ATHE Level 3 Unit 1 Business Environment Assignment Answers

Aim of the Unit 1

This unit aims to learn how businesses operate in different economic environments, and the impact external factors can have on organisations. With the help of this unit, students can learn what role stakeholders play, they will gain knowledge of different sectors of the economy, and the impact that political, social, technological, legal and economic factors have on business will be understood.

This unit also helps in exploring how employment and work of employees have changed in recent years due to globalisation and constant development in technology. By going through this unit, students will gradually develop analytical skills as they will be examining real-life cases of organisations and will analyse how changes are made in the business environment, which affects both individuals and organisations in the modern economy.

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AC 1.1 The learners must select and name, a profit-making business. Learners must be able to clearly explain

a) what are the interests of different stakeholders and
b) their objectives. Examples should be used to explain and illustrate differences and potential conflict for part
c). At least two internal and two external stakeholder groups should be included in the response. 

Answer:

The business that is doing well and making profits is being chosen for this assignment, such as Tesla. Tesla is a multinational company that designs and manufactures electric vehicles, batteries and clean energy products. Tesla is a big business, and thus has various stakeholders interested in the success of the business. Stakeholders are those who are impacted by the actions and choices made by a business.

Internal Stakeholders

Employees: One of the primary internal stakeholders at Tesla is the employees. Good salaries, job security, safe working conditions and opportunities for career growth are their primary interests. Staff also want to be treated fairly and have a positive atmosphere at work.

Employees' goal is to have a steady job and to gain the necessary skills to get a steady income. For instance, Tesla employees could see higher pay and safer equipment at work.

Owners and Shareholders:

The main interest of owners and shareholders is in making a profit and increasing the value of their investment, which involves the use of money in Tesla. They also wish to see the company expand and be competitive in the electric vehicle market.

Their goal is to make as much money as possible and make the stock's share price as high as possible. For instance, when shareholders think that Tesla will create new products that will add value to the market, they will back the product launches.

External Stakeholders

Customers: Customers are external stakeholders, as they purchase Tesla products. They like good quality vehicles, good prices, good customer service and modern technology.

The objective of customers is to receive value for money and reliable products. For instance, when people purchase a Tesla car, they assume that it will have good battery life, security and state-of-the-art technology.

Government

The government is also an external stakeholder since laws and regulations are ones that businesses have to abide by. The government wants to know about the tax payments, legalities, jobs and environmental duties.

The intention of the government is to make sure Tesla is operating legally and benefiting the economy. For instance, some governments may offer incentives to encourage people to purchase Tesla vehicles, as they help lower pollution.

There are differences and potential conflicts between stakeholders.

Interests of the stakeholders can differ, and these differences can sometimes lead to conflicts in the business.

Employees might want higher pay and better benefits, for instance, and shareholders might want Tesla to cut costs to boost profits. While these may benefit Tesla workers, they could come at a cost to the shareholders.

There is a possibility of another conflict between the customer and the business owners, too. Lower price is the desire of customers, while a higher price is the desire of shareholders/owners for profit. This establishes a balance that Tesla has to take care of.

Conflict can also arise between the government and business when appropriate environmental or employment law is not adhered to. The government could impose harsher controls, and the company could want to cut its operating expenses.

In general, stakeholders pursue different interests and goals and businesses such as Tesla need to strike a balance between them to ensure they can function.

AC 1.2 Learners must apply their learning to a named not-for-profit organisation. The explanation must demonstrate that the learner understands the difference between profit and not-for-profit organisations. The answer should explain both

a) interests and
b) objectives of at least two internal and two external stakeholder groups. 

For this task, Oxfam has been selected as the not-for-profit organisation. Not-for-profit organisations are not primarily concerned with making profits for owners or shareholders; they are mostly concerned with the betterment of society and the support of communities.

Internal Stakeholders

• Employees: Employees at Oxfam are interested in fair wages, job security and working in a positive environment. They aim to achieve the organisation's mission while establishing a solid career path.
  
