Areas affected by technological change are:

A) Communication
A rapidly increasing number that are linked into & using the Internet.
There are increasing problems & computer stress.

B) Product technology
It determines the nature & speed of production flow on the line, quality of the product.

C) Costs of production
It is complex & very expensive.

D) Human resources & technology
It has led to:
redundancies as technology has changed methods & replaced people.
increase employment those with computer-related skills.
some deskilling. E.g. Craft skills have been replaced in areas such as printing.
multi-skilling.
an increase in small businesses resulting from redundancies.
a shortage of skilled engineers & programmers.
an increasing acceptance of change as its speed & impact have accelerated.

E) Market & Technology
Effects On The Market are:
a) changing nature of products. E.g.: Computerized toys.
b) online shopping.
c) the price. E.g.: Plasma TV is getting more cheaper as new firms enter the market.
d) availability to compete. It is difficult for low-technology firms to compete.
e) the pattern of demand. new entertainment industry take up their time 7 their disposable income.
The younger consumer are more apparent this is.
f) distribution of finished products. The availability of getting the products. Reduced prices, reduce
damage in transit.
g) for some people, technology has led to higher disposable incomes.
h) changed the way people paid. E.g.: Pay using credit card.
i) create more leisure time.
j) health & medicines have changed.

Negative effects of technological change:
a) The need for data protection. Legislation change.
b) The need for computer use protection - It is offence to hack into computer or introduce a virus.
c) Unemployment results mainly from occupational & immobility & lowlevels of economic activity.
d) Unreliable systems can lead to poor customer service & bad reputation for the business.
e) Human to human relations has been reduced.
f) Managers must be computer literate. The management of change itself is a problem, where the
culture of the organisation is based on centralised authority.
g) Technological literacy is still a problem. This is overcome by training.
h) Markets become more competitive as the pace of change increases & assets become obsolescent
& need to be changed long before they have ceased to operate efficiently.

Legal constraints on business activity:
a) The law & employment practices.
b) The law & consumer rights.
c) The law & business competition.

A) The Law & Employment Practices
Government pass laws to control:
recruitment, employment contracts & termination of employment.
health & safety at work.
minimum wages.
trade union rights.

Unfair dismissal can be claimed if the employment contract is ended because of:
a) pregnancy.
b) refusal to work on holy day.
c) refusal to work on overtime.
d) being a member of trade union.
e) incorrect dismissal procedure being followed.
f) equip with safety equipment.
g) provide adequate toilet facilities.
h) provide protection from dangerous machinery.
i) give adequate breaks & maintain workplace temperatures.

The positive & negative impact on business of legal constraints on employment & health & safety.
These constraints will add to business costs.

These costs will include:
a) employing more staff to avoid long hours for existing workers.
b) protective clothing & equipment.
c) higher costs from giving paid holidays, pension & paid leave for sickness.
d) higher wage costs if the minimum wage is not being paid.
e) supervisory costs regarding a firms recruitment, selection & promotion. multi-nationals that
operate in countries with a few legal constraints will enjoy lower production costs.

Real benefits to be gained by businesses that exceed that minimum standards laid down by law.
a) Workers feel more secure, more satisfied & motivated workers. Workers will likely to work hard to
help business achieve its goal.
b) Reduce risks of accidents & time off work.
c) There is no heavy fines or expensive court cases.
d) Businesses can attract best employees & also receive good publicity.
e) The culture of the business might be to treat workers as partners in the business, equal in status.

B) The Law & Consumer Rights
Reasons why government take legal actions to protect consumers of goods & services from unfair
business activity:
a) An individual consumer cannot make good decisions when the power of advertising so influential.
b) It is difficult for consumer to understand how the products are made.
c) Consumers have to paying off debts for many years at high interest rates if not studied carefully.
d) Consumers need protection from producers which adopt different quality products.
e) Firms take advantages of consumers by reducing qualities, service, guarantee periods so in order
to offer a lower prices.

Laws are introduced to protect consumer.
Impact of consumer protection laws on business.
a) It can be expensive when redesigning products & advertisements to give clears information.
b) Require a change of strategy & culture in the organisation.
c) Improving quality control standards to reduce he danger of legal action.
d) Reduce risk of court action by treating consumer fairly.
e) Real & long lasting profit gain if a business is not only meet the minimum standards of protection
laid down by a law.

C) The Law & Business Competition
Free & fair competition between businesses has benefits for consumers. E.g. are:
a) Wider of choices of goods & services.
b) Low prices.
c) Businesses will compete by improving the quality, style, performance of the product.
Competition within one country will have external benefits & these firms much more able to compete
efficiently with foreign firms & this also strengthen the domestic economy.
Government encourage competition between by passing laws which:
a) control monopolies & make it possible to prevent mergers.
b) limit or outlaw uncompetitive practices between firms.

Monopoly is control of supply of a product or service to a particular market.
Monopolist is a person who have the power to control a price.

Monopolies develop? How?
By invention of new products & processes that are then legally patented to give the originator the
monopoly of production.
By meaning merging or taking over other firms.
By legal protection.
The privatisation of state monopolies.
The existence of barriers to entry into an industry such as huge costs of building facilities. These
barriers will prevent or the start up new competitors.

Consumers affected by monopolies? How?
Benefits:
a) Lower prices if a large-scale production by a monopolist reduces average costs of production.
b) Increase expenditure on new products as the monopolist will be able to protect their position.

