Responding to external factors — practice questions

Explain what is meant by an external factor, and give one example of an external factor affecting a New Zealand business.

Using specific examples, explain ONE positive and ONE negative impact on a business of an external factor of your choice.

A large New Zealand food manufacturer faces rising costs from a new environmental compliance requirement. It can pass the cost on in its prices, or absorb it and reduce its margin.

Referring to sales volume and long-term viability, justify, with TWO reasons, which response would be more appropriate.

Explain how a rise in the minimum wage could affect a large retail business.

Explain, with TWO responses, how a large business could manage the increased costs caused by a rise in the minimum wage.

A large New Zealand hospitality business faces both a minimum wage increase and a rise in the Official Cash Rate in the same year.

Referring to cash flow and staff retention, justify, with TWO reasons, whether it should respond by automating parts of its service or by raising its prices.

Identify and explain a method of industrial action that may be taken by employees.

Explain ONE specific action that management could take in response to an overtime ban, and how it could impact the business.

During collective bargaining, a large employer can either settle at the union's claim to end an overtime ban immediately, or hold its position and manage the disruption.

Referring to operating costs and workplace relationships, justify, with TWO reasons, which response would be more appropriate.

Explain why it is a benefit to a business to belong to an employer association.

Fully explain why it is a benefit to a business to belong to an employer association, and how its membership could positively impact the business.

A large business is deciding whether to continue paying its employer association subscription, or to handle advocacy and employment advice in-house.

Referring to brand reputation and cost, justify, with TWO reasons, whether it should remain a member.

Identify a demographic change affecting New Zealand and explain why it may have an impact on a business's sales.

Fully explain how an ageing population could affect a large New Zealand business's production, and how the business could respond.

A large New Zealand food retailer sees its traditional customer base ageing while the surrounding area becomes more ethnically diverse.

Referring to sales revenue and brand reputation, justify, with TWO reasons, whether it should adapt its existing stores to serve the new local population, or relocate to a suburb matching its current customers.

Explain what is meant by societal expectations of business activity, and give an example.

Explain ONE potential challenge or cost a business might face when demonstrating that it meets societal expectations, and how this could impact the business.

A large New Zealand exporter discovers that a long-standing overseas supplier's labour conditions fall short of what its customers would expect, although they meet local law in that country.

Referring to brand reputation and supply reliability, justify, with TWO reasons, whether it should end the relationship immediately or require improvement over an agreed period.

Explain why it would be a benefit to a business to implement new technology.

Using specific examples, explain ONE positive and ONE negative impact on a business when it invests in new technology.

A large New Zealand horticultural business introduces drones that photograph its orchards, and the images sometimes capture neighbouring properties.

Referring to legal compliance and community relationships, justify, with TWO reasons, whether investing in additional systems to manage that data is worthwhile.

Why is it important for a business to ensure that all employees have a written employment agreement?

Fully explain how creating an employment agreement in consultation with the employee provides an opportunity for the business, and how this could positively impact it.

A large business must reduce staff numbers. It can move quickly and make the redundancies with minimal consultation, or run a full consultation process over several weeks.

Referring to legal risk and staff morale, justify, with TWO reasons, which approach would be more appropriate.

Identify a business action and explain why it complies with laws about the management of resources.

Explain ONE positive and ONE negative impact on a business when it complies with laws about the management of resources.

A large business needs a resource consent to expand its site. It can lodge the application immediately, or spend three months consulting neighbours and local iwi first.

Referring to project cost and stakeholder relationships, justify, with TWO reasons, which approach would be more appropriate.

Explain why a business collecting customer information should be aware of its obligations under the Privacy Act 2020.

A business uses drones that sometimes capture images of neighbouring properties.

Fully explain ONE obligation this creates under the Privacy Act 2020, and how the business could meet it.

A large retailer wants to launch a loyalty programme that would collect detailed purchase histories to personalise its marketing.

Referring to customer trust and legal compliance, justify, with TWO reasons, whether it should collect the full purchase history or only a limited set of data.