Principles of Business for CSEC®

2nd edition

Answers to Chapter 10: Technology and the global

business environment
“Setting the scene” answers
1. ICT is technology that provides access to information through telecommunications.
People and businesses are able to interact with the world of information through devices,
applications and systems that are networked together to share communications.
2. Examples could include:
A cellphone used by a student for interacting with home and with friends, and to access
information sources. Businesses use cellphones so that employees can communicate
with colleagues and their offices when they are working away from the business base. The
cellphone enables employees to access company records and other information sources.
A laptop computer which a student uses for recreational purposes and to carry out study
tasks including writing assignments. Businesses use a range of computers including laptops
to process work tasks and as a communication device. Company personnel are often linked
to a company intranet that contains company databases and other sources of information
that can be shared.
A word processing package which a student uses to process and modify school-based
assignments. Most company documents today are generated using word processing
packages such as Microsoft Word. Billions of pages of company documents will be generated
using Word every day of the year. The documents will then be shared through e-mail and by
storing the documents on electronic storage systems.
3. The figures for Antigua and Barbuda are high compared to many countries in the world.
On a world scale the International Telecommunications Union estimated that 48% of
the world’s population are Internet users. The figure for the United States was about 77%.
Japan recorded a figure of 92%. Jamaica recorded a figure of 45% and Trinidad and
Tobago a figure of 73%.
4. The government of Antigua and Barbuda had the vision to see that advanced ICT gives
a country a competitive advantage because efficient ICT systems help to make business
more cost effective. They also lead to advances in social services such as education and
healthcare. ICT helps to keep citizens informed of developments in the world and in their
community. There are many tourism businesses in Antigua and Barbuda who will benefit
from ICT showcasing how attractive the country is and how well prepared it is to cater for
tourists.
5. Examples of industries that benefit from ICT include bottling plants in Jamaica and gas and
oil processing plants in Guyana and Trinidad and Tobago, where ICT is used to manage the
flow of products and to check on quality standards. Large supermarkets in all countries use
Electronic Point of Sale technology to manage stock and re-order new stock.

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6. Large numbers of people benefit from using ICT, e.g. to find information for school study, to
access information about medical conditions, to access news media, etc. Medical staff in
hospitals are able to carry around electronic devices which signal that their urgent attention
is required to deal with medical emergencies. The police force while on patrol are able to
keep in contact with each other and with headquarters. People are able to keep in contact
with relatives abroad, e.g. through Skype, Facebook and other networking applications and
sites. They can benefit from goods that are produced to higher specifications as a result of
computer aided design and computer aided manufacturing.
7. There are a number of negative impacts of the use of ICT by business including:
• exposure to unwanted advertising when browsing the Internet
• companies holding personal details about users (although there is legislation governing
this)
• the need to recycle discarded computers and any harmful ingredients that they may
contain
• unscrupulous businesses (and individuals) using the Internet to contact and scam
people.

“Now try these” answers

10.1 Explain the concept of business technology
1. A small firm would benefit from business technology because it would help achieve
economic and organisational goals. This in turn would help to make the business more
profitable.
2. Business technology may help because the firm could track the goods through a digital
tracking system. It could send tracking documents digitally instead of using the post.
3. Business in action: This will be unique for each student.

10.2 Explain the role of information and communications

technology (ICT) in business
1. A school would need to keep records like contact information for parents, grades and scores
for students, register details, etc. This data could be stored in filing cabinets or centrally on
a digital database. Data may need to be retrieved if parents need to be notified, or if grade
scores need to be analysed or updated.
2. A wholesaler may need records on the number of products it has in a warehouse, the cost of
these products, where each product is located, the deliveries coming in and going out, etc.
This information could be input into an Excel spreadsheet or Microsoft Access and stored as a
database.
3. ICT might help a bank’s customers by making it easier to deposit and withdraw funds,
making it easier to access other bank services without having to visit a bank, and allowing
online access to bank accounts and services.
4. The development of a website helps a business to create more sales because potential
customers can browse products and make purchases from the comfort of their own homes.
5. Business in action: This will be unique for each student.

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10.3 Describe the types of ICT used in business

1. (a) Microsoft Access or Microsoft Excel
(b) Microsoft PowerPoint
(c) Microsoft Excel
(d) A management information system
(e) Adobe Photoshop
2. Computer-aided design can enhance the design of products by using various interface
tools to draw accurate designs. The designs can easily be modified and shared with people
in different locations around the globe. CAD can also be linked to CAM to help with the
transition to actually creating the product.
3. The Internet enables businesses to buy and sell virtually anything online. It also allows
them to reach a potentially massive amount of people when marketing and promoting the
business and the products.
4. Business in action: This will be unique for each student.

