Reading

1.Read text 4 and think of the suitable title.

TEXT 4

A business, like the people who run it and the society in which it exists, is constantly changing. The way in which it develops and its ultimate success or failure depend upon:

1 People The person who starts a business might be prepared to work long hours to make it a success. As it becomes more secure she/he might prefer more leisure time to increased profits. The way in which the business develops can be helped or hindered by the available skills in the labour force.

2 Technology Changes in technology can make a product or a production method obsolete, that is old-fashioned or out of date. New products will have to be found, new machinery bought and the labour force retrained.

3 The economy Ahigh level of unemployment in an economy can mean a reduction in labour costs. It can also mean less demand for the product and a more competitive market. This will have implications for the costing, pricing and marketing of a product. It can also lead to changes in production methods and will certainly affect profitability.

4 The government Governments make laws. A change in the laws governing health and safety in the workplace can lead to increased production costs. Other laws might increase the clerical work required of a business.
The government can also affect the general level of demand in an economy by the way in which it raises money and the way in which it spends it. If the government decides to increase the tax on a particular type of good then it is likely that the demand for that good will fall. The extent to which the demand falls will depend on its price elasticity.

5 Other organizations The attitudes and activities of trade unions, the activities of pressure groups can also affect the development of a business. A powerful and active trade union can influence working practices and raise the labour costs of a business. A political pressure group might mount a campaign to stop people buying certain types of goods.

6 The market The markets in which a business operates will also affect its development.

The impact of these forces will vary from business to business and will depend, amongst other things, upon the size of the business, the quality of its management, the finance available to it and the way in which it has developed in the past. Whatever the effect on a business the business plan must be constantly reassessed and modified to take changing circumstances into account.

2.Comprehension check.

Here are some answers about factors affecting the development of a new business. Write the questions.

a) What ?

The way in which a new business moves forward or fails depends upon six factors.

b) Why ?

To make a new business a success.

c) In what case ?

The available skills in the labour force.

d) What ?

New product will have to be found, new machinery bought and the labour force retrained.

e) What ?

A high level of unemployment in the economy means a reduction in labour costs, less demand for the product and a more competitive market.

f) In which ways ?

By the ways in which the government raises money and spends it.

g) Who ?

A powerful and active trade unions.

h) Why ?

To take changing circumstances in which a business exists into account.