Business organisation and environment

Table of Contents

1. Topic pack - introduction
2. 1.1 Nature of business activity - notes
3. 1.1 Nature of business activity - questions
4. 1.2 Types of organisation - notes
5. 1.2 Types of organisation - questions
6. 1.3 Organisational objectives - notes
7. 1.3 Organisational objectives - questions
8. 1.4 Stakeholders - notes
9. 1.4 Stakeholders - questions
10. 1.5 External environment - notes
    1. External environment
    2. Introduction - PEST/STEP analysis
    3. The legal and political environment - introduction
    4. The legal environment
    5. Political stability and instability
    6. The social and cultural environment - introduction
    7. Social responsibility
    8. Demographic trends
    9. The technological environment - introduction
    10. The Internet and the World Wide Web (www).
    11. E-commerce
    12. Technological change
    13. The ecological environment
    14. The economic environment - introduction
    15. Economic growth
    16. The Business Cycle
    17. Inflation
    18. Exchange rates
    19. Unemployment
    20. Interest rates
    21. Government fiscal policy
11. 1.5 External environment - questions
12. 1.5 External environment - simulations and activities
13. 1.6 Organisational planning tools - notes
14. 1.6 Growth and evolution - notes
15. 1.7 Growth and evolution - questions
16. 1.7 Growth and evolution - simulations and activities
17. 1.6 Change (HL only) - notes
18. 1.9 Globalisation - notes
19. 1.9 Globalisation - questions
20. Print View

Unemployment

If unemployment is high, then incomes are lower, and demand for goods and services is likely to fall. On the plus side, it may mean there is plenty of labour available and at lower wages, but this is of little use is this if there isn't demand for the goods and services they can produce.

Types of unemployment

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• Types of unemployment

Impact of unemployment

Unemployment is bad news for both individuals and business. Those made unemployed normally lose part or all of their income and therefore their ability to spend at the same level. This in turn causes aggregate demand (total expenditure) in the economy to fall. Raw materials and resources fall in price as a result. Workers also see their 'power' reduced and this means that their representatives cannot bargain for such high wage increases.

Faced by a fall in overall demand, producers will seek to cut costs and labour is normally one of those they cut. Investment will also fall and this might be in people and training just as much as machinery. Those firms which suffer the most immediate impact on their performance might be vulnerable to take-over and that too can cause a reduction in the number of employees needed.

Governments will see tax yields fall in time of high unemployment. This may affect their spending plans, negatively affecting demand levels.