10.4 Distinguish between e-commerce and e-business

1. Inward-facing ICT helps the business internally (e.g. it helps employees, managers, etc.).
Outward-facing ICT helps business externally (e.g. it helps with customers, suppliers, etc.).
2. E-commerce covers outward-facing processes that touch customers, suppliers and external
partners (such as sales, marketing, delivery and customer service). E-business includes
e-commerce as well as internal processes such as production, inventory management,
product development and risk management.
3. E-commerce enables a business to be more effective as an e-business because it allows the
business to get closer to customers and what they need. It also helps to bring all parts of the
business together and creates a clear link with external suppliers.
4. Business in action: This will be unique for each student.

10.5 Identify ways in which ICT can be used to improve

the efficiency of business operations
1. ICT might help an airline business as customer records can be accessed easily to help with
the check-in process. Documents such as terms and conditions can be sent to multiple
people using group email. ICT can also help the airline business to find out what customers
want, to help provide better services and products.
2. GPS means that drivers do not need to memorise routes and can instead rely on ICT. GPS will
also be able to update them on live traffic reports. ICT means that customers can book rides
more easily, which means the company can potentially earn more.
3. A business will be able to be more organised and make more profit using ICT. This may not
always be true, but if the correct ICT systems are used in the correct way, it should help a
business to become more efficient.
4. Business in action: This will be unique for each student.

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10.6 Discuss the ethical implications of the use of ICT in business

1. Three key issues arising from the use of ICT by business are security, privacy and intellectual
property infringement.
2. Businesses may not put in place the correct security measures to protect information. They
may be willing to share private information with other businesses even if they do not have
permission to do so. Businesses may also infringe on intellectual property and not pay the
owners their dues.
3. Intellectual property is owned by the person or business that created the material. Other
individuals or organisations may threaten or steal this property if they use it without
permission. An individual or business could sue whoever has infringed their intellectual
property rights.
4. Business in action: This will be unique for each student.

10.7 Outline the factors that determine a country’s standard of

living and its quality of life
1. Measuring the standard of living is usually done by measuring how “developed” a country is
and therefore how well off its citizens are. This therefore refers to how much income people
earn and how much spending they do. In contrast, measuring quality of life is usually done
by looking at access to goods and services, and it focuses on whether individuals have what
they value. It is much harder to measure.
2. Standard of living may rise if a government opens up a new factory where people can gain
employment with a better salary. However, quality of life may fall due to the pollution
experienced from this factory.
3. HDIs are goals created by the United Nations for increasing quality of life. These indicators
tell us how close a country is to achieving quality of life for its citizens.
4. Business in action: This will be unique for each student.

10.8 Explain national income and its variations: gross national

product, gross domestic product, per capita income
1. These tell us that the standard of living and quality of life rose up to 2016 but then fell in
2017. To better assess these changes, it would be good to know about the changes in the
economy during this time.
2. The standard of living in a country may increase rapidly with the setting up of new businesses
that lead to more jobs and higher salaries. However, the quality of life for many people might
fall at the same time due to more congested roads (with workers trying to get to these new
businesses), and more pollution from the factories that have been set up.
3. Falling levels of infant mortality may suggest that the nutrition and health of the population
has increased. This would also suggest that people have the potential to live longer
because their health has improved. This may be achieved by improving healthcare services,
increasing awareness for the importance of a healthy lifestyle, etc.
4. Business in action: This will be unique for each student.

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10.9 Describe the role of education in economic growth

and development
1. Improved education is likely to lead to the improved economic performance of a country
by helping people to get better jobs that require greater skills and knowledge. As people
become more skilful and knowledgeable, they are able to help firms to produce more output.
2. Educational opportunity can lead to both an increase in the standard of living and quality of
life because people have more potential to get good jobs with good salaries. Education can
also help to improve quality of life by making people more aware of the importance of things
like looking after the environment, cutting down on pollution, etc.
3. Indicators such as how many years children spend in school and how many people go on to
tertiary education can be used to measure the educational development of a country.
4. Business in action: This will be unique for each student.

