6.1 External Influences on Business Activity

2026 Syllabus Objectives

By the end of this topic, you should be able to explain and evaluate:

1. The advantages and disadvantages of privatisation in a given situation
2. The advantages and disadvantages of nationalisation in a given situation
3. How governments use the law to control: employment practices, conditions of work (including health and safety), wage levels, marketing behaviour, competition, location decisions, and particular goods and services
4. The impact of changes in political and legal factors on business decisions
5. How government might intervene to help businesses and encourage enterprise
6. How government might intervene to constrain business activity
7. How government might deal with market failure
8. The key macroeconomic objectives of governments: low unemployment, low inflation, economic growth
9. How macroeconomic objectives and economic performance impact business activity
10. Government policies used to achieve macroeconomic objectives: monetary, fiscal, supply-side and exchange rate policies
11. The impact of changes in these government policies on business decisions
12. The impact of and issues associated with corporate social responsibility (CSR)
13. Why businesses need to consider the needs of the community, including pressure groups
14. Demographic changes at a local, national and global level
15. The impact of social and demographic change on business decisions
16. The impact of technological change on business decisions
17. The impact of competitors and suppliers on business decisions
18. The importance of international trading links and their impact on business
19. How international trade agreements might impact businesses
20. The role of technology in international trade
21. The advantages and disadvantages that a multinational might bring to a country
22. Relationships between multinationals and governments
23. How physical environmental issues might influence business behaviour
24. How a business and its stakeholders may use an environmental audit
25. The impact of the growing importance of sustainability on business decisions

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