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ScotlandBusiness Management

The External Business Environment

8 dot points across 8 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

How do business ethics, corporate social responsibility and environmental pressures shape the strategy of a modern organisation?

Business ethics, corporate social responsibility and environmental sustainability as contemporary external pressures: their drivers, the costs and benefits of acting responsibly, and the risk of being seen as merely greenwashing.
How ethics, corporate social responsibility and environmental sustainability shape Advanced Higher Business Management strategy: why these pressures have grown, the costs and benefits of acting responsibly, and the reputational risk of greenwashing.
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How do government policy and the wider economic environment shape the decisions an organisation makes?

Government policy and the economic environment as contemporary external influences: fiscal and monetary policy, legislation and regulation, and economic conditions such as growth, inflation, interest rates and unemployment, and how they affect organisations.
How government policy and economic conditions shape Advanced Higher Business Management decisions: fiscal and monetary policy, legislation and regulation, and the effect of growth, inflation, interest rates and unemployment on organisations.
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How does technological change in the external environment create both opportunity and disruption for organisations?

Technological change as a contemporary external influence: automation, data and artificial intelligence, e-commerce and digital disruption, and the strategic opportunities and threats they create across functions.
How technological change shapes Advanced Higher Business Management strategy: automation, data and AI, e-commerce and digital disruption, and the opportunities and threats they bring to a modern organisation.
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How do organisations expand abroad through foreign direct investment, joint ventures and strategic alliances, and what are the trade-offs of each?

Methods of international expansion: foreign direct investment (greenfield and acquisition), joint ventures and strategic alliances, and the advantages and risks of each entry method.
How organisations expand internationally in Advanced Higher Business Management: foreign direct investment by greenfield build or acquisition, joint ventures and strategic alliances, and the advantages and risks that make each entry method suit different situations.
14 min answer →

What is globalisation, what drives it, and how does it reshape the environment a large organisation operates in?

Globalisation: the integration of national economies into a single world market, its drivers (technology, transport, trade liberalisation, deregulation), and the opportunities and threats it creates for organisations.
What globalisation means for an Advanced Higher Business Management organisation: the integration of world markets, the drivers behind it (technology, cheaper transport, trade liberalisation and deregulation), and the strategic opportunities and threats it creates.
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What is a multinational corporation, why do firms become multinational, and how do MNCs affect host and home countries?

Multinational corporations (MNCs): their features and reasons for becoming multinational, and the costs and benefits they bring to host countries and to their home country.
What multinational corporations are in Advanced Higher Business Management: why firms go multinational, and a balanced analysis of the benefits and costs MNCs bring to the host countries they invest in and to their home country.
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How do trade blocs and emerging markets such as the EU, ASEAN and China affect the trading environment for an organisation?

Trade blocs and emerging markets: how regional trade blocs (the EU, ASEAN) and the rise of major economies such as China affect the opportunities, costs and trading conditions an organisation faces.
How trade blocs and emerging markets shape Advanced Higher Business Management strategy: the way the EU and ASEAN create free trade inside and barriers outside, and how the rise of economies such as China opens markets and intensifies competition.
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What is transfer pricing, why do multinationals use it, and what are the ethical and legal issues it raises?

Transfer pricing: the prices set for goods, services and intellectual property moved between divisions of the same multinational, how it is used to shift profit to low-tax countries, and the ethical and regulatory issues this creates.
What transfer pricing means in Advanced Higher Business Management: the prices a multinational sets for internal transfers between its divisions, how it can be used to shift profit to low-tax countries, and the ethical, reputational and regulatory issues this raises.
13 min answer →