10.10 Outline the reasons for international trade

1. A country might import goods that it can produce itself if they are cheaper to import than to
produce. The country may also not have the land or resources needed to produce enough of
the goods required for the whole population.
2. A country sometimes has to import raw materials and finished products that it cannot
produce itself because there is still a need for these in the country, such as a need for sugar in
countries where it does not grow.
3. It is important for countries to export goods and services so that international trade can be
expanded.
4. Business in action: This will be unique for each student.

10.11 Identify the functions of major economic institutions

and systems
1. Three organisations that provide finance for Caribbean nations: CDB, IBRD and the World
Bank. Three institutions designed to encourage trade between Caribbean nations: CSME,
MIGA and ICSID. Two organisations designed to encourage political collaboration between
the Caribbean and other nations: CARICOM and WTO.
2. A Caribbean nation would seek support from the World Bank and the IMF if it wanted
to borrow money during a financial crisis, or if it wanted help in providing insurance for
investors.
3. CARICOM enables greater cooperation and advancement of the Caribbean region by seeking
to coordinate foreign policy and by sharing the development of projects that help poorer
states in the community.
4. Business in action: This will be unique for each student.

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10.12 Explain how economic institutions or trade agreements

impact the Caribbean
1. The IMF provides short-term finance to countries that have problems with debt, and in turn,
the countries must alter their economic policies to reduce their debt. In contrast, the World
Bank places more emphasis on providing funding and technical assistance for long-term
development projects.
2. A development bank provides funds for important projects that benefit a country in the long
term, such as water-supply development projects. It helps to provide funds for projects that
would otherwise not be able to run.
3. In a free trade area, goods can move freely from one member state to another, and there is a
harmonisation of product standards within the area. Businesses benefit from not having to
pay tariffs and taxes.
4. Business in action: This will be unique for each student.

10.13 Identify major economic problems of the Caribbean

1. A high level of unemployment means there are fewer people earning money, so there are
fewer people who can spend money to increase the economy.
2. Population density in some Caribbean countries may lead to net emigration because there
are not enough jobs for the number of people, therefore they will have to look to other
countries to find jobs.
3. Economic dualism is the existence of two or more industrial or economic zones in a country
(or region) characterised by differing levels of capital, production, technology and other
economic factors.
4. Business in action: This will be unique for each student.

10.14 Outline appropriate solutions to the major economic

problems of the Caribbean
1. There is a lack of a developed capital market in the Caribbean, which is limiting FDI. If there
were more financial institutions, such as investment banks, then more long-term funding
would be available for businesses to help them grow.
2. Caribbean nations can go about improving the human resource capacity of the region by
providing better education, so that trained people can make more of a contribution to the
technology-based economy.
3. The types of industries that Caribbean countries could develop are manufacturing,
technology, distribution and export industries.
4. Business in action: This will be unique for each student.

10.15 Explain the role, benefits and impact of foreign investment

1. A foreign multinational company may want to invest in the Caribbean due to the potential in
tourism, opportunities for investing and selling (such as in renewable energy), and to tap into
the market of potential employees.

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2. The implications of FDI for Caribbean sovereignty are that some of the control would be
taken away and put into foreign hands (such as the owners and investors of businesses).
3. A foreign energy company with a proven track record would be good because it has been
proved to be successful, it would create jobs for the local community, and new forms of
energy would potentially reduce the emission of harmful greenhouse gases.
4. Business in action: This will be unique for each student.

“Develop your exam skills” answers

Paper 1
1. The correct answer is B. A customer with an online account can access his or her account via
the Internet and make transactions and payments from home.
2. The correct answer is C. While e-commerce took off in a big way at the start of the century,
the use of cellphones (m-commerce) to make purchases is only a recent development.
3. The correct answer is B. There is a good chance that by copying music from a website and
then sharing it with others, this will infringe someone’s copyright and therefore would be
illegal.
4. The correct answer is A. Figures associated with national income are most frequently used
to measure standard of living, while the other three alternatives are most commonly used to
measure quality of life.
5. The correct answer is C. Barbados is a country that scores highly in terms of human
development, whereas the other countries listed come out relatively less well.
6. The correct answer is A. The clearest monetary benefit will come from economic
development, which leads to an increase in the national income and increased incomes
for individuals.
7. The correct answer is A. A problem facing most Caribbean economies is that they are
relatively small in terms of their resources and size, and populations are clustered largely in
urban areas.
8. The correct answer is D. When a foreign company invests in plant and equipment in another
country, this is an example of FDI.
9. The correct answer is C. Two key objectives of the World Bank are to tackle poverty in the
poorest countries of the world, and to engage in long-term infrastructure projects that yield
sustainable benefits over time.
10. The correct answer is D. Injections of foreign capital give foreigners more control over
decision-making processes. Foreigners may have less understanding of the needs of
the local economy.