  
• Volunteers: Volunteers are important internal stakeholders as they assist Oxfam in its charitable works. Their interest is to contribute towards helping people in need and gaining personal satisfaction. Their goal is to "advocate for social causes and make a difference in communities.

External Stakeholders

• Donors: Oxfam's financial support comes from donors. Their concern is that gifts are put to good use and that they have the greatest impact possible. Their goal is to contribute to the alleviation of poverty and humanitarian initiatives in the world.
  
  
• Local Communities: A key external stakeholder is the communities in which support is provided. They are interested in access to food, health care, education and emergency assistance. They aim at enhancing living conditions and getting long-term assistance when facing challenges.

The purpose is indeed the main difference between profit and not-for-profit organisations. Businesses are primarily interested in profit and business growth, whereas organisations like Oxfam are well concerned with social welfare and community support. While both organisations have stakeholders, they have different goals, as one is profit and the other is to benefit society.

AC 2.1 The learner work should include the four sectors listed in the indicative content. Descriptions of output should include examples for each sector.

Answer:

The economy is divided into four different sectors based on the type of work and services provided by businesses. All the sectors are contributing to the growth of the economy as well as employment.

Primary Sector

The primary sector refers to the harvesting and gathering of natural resources from the environment. The companies in this area play with raw materials right out of nature.

Examples include:

• Farming
• Fishing
• Mining
• Forestry

For example, farmers produce crops and dairy products, which are later used by manufacturers and retailers.

Secondary Sector

The secondary sector is manufacturing and construction. A sector where raw materials become finished products.

Examples include:

Car manufacturing

• Construction companies
• Food processing factories
• Clothing production

For instance, Tesla is in the secondary sector since it produces batteries and electric cars.

Tertiary Sector

The tertiary sector is for the provision of services, not actual goods. It is one of the biggest sectors in most of the developed countries.

Examples include:

• Banking
• Healthcare
• Education
• Retail
• Transport

Supermarkets, hospitals, etc., are examples of tertiary activities as they offer services to customers.

Quaternary Sector

The quaternary sector is related to knowledge, technology and research-based activities. This sector has been rapidly expanding with the use of digital technology and innovation.

Examples include:

• Information technology
• Scientific research
• Software development
• Data analysis

The quaternary sector includes, for instance, companies that are developing software for artificial intelligence.

Overall, all four sectors are related and contribute to the economic development through employment generation, production and services.

AC 2.2. Learners must state the country in in which the chosen economy is based. The analysis should use at least two measures (e.g. value of output or employment) to show the size of each sector. The analysis must also refer to the importance of each sector for the economy in the chosen country. 

Answer:

This economy is the United Kingdom. The primary, secondary, tertiary and quaternary sectors comprise the UK economy, but some sectors are more important and larger than others.

1. Primary Sector: The primary sector in the UK is a small sector by comparison to other sectors. It comprises agriculture, fishing and mining. The sector supplies raw materials and foodstuffs, but only a small number of people are employed in this sector. While the sector is small, it is still significant in terms of food supply and natural resources.
   
   
2. Secondary Sector: The secondary sector includes manufacturing and construction. This would include industry sectors like car manufacturing, engineering and food production. Manufacturing is millions of people's jobs and billions of pounds to the UK economy. Companies like Rolls-Royce Holdings and car manufacturers promote exports and economic growth.
   
   
3. Tertiary Sector: The tertiary sector is the biggest sector of the UK economy. It covers banking, retail, healthcare, transport and education. Service industries account for about 70-80% of jobs in the UK. Services have a high importance for economic stability and for employment in London's financial sector, with a significant contribution to the UK GDP.
   
   
4. Quaternary Sector: The fourth sector is the fastest-growing sector, owing to technological developments and innovation. It contains research, IT and software development. Technology companies and digital businesses create high-skilled jobs and help improve productivity in the UK economy.

2M1 The analysis must be based on one named country. The analysis can consider changes within sectors, (e.g. the decline of one particular type of manufacturing and its replacement by a different type of manufacturing), or, changes between sectors, (e.g. the decline of the whole manufacturing sector and the increase in size of the service sector). 

