The document discusses the key stakeholders that influence businesses and the external factors that impact businesses. The main stakeholders mentioned are owners/shareholders, customers, managers, government, employees, and community. It also outlines some of the main external factors, or PESTEC analysis, that affect businesses, including political, economic, social, technological, environmental, and competitive factors. It provides examples of each type of factor and how they can influence business operations and success.

1. 1.2 Influences on Business
N5 Business Management

2. TASK

Question Bank

1-4

3. Stakeholders
Stakeholders are people with a key
interest in a business
 The main ones in business are:

•Owners/Shareholders
•Customers
•Managers
•Government
•Employees
•Community

5. Owners and Shareholders
•
The number of owners and the roles they
carry out differ according to the size of the
firm
•
In small businesses there may be only one
owner (sole trader) or perhaps a small
number of partners (partnership)
•
In large firms there are often thousands of
shareholders, who each own a small part of
the business

6. Managers
Organise
 Make decisions
 Hire and fire
 Plan ahead
 Command & control
 Accountable to the owner(s)


7. Employees
A business needs staff or employees
to carry out its activities
 Employees agree to work a certain
number of hours in return for a wage
or salary
 Pay levels vary with skills,
qualifications, age, location, types of
work and industry and other factors


8. Customers
•
•
•
Customers buy the goods or services
produced by firms
They may be individuals or other
businesses
Firms must understand and meet the
needs of their customers, otherwise
they will fail to make a profit or,
indeed, survive

9. Suppliers
Firms get the resources they need to
produce goods and services from
suppliers
 Businesses should have effective
relationships with their suppliers in
order to get quality resources at
reasonable prices
 This is a two-way process, as
suppliers depend on the firms they
supply


10. Community
Firms and the communities they exist
in are also in a two-way relationship
 The local community may often
provide many of the firm’s staff and
customers
 The business often supplies goods
and services vital to the local area
 But at times the community can feel
aggrieved by some aspects of what a
firm does


11. Government
• Economic policies affect firms’ costs
(through taxation and interest rates)
• Legislation regulates what business can
do in areas such as the environment
and occupational safety and health
• Successful firms are good for
governments as they create wealth and
employment

12. TASK

Question Bank

1-10
Debate
 The school is to be knocked down and a new
hospital is to be built here. Pupils will relocate to
Blantyre.


You will be assigned different Stakeholder roles to
debate this for/against whether it is good for the
town.

13. Internal Factors
Finance
Labour
Technology

14. TASK

Question Bank

11-21

In Groups
Create a charter (set of rules) for working
conditions that you agree are acceptable for
people aged 16-18.


15. External Factors
Political
Economic
Social
Technological
PESTEC
Environmental
Competitive

16. Political Factors

Legislation

Tax

Trade barriers & Tariffs

17. Economic Factors

Inflation

Unemployment

State of Economy (Boom v
Recession)

Exchange Rates

18. TASK

Question Bank

22-36


Go Further
Find 5 laws in the UK that affect a business
and say why.




Go Further
What does GDP mean?
How is it calculated?
What is the Exchange Rate?

19. Social Factors

Demographic changes

Tastes & Trends

20. Technological Factors

Communication & Connectivity

Smart phones & Tablets

Automation

21. Technology (EXTERNAL)
Some Recent Technological
Innovations:

Google’s Driverless Cars

China’s 3D Express Coach

Indoor Clouds

3D Printers

Google’s Project Glass

Apple TV

Asimo

Electric Cars

22. TASK

Question Bank
37-43
 Go Further
 Polish is now the 2nd most spoken
language in the UK. What products
would you target to the Poles?


23. Environmental Factors

Bad or unseasonal weather

Extreme weather

Natural disasters

Recycling

Green issues

24. Competitive Factors
New products/services
 Price wars
 Aggressive advertising
 BOGOF
 Sponsorship
 Better customer service


25. TASK

Question Bank

44-54
Go Further
Who are the G8?
What is the Earth Summit?
What is the Kyoto Agreement?








Go Further
What is a Price War?
What is a Loss Leader?
What are the features of the Copyright, Designs & Patents
Act

26. ICT Presentation

Prepare a revision presentation on
External Environmental Factors (PESTEC)
Include a Title Slide
 Political Factors
 Economic Factors
 Social Factors
 Technological Factors
 Environmental Factors
 Competitive Factors


27. TASK

Question Bank

55-59