1. F1 Political and legal factors affecting business

2. 1. Analyzing the business environment Global/Local General (Macro)/Task(Micro) PEST(Political and legal; Economic; Social and cultural; Technological and competitive)

3. 2. The political and legal environment Legal environment Some laws affect all companies while some only affect particular industries. The impact of government Government can directly affect the capacity expansion, demand, entry barriers and competition of industries.

4. 2. The political and legal environment Influencing the government a. Employ lobbyists b. Give political officers non-executive directorships c. Influence public opinion

5. 2. The political and legal environment Example question Which of the following cannot be adopted as a method to influence the government? A. Employ lobbyists B. Give political officers non-executive directorships C. Bribery D. Influence the pubic

6. 3. Employment protection law Retirement The organizations encourage retirement for a variety of reasons: a. Promotion opportunities for younger employees b. Early retirement is an alternative to redundancy c. Balance the age structure d. Reduce the pension costs

7. 3. Employment protection law Resignation The period of notice to leave should be set out in the contract of employment. Dismissal Wrongful dismissal --Breach the employment contract Unfair dismissal --Dismissal without good reason --Any dismissal is potentially unfair --The employer has to follow disciplinary procedures

8. 3. Employment protection law Example question Which of the following types of dismissal relates to the method of dismissal? A. Unfair dismissal B. Wrongful dismissal C. Forced dismissal

9. 3. Employment protection law Redundancy It is a dismissal under tow circumstances: a. The employer has ceased to carry on the business b. The requirement of the business for employees to carry out work has ceased

10. 3. Employment protection law Redundancy In following cases, an employee is not entitled to compensation: a. The employee unreasonably rejected the offer of an alternative employment by the employer. b. The employee is of pensionable age or over, or has less than two year’s continuous employment. c. The employee’s conduct merits dismissal without notice.

11. 3. Employment protection law Redundancy How to reduce the impact of redundancy? a. Retirement of staff over the retirement age b. Early retirement to staff approaching normal retirement age c. Restrictions on recruitment d. Dismissal of part-time or short-time contract staff e. Offering retraining within the company f. Seeking voluntary redundancies.

12. 3. Employment protection law Example question In which of the following case an employee id entitled to compensation from employers? A. Resignation of the employee B. Reject the new job provided by the employer when redundancy occurs C. Being employed for continuous 3 years when the employee accepted redundancy D. The employee id 65 years old which is over pension age.

13. 4. Data protection and security law The aims of data protection act a. Protect individual privacy b. Harmonize data protection legislation

14. 4. Data protection and security law Data protection principles aProcessed fairly and lawfully bObtained only for one or more specified and lawful purposes cAdequate, relevant and not exceeding the purposes why they are processed dAccurate and kept up to date eNot be kept longer than necessary fProcessed in accordance with the rights gMeasures against unauthorized proceeding hNot be transferred outside EU

15. 4. Data protection and security law The rights of data subjects a. Seeking compensation or suing for damages and any associated distress b. Applying to the courts to correct inaccurate data or even wiping off the data c. Obtain access to personal data of which he or she is the subject

16. 4. Data protection and security law Example question Which of the following is not the right of data subjects? A. Seeking compensation for damage B. Suing for associated distress C. Obtaining access to personal data of which his/her family is the subject D. Applying to the courts to correct inaccurate data or even wiping off the data

17. 5. Health safety law Importance of maintaining health and safety at work a. The employer has legal obligations. b. Accidents and illness cost employer money c. The company’s image may suffer.

18. 5. Health safety law Accident and safety policies An employee who is injured as a result of either employer’s failure to take reasonable care or a breach of statutory duty can sue.

19. 5. Health safety law How to reduce the impact of accidents a. Develop safety consciousness among staff. b. Develop effective consultative participation. c. Give adequate instruction in safety rules and measures. d. Materials handling should be minimized. e. Good maintenance f. Implement code of practice for the industry g. Safety inspections should be carried out regularly

20. 5. Health safety law Example question An employee who is injured due to his careless during work can not sue, is this statement true or false?

21. 6. Consumer protection law Contract law A contract is a legally binding agreement which means if one party fails to carry out the agreement, the other party can take legal action against him for breach of contract.

22. 6. Consumer protection law Sale of goods and services a. Delivered for a particular occasion or date b. The seller has a right to sell c. Correspond with contract description d. Reasonable quality and meet needs

23. F1 Social and demographic factors

24. 1. Population and the labor market The changing age structure of the labor force Reducing birth rates mean fewer young people which enhance the labor costs. Increasing participation of women

25. 2. Implications for employers a. Establish the labor market the organization is in b. Discover the catchment areas c. Identify the supply side trends d. Examine education trends e. Assess the demand from other employers f. Assess alternative sources

26. 3. Family life cycle It is a summary of demographic variables: a. It combines the effect of age, marital status, career status and the presence or absence of children. b. It is able to identify the various stages through which households progress.

27. 4. Social structures and class Definition The basic idea of class is that a society can be divided into broad strata which comprise individuals whose members share common features, such as type of occupation, income levels, education background and other variables.

28. 4. Social structures and class The methods to classify a. Access to power b. Inherited wealth c. Educational attainment d. Status or esteem e. Income

29. 4. Social structures and class Example question Which of the following method cannot be used to classify social classes? A. Income B. Educational attainments C. Number of children D. Esteem

30. 5. Buying patterns Behavioral determinants They encourage people to consume. They include the personality, culture, social class etc. Inhibitors They are factors which make the person less likely to purchase such as low income.

