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Level 2 Business and Economics: External Influences 2

Political, Social and Technological Influences

What does this resource cover? - See mind map.

In the first of these two resources on external influences, we looked at the effects that changes in economic activity can have on business. In this second article, we will be looking at three other important external effects on a business:

  • Political - 'politics' means power - who has the power to make decisions and influence the decisions of others. Politics is not just politicians in the Houses of Parliament - any situation where an individual or a group have 'power' can affect a business.
  • Social - society means people in groups. Society undergoes various changes as years progress and business has to make sure that it keeps pace with the changes in society. It might be changes in habits, spending, attitude, cultural change, fashion and so on.
  • Technological - the growth in technology has been rapid in recent years. Most businesses use some form of technology and are influenced by it in one way or another.

Close-up of a computer's circuit board Animal liberation protestors A bowl of salad

The advent of the silicon chip changed our lives forever, which offered businesses both opportunities and threats. Politics is not just about politicians - protests and popular causes are things a business has to be aware of. Changes in society mean firms have to adapt - the drive towards trying to promote healthy eating has affected many businesses in different ways. Copyright: Rodolfo Clix, Jess Dixon and Kathryn McCallum.

To try to illustrate the effects that these three things can have on business, we will use three case studies. The first two case studies are based on fictitious examples.

Pages in the Series