Drawbacks:
a) Higher prices when there is no competition.
b) Limited choice of products.
c) Less investment in new products.
d) no incentive to lower costs & improve efficiency.

Uncompetitive or restrictive practices
a) Refusal to supply a retailer.
b) Full line forcing - Producer forces a retailer to stock the whole range of products from the
manufacturer. If retailer refuses then even the popular items will not be supplied.
c) Market sharing agreement - Agree to share new business between the firms so that they do not
compete with each other to drive prices down.
d) Firm tries to stop new competitors by changing very low prices. This is called predatory pricing.

Social influences on business activity. The changes include:
a) an ageing population.
b) changing role of women - Not just to look after children but to seek employment.
c) early retirement is leading to more leisure time for a high-income pensioners.
d) rising diverse rates.
e) job insecurity.

How do changes impact on business strategy & decision?
a) An ageing population. Average age of the population is rising.
Changing patterns of demand as greater numbers of aged consumers demand different types of
goods than teenagers.
Age structure of the workforce may change. Younger employee are more adaptable & easier to train
in new technology whereas older workers show more loyalty & will have years of experience which
could improve customer service.

Changing Patterns Of Employment are one of the social constraints on the activities of business.
A) The main features of changing patterns in most countries are:
Industries labour is being replaced by capital. Output can rise due to increasing productivity yet total
employment often fall.
Transfer of labour from old industries to the new hi-tech industries.
An increase in part-time employment.
An increase in student employment on a part-time basis.
Flexible hours.
Increase the working age to reduce burden on the health service, pensions & the care industries.
More women seek full-time employment.
More people work more than 48 hours a week.

Effects of the changes in the pattern of employment on business.
a) Part-time workers can offer a firm much greater flexibility by being available at peak times. Help to
keep down overhead expenses.
b) Temporary staff may not contribute any new ideas.
c) Firms can benefit from a wider choice of staff & improved motivation amongst women workers.
d) Increase costs of maternity leave & of providing staff.

Environment Constraints On Business Activity
Ethnics are the moral guidelines that determine decision making.
Most decisions have an ethical or moral dimension.
An ethical code is a formal business document that lays down the rules that managers & other
employees should adopt when faced with a decision or a dilemmas.
The impact a businesss operation has on the environment is a very important aspect of its ethical
position.
The environment can be greatly affected by business activity

Arguments FOR adopting business strategies which are environmentally sound:
a) Businesses that reduce pollution by using latest recycled or green equipment can have real
marketing & promotional advantage.
Companies that damage the environment can suffer adverse consumer reaction. This adverse
reaction caused by extensive pressure group activity.
b) Law-polluting production will reduce the chances of businesses breaking laws. They can avoid bad
publicity & court fines.
c) Businesses that switch to an environmentally friendly strategy often report an improvement in the
number & quality of applications they receive from potential employees.
d) Long-term financial benefits. E.g.: Generating electricity by using solar panels would gain
substantial cost savings if the cost of energy generated by oil & gas increases. There is also no
external costs.

Argument AGAINST adopting business strategies which are environmentally sound:
a) Marketing advantage from keeping costs as low as possible. Society benefit from cheaper goods
produced.
b) Profits will be reduced if the latest methods of production is purchased.
c) Many countries legal protection of the environment is weak. As a result, be little risk of legal action
or heavy fines against business activity.
d) Developing countries it is argued that economic development is more important than protecting
the environment.

Pressure groups is an organisations with a common interest who put pressure on businesses &
government to change policies so that the objective is reached.

The pressure groups want changes to be made in 3 areas:
a) government to change their policies & to pass laws supporting the aims of the group.
b) businesses to change policies.
c) consumers to change their purchasing habits.

Pressure groups try to achieve these goals in a number of ways:
a) by using media coverage.
b) influencing consumer behavior such as by boycotting the particular product.
c) put arguments to government members or minister.

Environmental audits is an investigate process to determine if an existing facility is in compliance with
applicable environmental laws & regulations.
An environmental audit would check the pollution levels, wastage levels & recycling rates of the
business & compare them with previous years.
These audits are entirely voluntary.

Ethical Issues
a) The environment - The law prevents businesses from polluting or destroying the environment.
Business must decide whether to adopt even more stringent measures to protect the environment.
b) Animal rights - Some companies such as Cosmetics Manufacturer might use animals to test
products. They can destroy habitats & endanger animals.
c) Workers in the Third World - Some companies have been criticised for exploiting workers & reduce
costs of the workers.
d) Corruption - E.g.: Bribes might be used to persuade customers to sign contracts.
e) New technologies
f) Product availability - If a poor family cannot afford an expensive cars, most would not see this as an
ethical issues. But, if an Aids sufferer in South Africa cannot affords drug for treatment.
g) Trading issues - Some countries have been condemned internationally for the policies pursued by
their government.

Ethics is about morality & doing What Is Right & not What Is Wrong./The values & beliefs
which influence how individuals, groups & societies behave.

Acting ethically when not required to do so by the law can have a negative impact on profit in two
ways.
a) It can raise costs. E.g.: Paying higher wages than is necessary to Third World worker could lead to
increase in costs.
b) It can reduce revenues. A business might lose a contract if it refuses to give a bride.

In the other hand, it can produce benefits:
a) Companies can increase their sales by having a strong ethical stance.
b) Reduce the chance of breaking the law !" $%% & '&(( )* $&(%$+