31. 6. Cultural trends Health and diet issues There have been significant changes in some countries in attitudes to diet and health. For example, an increase in vegetarianism which includes a concern with “organic food” is found in supermarkets.

32. 6. Cultural trends The impact on business a.Growing markets for sports-related goods. b.The employers are providing more facilities to service the employees. c.New foods such as organic foods will surface more often.

33. 6. Cultural trends Types of discrimination against women a. Overt discrimination One group is treated less favorably than another. b. Indirect discrimination It is harder for somebody of a particular group to fulfill requirements

34. 6. Cultural trends Example question Which of the following would be identified as a cultural trend? A. Health and safety legislation B. Concern with health and diet C. Data protection legislation D. Increasing age of population

35. F1 Technological Factors

36. 1.Organization structure Span of control Business automation and improved MIS have led to delayering and widened the span of control. Tall and flat organizations The improved information system has led to flat, decentralized organizations.

37. 2. Other effects of IT on organizations a. Routine processing b. Digital information and record keeping c. New skills required and new ways of working d. Reliance on IT e. New method of communication f. The view of information as a valuable resource

38. 3.Outsourcing Definition The contracting out of specified operations or services to an external vendor Type of outsourcing Ad-Hoc Outsource for a short-term requirement Project mgt Outsource a particular IT project Partial Outsource some IT service Total Outsource the vast majority of IT service

39. 3.Outsourcing Appraisals of outsourcing AdvantageDisadvantage Removing the uncertainty about cost Too important to be contracted out Bringing economies of scale High opportunity cost New skills and technology Missing competitive advantage FlexibilityIneffective management

40. 3. Outsourcing Example question Which of the following is not a disadvantage of outsourcing? A. An organization may find itself locked into an unsatisfactory contract. B. There is no onus upon internal management to keep up with new developments. C. Certain functions may be too important to be contracted out. D. There is often a long-term contract where services are specified for a fixed price.

41. F1. Environmental factors

42. 1. Impact on environment of economic activities Environmental footprint a. Depletion of natural resources b. Noise c. Residual air and water emissions d. Uncompensated health effects e. Change in the local quality of life

43. 2. Impact on organization of environmental costs Direct or indirect costs a. Waste management b. Compliance or remediation costs c. Environmental training d. Legal costs or fines e. Record keeping and reporting

44. 2. Impact on organization of environmental costs Contingent or intangible costs a. Uncertain future remediation costs b. Employee health and safety c. Sustainability of raw material assets d. Risk of impaired assets e. Public/customer perception

45. 3.Corporate social responsibility and risk management Deloitte’s nine-stage approach a. Understanding the present b. Envisioning the future c. Planning the journey d. Planning and building e. Execution f. Review and revision g. Reporting and communicating h. Assuring internally i. Assuring externally

46. F1 Competitive Factors

47. 1.SWOT analysis Internal appraisal Strengths and weaknesses External appraisal Opportunities and threats

48. 2. Porter’s five competitive forces The threat of new entrants The strength of threat is determined by: a. The strength of the barriers to entry b. The likely response of existing competitors to the new entrant

49. 2. Porter’s five competitive forces The threat from substitute products A substitute product is a good or service produced by anther industry which satisfies the same customer needs.

50. 2. Porter’s five competitive forces The bargaining power of customers How strong the position of customers depends on: a. How the customer buys b. How critical the product is to the customer’s own business c. Switching costs d. Whether the products are standard items or specialized e. The customer's own profitability f. The price-awareness of consumers

51. 2. Porter’s five competitive forces The bargaining power of suppliers How strong the position of suppliers depends on: a. The number and position of suppliers b. The extend that suppliers rely on the industry for sales c. The threat of new entrants to the suppliers industry d. The importance of the supplier’s product to the buyers e. Whether the supplier has a differentiated product which buyers need f. The switching cost of customers

52. 2. Porter’s five competitive forces The rivalry amongst current competitors The threat is determined by the number of competitors, the growth rate of industry and the relative strength amongst competitors.

53. 2. Porter’s five competitive forces Example question In Porter’s five forces model, which of the following would not constitute a “barrier to entry”? A. A scale of economy available to existing competitors B. High capital investment requirement C. Low switching cost in the market D. Loyalty to existing brands

54. 3. The value chain Primary activities Inbound logisticsReceiving, handling and storing inputs OperationsConvert inputs into products Outbound logisticsDelivery outputs to customers Marketing and salesInforming customer of the products, persuading them to buy After sales serviceInstalling, repairing, upgrading,providing spare parts

55. 3. The value chain Support activities ProcurementAcquire inputs to the primary activities Technology developmentProduct design, improving processes and resource utilization HR managementRecruiting, training, developing and rewarding people Firm infrastructureGeneral management, planning, finance, control and public affairs

56. 3. The value chain Value system Activities and linkages that add value do not stop at the organization boundaries. The value chain exists in suppliers, distributors, customers too which formulate a value system.

57. 3. The value chain Example question Which one of the following is a primary activity in the value chain? A. Technology department B. Procurement C. HR management D. Marketing and sales

58. The end