Paper 2
1. (a) E-commerce refers to the buying and selling that takes place via the Internet. For
example, many businesses establish retailing websites enabling them to take electronic
orders and payments from customers who access their online store (website).

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(b) Answers could include any two of the following:

• Traditional ICT tools
• Digital communication technologies
• Mobile technology
(c) (i)  A utomatic Teller Machines (ATMs) – ATMs facilitate many transactions and are
readily available. They have reduced the need for tellers at counters. This reduces
the costs (wages) of firms and increases trade.
(ii) Online banking – this gives customers electronic access so they can manage their
money remotely. It reduces the costs of paper transactions. Purchases can be made
online which increases trade.
(d) Answers could include any two of the following:
• Security – there will be security issues with cybercrime, industrial espionage and
hacking. Businesses will need to spend more money securing electronic data. This
increases costs for the business.
• Privacy – information about stakeholders is stored electronically. Businesses
should not store more information than is necessary. If data is not protected then
individuals would not trust businesses anymore.
• Intellectual property infringement – ICT can be used to infringe on intellectual
property rights. Infringement will cause businesses to lose money invested in goods
and services. If businesses recognise infringement they will need to go to court,
which can mean time and resources being used up.
• Impact on humans – unethical businesses can invade people’s privacy with
unwanted advertising. Some unethical businesses can defraud unsuspecting
consumers out of money. Consumers will not trust genuine businesses in the future.
• Distraction – employees will use ICT when they are supposed to be doing work. This
reduces their output since they are distracted. The business will have to establish
clear guidelines relating to ICT use at work and will even have to use resources to
monitor its use.
2. (a) (i)  Encourages free trade around the globe. Resolves trade disputes amicably.
(ii) Provides aid for developing countries. Promotes capital investment in member
countries.
(b) For example, in Barbados the IMF provided funding to assist with debt management.
The island was able to use the funds once the guidelines provided were adhered to. The
foreign exchange reserves were also increased, which helped to maintain the exchange
rate.
Structural adjustments were imposed by the IMF to qualify for the loans. These included
cuts in expenditure in all government departments. Unemployment increased and the
quantity and quality of social services available diminished.
3. (a) (i)  If citizens do not have access to these facilities they will have poor health, be
uneducated and will not get the restorative aspects of recreation. Their quality
of life will be diminished since they will be less healthy, will not be able to get
qualifications to get certain jobs, and will not get rest and relaxation.

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(ii) The food that individuals eat and the nutritional value of their diets will determine if
individuals are able to function properly. Those with poor diets will have a reduced
quality of life.
(b) Answers could include any two of the following:
• To improve cooperation in different industries
• To bolster the economic and social development of member countries
• To coordinate foreign policies
(c) CARICOM established the Caribbean Examinations Council to facilitate academic
qualifications throughout the region. This has rationalised the education system
and means that everyone has access to the same qualifications at different levels of
education.
(d) Education allows individuals to gain skills and knowledge, thereby increasing human
capital. Individuals are able to get better jobs and use information to solve problems
in society. They become more productive, especially if they use technology. Increasing
productivity results in greater output and leads to economic growth.
4. (a) (i)  S tandard of living refers to how much income people earn and how much spending
they can do with this income. It measures consumption of goods and services or
material items.
(ii) Quality of life refers to the extent to which a country enjoys its wealth. It measures
access to non-material aspects of life.
(b) Answers could include any four of the following:
• Level of consumption of goods and services
• Average disposable income of the population
• Level of national ownership of capital equipment
• Access to modern technology
• Level of investment in research and technology
(c) Gross domestic product (GDP) refers to the market value of the final goods and services
produced within a country in a given period. Gross national product (GNP) refers to the
market value of the final goods and services produced by the resources of a country.
With GDP the goods and services are produced within the physical boundaries of the
country and can be made by foreign or domestic resources. With GNP the goods and
services are produced by the resources of the country whether domestically or abroad.
(d) Increasing national income will increase the quality of life. Individuals will be able to
afford more healthcare, educational and recreational facilities. Individuals will also be
able to afford better diets.

9 Principles of Business for CSEC®, 2nd edition © Oxford University Press 2019