ge.
d from the plant b
• O u tp u t e x p o rt e
m e s im prove the
a ted and tr a inin g p ro g ra m
o rt u nit ie s a re c re
• Employme n t o pp
sk ills.
n c y o f lo c a l p e o p le ’s
quality and efficie
a n d c o m p o n e nts , g e ne ra ting
fi t fr o m su p p ly in g services
• Local firms b e n e

dit ion a l jo b s a n d in c o m es.

a d
 ALS ON HOST COUNTRIES
THE IMPAC T OF MULTINAT ION
EVALUATION OF
p ro d u c ti v it y to in te rn a ti onal
e fo rc e d to im p ro v e q uality and
• Local firms will b
u lt in a ti o n a l, o r to su p p ly to it.
rd s, e it h e r to c om p e te w ith the m
standa
fi ts m a d e b y th e m u lt in ational.
b o o st e d from pro
•T a x re v e n ue s a re
ss do m e stic
increased , in c re a si n g g ro
f th e e c o n o m y is
• The total o u tp u t o

product.
 ALS ON HOST COUNTRIES
ION
DRAWBACKS OF MULTINAT
rc e m ig h t b e e x ploited.
• The loca l w o rk fo
owe d in other
ce more p o ll uti o n tha n a ll
nts m ig h t p ro d u
• Manufactu ri n g p la

countries.
o f b usi n e ss d ue to inferi or
rm s m a y be sque e z e d o u t
fi
• Lo c a l c om p e ti ng
th a n th e m u lt in a ti onal.
d m u c h sm a ller resou rc e s
e qu ip m e n t a n
 ALS ON HOST COUNTRIES
ION
DRAWBACKS OF MULTINAT
C o c a -C o la , h a v e b e e n a ccused
ne ss e s, suc h a s M c Do nald’s and
• Western-based busi dv e rt is in g a nd
c ieties by th e p o w e r o f a
e rn c u lt u re o n o th e r so
of imposing West
promotion.
e p a tr ia te d ) to the h o m e country.
(r
• Profits may be sent back
n b la m e d o n m ult in a ti o nals.
e d na tu ra l re so u rc e s has bee
• Depletion of li m it
 ENC ES ON BU S INES S A C TIVITY
ENVIRONMENTAL INFLU
c te d b y bu si ne ss a c ti v it y.
c a n b e g re atly affe
• Th e e nv ir o n m e n t
n e ss e xpa nsi on into
u fa c turing pro c e ss e s, b u si
u ti on fr o m m a n
• Air and noise p o ll
g lo b a l w a rm in g , a re im portant
s, e m is si on s o f g a se s th a t lead to
country area
environmental issues.
 CE B USINE SS B E HAVIOR?
IRONME NTA L ISSUE S INF L UEN
HOW DOES ENV
d u c e n e g a ti v e e n v ir o n m ental
fi t fr o m m a k in g de c is io ns that re
e
• Businesses can ben n g lo w-e n e rg y e qu ip m e nt.
c lu d in g: re d u c in g po ll u tion by usi
effects, in
n d p ro m o ti o n a l a d v a n ta ges which
iv e b u si n e ss e s m a rketing a
• These decis io n s g
la w s design e d to p ro te c t th e e n v ir on ment.
c h a n c e s o f b re a k ing
helps to reduce the
ti n g lo c a ls w il l b e a v o id e d.
u p th e e n v ir o n m e n t o r c ompensa
• The costs of cleaning
 CE B USINE SS B E HAVIOR?
IRONME NTA L ISSUE S INF L UEN
HOW DOES ENV
p le , g e ne ra ti n g e le c tr ic ity
na n c ia l b e n e fi ts. For exa m
-t e rm fi
• There could be long o st o n c e th e
l expenditu re bu t is lo w c
re q u ir e s h e a v y c a pit a
from solar panels c e s fo r o il a n d g as.
c o m p a re d with ri si n g p ri
fo r, e sp e c ia ll y
equipment has been paid
 LY F RIE ND LY D E C ISIONS
IN ST TA KING E NVIRONME NTAL
ARGUMENTS AGA
c is io n s c a n be v e ry c o st ly.
d e
• Environmentally friendly
h c a n b e in v e st e d in th e future.
uc e p ro fi ts. T h is li m it s h o w m uc
• Higher costs may red
im p ort a nt th a n prote c ti ng
e c o n o m ic g ro w th m a y be more
• In developing countries,
the environment.
e n t is w e a k a n d in sp ecti on
ro te c ti on of th e enviro n m
s, le g a l p
• In many countr ie
l c ho o se c he a p e r o pti o n s.
s a re in a d e q u a te . B usi n esses wil
system
 THINGS TO NOTE

ll e d g re e n w a sh in g , w h ic h often
g o r u n tr u e c la ims is ca
• Making m is le a d in

results in bad publicity.