Answer:

The economy has undergone considerable transformation in the UK over the past couple of decades or so. The most significant change has been the reduction of the manufacturing industry and the expansion of the services industry.

Industries like coal mining, steel making and fabrics used to be significant in the UK. There was a large number of people employed in factories and heavy industry, particularly in northern England and Wales. But, as a result of competition around the world, many manufacturing firms cut back or shut down due to cheaper labour and production costs abroad.

Manufacturing is still present, but it has shifted to advanced manufacturing areas, such as aerospace, pharmaceuticals and electric vehicle production. For instance, more technology and automated machinery are now used, so fewer workers are required than in the past.

Meanwhile, the tertiary sector has been undergoing rapid growth. Today, the majority of the population in the UK is working in industries like banking, the health service, education, retail and the tourism industry. The importance of the service sector has grown in London, as the city has become one of the world's leading financial centres.

Digital technology and innovation have also increased the size of the quaternary sector. As businesses become increasingly data and web-driven, there has been a growth in jobs in information technology, software development and research.

There have been positive and negative changes as a result of these. The development of services and technology has resulted in new employment opportunities and a greater economic expansion. Regrettably, the decline of conventional manufacturing has led to worklessness and financial problems for a few industrial areas in the UK.

AC 3.1 The STEEPLE analysis should include both positive and negative aspects of each element. It is acceptable for learners to present the STEEPLE analysis in either text or tabular form.

Answer:

Social Factors

• Positive Impact: A positive social impact of Tesla is that they are encouraging more and more people to become concerned about the environment and interested in electric cars. This boosts the number of people who want to buy a Tesla vehicle. 
  
  
• Negative Impact: A downside is, however, that in some markets, people continue to favour petrol or diesel cars, potentially lowering sales figures.

Technological Factors

• Positive Impact: Tesla has access to new technologies and innovations, particularly in battery technology and autonomous driving. This assists the company in remaining competitive. 
  
  
• Negative impact: On the other hand, technology evolves rapidly, and Tesla has to invest heavily in R&D to stay at the forefront of its line of products.

Economic Factors

• Positive Impact: The increasing demand for electric vehicles can help Tesla increase profits and expand globally. 
• Negative Impact: But inflation and other economic issues like high interest rates and rising production costs can impact customers' spending behaviour and consequently profitability.

Environmental Factors

• Positive Impact: Tesla has a positive impact on the environment because they are electric vehicles and thus help to lower carbon emissions. 
• Negative Impacts: There are still environmental issues associated with battery production; however, as the materials are mined, such as lithium.

Political Factors

• Positive Impact: Government support and incentives for EVs can support and drive EV sales for Tesla. Trade policies or government regulations could impact production and/or export. 
• Negative impact: A negative factor is one that could impact production and/or export as a result of changes in trade policies or government regulations.

Legal Factors

• Positive Impact: Tesla has to adhere to safety, employment and environmental laws, which helps to establish customer trust.
• Negative Impact: On the other hand, there is a need to face pressure on the business due to the strict legal requirements.

Ethical Factors

• Positive Impact: Tesla is considered a positive force for sustainable energy and cleaner transportation. 
• Negative Impact: There have been complaints about poor working conditions and employee treatment at some factories.

AC 4.1 The learner explanations must cover both the changing nature of work and the changing nature of employment. Responses should consider global patterns and not be confined to one economy. A substantial amount of the indicative guidance should be included in the response.

Answer:

The nature of work and employment has changed significantly around the world due to technology, globalisation and changing business needs. Digital systems, automation and online communication are used by many organisations, changing the way work is done by employees and business is done.

One major change is the increase in remote and hybrid working. Many companies enabled their staff to work remotely with technology like video meetings and cloud-based software after the COVID-19 pandemic. This has provided workers with greater flexibility and better work-life balance. But certain workers might have feelings of isolation or communication difficulties if they work from home.

