Page 300 - Cambridge IGCSE Business Studies

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Section 6:

External influences on business activity

This section analyses how governmental, environmental influences business operations and success. The role of
and international factors influence and shape business pressure groups and government initiatives aimed at
decision-making. controlling business externalities has become significant
in recent years. When making decisions, businesses
The government of a country has the job of organising
need to bear in mind their environmental, ethical and
funds for the common needs of the people in areas such
corporate responsibilities.
as education and health. Every government sets out
certain economic objectives and aims to achieve them The global recognition of brands is a sign of the growth
by setting relevant economic policies. The tax ation and in international trade and the growth of globalisation.
interest rate policies of the government help meet a Although the advantages of glo balisation are many,
country’s economic aims but also have a major impact on some argue that it is done at the cost of environmental
businesses. The trade cycle also aff ects businesses. degradation and that one country’s gain is another
country’s loss. The international business environment
The positive and negative impact of businesses on the
and its considerations also influence business activity.
physical environment and society around them greatly