it ie s a re ju st a tt e m pts to ge t
C S R e n vir o n m e ntal acti v
e st th a t
• Some critics sugg
o ls a n d re st ri c ti on s o n p owerful
m e nts to im p o se fe w e r legal contr
govern
multinational firms.
 ENVIRONMENTAL AUDITS

e a n s a n in d e p e n d e n t check.
• An audit simply m
ic h h a v e to be
h compa ny a c c o un ts , w h
n ly a sso c ia te d w it
• It is most c o m m o
a n d fa ir re cord.
d it o r a s a tr u e
verified by an external au
g a p p ro a c h to e v a lu a te their
h a v e b e e n u si n g th e auditin
• Some busin e ss e s

nv ir on m e n ta l p e rf o rm a n ce .
e
 ENVIRONMENTAL AUDITS
e a su re in m o n e ta ry te rm s and,
c tors a re o ft e n d iffi c ult to m
• Environmenta l fa
d e d in p ub li sh e d a c c o unts.
y d o n o t c u rr e n tl y h a v e to be inclu
legally, the
d it s sh o u ld b e c om e a le g al
a si n g ly d e m a n d in g tha t these au
• Stakeholders are incre
requirement.
ri son to b e m a d e b e twe e n the
l co m pa
l audits allow a meaningfu
• Environmenta
ne ss es.
c ts of diffe re nt bu si
environmental impa
 ENVIRONMENTAL AUDITS
s a n d p u b li sh th e re su lt s nearly
nd e rt a k e e n v ir o n m e ntal audit
• Businesses tha t u
l re cord – tha t is w h y th e y a re p u bli sh e d.
g o o d e n v ir o n m e n ta
always have a very
ir o nm e nta l re c ord a re u n likely to
po o r re p u ta ti o n o r poor env
• Businesses w it h a
m p u lsory.
le ss th e y b e c o m e c o
produce an audit un
 E EN VIRON M EN TAL A U D ITS
S
HOW DO STAKEHOLDERS U
p oll u ti o n a n d w a st e le v els,
n m e n ta l a u d it s to re po rt on their
• Businesses use enviro
tr a n spo rt u se , a n d re c yc ling rates.
energy and
om in g y e a r, th e n re p o rt their
a in a b il it y ta rg e ts for the c
t su st
• Managers may se
ne x t a n n u a l audit.
ta rg e ts in th e
performance against these
m e rs ’ p u rc h a si n g b e h a v iour.
u se th e a u d it s to in fl u e n ce consu
ups may
• Co n sum e r g ro
ld le a d to in c re a se d sa le s.
o n su m e r re a c ti o n to th e audit cou
Favourable c
 E EN VIRON M EN TAL A U D ITS
S
HOW DO STAKEHOLDERS U
it s to h e lp d e c id e wh e th er
e st o rs, wil l use these a ud
ularly e th ic a l inv
• Investors, partic
v e st in or le nd to th e c o mpany.
to in
c e ll e nt e n v ir o n m e nta l re cord
p ri d e in a b u si n e ss th a t ha s a n e x
• Employees often have a im o f re d u c ing
rk in g towards a c o m m o n
ro u g h a n a u dit . W o
and publicizes this th a g e rs to g e th er a s a
b ri ng employ e e s a n d m a n
m e n t c o uld h e lp to
harm to the environ
team
 N O F EN VIRO NM ENTAL A U DITS
EVALUATIO
y u n ti l e nv ir o n m e nta l a udits are
il l n o t ta k e th e m seriousl
• Some obse rv e rs w
w h a t th e y sh o u ld in clude.
greeme n t o n
compulsory and there is a
u b li c it y st u nt o r a sm o k escreen
e e n a c c use d o f u si n g th e m as a p
• Companies have b a ll y d a m a g in g p ra ctices.
ns and p o te n ti
to hide their true intentio
p ro d u c e a n d p u bli sh , a nd this
m e -c o n su m in g a n d e x p ensive to
• They can be very ti
th e ir v a lu e to sm a ll b u si nesses.
may limit
 IT Y A ND BU S INES S D EC IS IONS
SUSTAINABIL
a y in w h ic h c om pa nie s can
ie nd ly b u si ne ss de c isio ns is a w
• Taking environmentally fr
c o m m it m e n t to su st a in ability.
demonstrate the ir
a ss iste d by su st a in a ble business
nt li v in g st a n d ards can b e
e
• Enjoying th e c urr

decisions.
ne ss a c ti vit y be c om e s m ore
the e n v ir on m e nt m e a ns that busi
• Helping to protect
sustainable.
 IT Y A ND BU S INES S D EC IS IONS
SUSTAINABIL
n d g re e n c o n sum e ri sm a re
v e rnm e n t e n vir o n m e n ta l laws a
o
• Pressure-group activity, g
st a in a b le b u si n e ss d e c isions.
m o st b usi n e ss e s to ta k e more su
forcing
THANK YOU
 ND D EM OG R A P HIC C HANG E
PA C T ON B U SINES S OF SOCIAL A
IM

• Economic
 ND D EM OG R A P HIC C HANG E
PA C T ON B U SINES S OF SOCIAL A
IM

• Economic