The expansion of the gig economy is another key change. Numerous people are currently finding work as freelancers or on short-term contracts via online channels. There are jobs like food delivery drivers, online tutors and digital content creators that are becoming more prevalent all over the world. This offers workers flexibility in working, but workers may not benefit from stable work and income.

The transformation of job markets has also been induced by technology and automation. In factories, supermarkets and offices, machines and artificial intelligence are now used to finish tasks at a faster and more efficient rate. This can boost the productivity of businesses, but may diminish the number of jobs for people.
Employment has also been impacted by globalisation.

4M1 The analysis must cover the implications of the changes to working patterns for organisations and working patterns for individuals The changes should be recent changes i.e. from the last 2 decades, rather than historical changes.

Answer:

With the advent of technology, globalisation and newly formed employee expectations, working patterns have undergone drastic changes in the past two decades. These changes have occurred to both an organizational and individual level.

There are a number of changes, including the rise in remote and hybrid working. Many employers now have such regulations that allow their workers to work from home for a portion of the week or their entire week. This can help businesses save on office expenses and boost employee satisfaction. Businesses also can hire workers from various localities instead of just local ones. But there can be issues of communication, team working and controlling employee performance.

Remote working offers flexibility and improved work-life balance for individuals. Staff can save time and money by not travelling to and from the office every day. However, other employees might experience loneliness and find it difficult to balance their work and personal life.

The increase in flexible and gig jobs is another significant modification. There are many people now who are working as freelancers, delivery drivers or self-employed contractors via digital platforms. Employers benefit as they can employ workers as and when they require them and avoid the high expense of permanent employment. But, it can lead to turnover among employees and reduced employee loyalty in the business.

Flexible working gives individuals the freedom to work their own hours and potentially in more than one business. However, such jobs may be insecure and not have pensions or employee benefits.

The advent of technology and automation has also altered working patterns. Automated systems and AI are being implemented in businesses to boost productivity and cut down on expenses. This can lead to a decrease in traditional employment opportunities for organisations.

Overall, there have been opportunities and challenges for organisations and individuals in recent changes in working patterns. Workers' employment has become freer and more uncertain in some jobs; businesses are more flexible and technology driven.

4D1 is synoptic across LO3 and LO4 4D1 The learner response should demonstrate evaluation and must contain an examination of the positive and negative aspects of technology on both b) Organisations and c) Individuals Learners must draw a conclusion from the evidence contained within their answer.

Answer:

The last 20 years have seen a tremendous change in technology that has affected organisations and people alike. While technology has opened up a multitude of opportunities, there have also been several challenges in the workplace and economy.

Technology has helped to make things more efficient and productive for organisations. Automation, artificial intelligence and digital systems are now available for businesses to do things faster and more accurately. Communication has also been enhanced via email, video conferencing and cloud software, enabling businesses to function on a global scale and facilitate remote work. Companies are also able to provide access to more customers and boost their sales by using online platforms.
Technology, however, also has negative impacts on organisations. Organisations have to invest substantial sums of money in software and cybersecurity and provide training for their workforce to cope with the technological advancements. In some instances, the companies may grow reliant on technology, and an event such as a technological failure or cyber-attack can have a significant impact on the business.

Technology has provided flexibility and accessibility to work for people. A large number of employees now have the option to work from home, connect with fellow team members quickly and easily, and complete online training to enhance their abilities. New job opportunities have also been created with the advent of technology, including in the fields of digital marketing, software and data analysis.

In spite of all these advantages, technology has introduced problems for the workers as well. Some of the traditional jobs have been eliminated by automation and artificial intelligence, particularly in manufacturing and retail. Employees may have difficulty getting used to new technology, especially older workers, who might need extra training. Ongoing online communication can also lead to higher stress levels and an added blurriness between work and life.

The overall effect of technology was mainly positive as it has enhanced communication, productivity and opportunities for business internationally. The downsides (job displacement, dependency on technologies, etc.), however, are not to be forgotten. Finally, there is a need for organisations and individuals to keep evolving along with the technological advancements, and they should ensure that workers are catered to with training and fair employment.