Study Notes
External factors are influences on business decisions that are beyond a company's control and can have both positive and negative impacts. These factors are categorized into social, technological, environmental, and political areas.
- Social factors — changes in society that affect business operations.
Example: Increased consumer awareness and changing demand patterns. - Technological factors — advancements in technology that influence business processes.
Example: Use of IT to reduce administrative costs. - Environmental factors — ecological and sustainability issues impacting businesses.
Example: Businesses using renewable energy sources. - Political factors — government actions and political events affecting businesses.
Example: The impact of BREXIT on business operations.
Exam Tips
Key Definitions to Remember
- Social factors
- Technological factors
- Environmental factors
- Political factors
Common Confusions
- Mixing up technological and social factors
- Confusing political factors with legal factors
Typical Exam Questions
- What are social factors?
Changes in society that affect business operations. - How do technological factors impact businesses?
They can reduce costs and improve communication. - What is sustainable development?
Meeting current needs without compromising future generations.
What Examiners Usually Test
- Understanding of different external factors
- Ability to provide examples of how each factor affects businesses
- Knowledge of sustainable development concepts