Belmont Academy Evening Institute

Principles of Business

Topic: Technology and the Global Business Environment

Sub-Topic: Technology and Business

Business technology
This refers to technology that helps to run a business and its operations. Examples
include machines programmed to carry out specific task, online selling websites and
computer programs to help accounting and marketing functions.
Digital technology
The branch of scientific engineering knowledge concerned with creating and making
use of digital or computerized devices, methods and systems.
Digital data
Data that is represented using machine language systems which can be interpreted by
various technologies.
Role of Technology/ICT in Business
Information and Communications Technology (ICT) encompasses digital technology
that exists to help individuals, businesses and organizations to use information. So ICT
is concerned with the storage, retrieval, manipulation, transmission and receipt of digital
data.
Ways in which technology has influenced Banking and Commerce
 The introduction of ATMs and ABMs has made it easier to deposit and withdraw
funds, as well as to access other services without having to go into a bank.
- The location of ATMs at hotels petrol service stations, malls and
supermarkets adds to the convenience to customers who can transact
business without having to wait in a line at a bank
- The practice of online banking enables customers to access, check and
manage their accounts from home and other locations using personal
computers and mobile phones. Eg
 Technology has influenced buying and selling through electronic commerce (e-
commerce). Individuals and business are able to make business transactions via
the internet without having to visit a physical shop/store.
Types of ICTs used in business
 Traditional ICT tools
i. Productivity tools
- Microsoft word used to create business documents
- Microsoft excel is a spreadsheet tool that is used to create graphs, tables,
make calculations. These assist in business presentations and reports
ii. Specialist applications
- For example in accounting, the software Quick Books is used for recording
purchases and sales, money received and paid, creating accounts etc

 Digital computer technologies (DCTs) are digital Digital communications

technology tools that make it possible for two or more people to communicate
with each other. Communication can be verbal, visual or in writing.
1. The internet
- Buying and selling of goods via the internet
- Collecting marketing data
- Promoting the business and its products online
2. Mobile technology – (M-commerce refers to the buying and selling of
goods using mobile technology typically the use of cell phones

E-commerce vs E-business
E-commerce covers outward facing processes that touch customers, suppliers and
external partners. These processes includes taking orders, making payments, taking
order and making deliveries.
E-business covers e-commerce but also covers internal processes such as:
- Production: linking machinery to sophisticated computers that control
production operations
- Inventory management: Software used to monitor inventory levels, orders,
sales and deliveries
-
Computer aided design (CAD) vs Computer aided manufacturing (CAM)
CAD is the use of computers in order to develop, modify and analyse the design. CAM
is the use of computer software in order to handle machine tools used in the
manufacturing of modules
Risk Management
The process of managing and controlling risk so that the risk taken is acceptable to the
owners and stakeholders of the firm, (the risk takers).
Ways in which ICT can be used to improve the efficiency of business operations
1. Speed and time
2. Easier storage
3. Improved sharing of information

Benefits of technology to business

1. Reach more potential customers: A local business can communicate with
customers and potential customers around the globe via a website
2. Provide better services to customers: Direct online interaction with customers
make it easy to improve customer experience by finding out what consumer
want. Also, consumers can make payments at their convenience online etc
3. Support better relationships with key partners (customers, suppliers, banks,
government)
4. Allow customers to better guide the business: Consumers can research online to
get the best buys/deals, customers can research more about the company
regarding their products, reputation, prices, services, delivery payment
arrangement etc.

Disadvantages of technology to business

1. Technological equipment and software are expensive to acquire and maintain
2. Files can be lost via viruses etc which hiders the business in their progress
3. Hacking – Customers’ personal information can be accessed and stolen and
used. Customers can be robbed/defrauded of their hard earned cash
4. It will cost the business to retrain workers to keep them up to date with the latest
technologies. Production time could be lost

Ethical Implications of the use of ICT in business

Ethics are the set of moral principles which guide what is right and wrong behavior.
Ethical issues concerning ICT are as follows:
- Security
- Privacy
- Intellectual Property Infringement
- Impact on Humans
- Distraction

1. Security
-password: Password is placed on documents and systems so as to minimize
unauthorized access to company information
- hacking: Company information can also be hacked from outside (when
someone not authorized illegally gains access to company’s database and
computer network
 - employees can sell company information to competitors
- employees can play games and do other personal stuff when they should be
busy working. Production time and profits could be lost

2. Privacy
- Records of customers, suppliers, creditors are kept electronically and are
accessed by authorized personnel. Customer, employee and company
information are stored electronically and away from public’s gaze (eyes)

3. Intellectual Property Infringement

Intellectual property infringement is the violation of an intellectual property right. For
example, creating a listing using a third party’s (another person or business’) image,
trademark, logo, design, etc., without the appropriate permission from the intellectual
property rights owner, can constitute intellectual property infringement

Copyright infringement refers to the right of an author or inventor not to have their
work duplicated. In other words, protection provided for authors, composers and artists

Intellectual property
This refers to creations of the mind such as inventions, literary and artistic works (eg
books and music), designs and symbols and names and images used in commerce (eg
in trademark, logo or brand image)
Ways of infringing intellectual property rights which are illegal and unethical:
 Directly copying parts of a book or publication
 Downloading and sharing music without paying for it
 Using software on a network without acquiring the licence to use it

4. Impact on humans
The use of ICT can have a negative impact on humans.
 Some fraudsters use the internet to con money out of people, for eg a person
posing as a genuine trader when the in fact have nothing to sell. Or a person
posing as a bank representative, illegally obtaining personal banking
information and use the information to defraud the unsuspecting victim.
 Unethical businesses can invade people’s privacy with unwanted advertising
 The use of the internet can encourage people to spend money on things they
cannot afford or that they don’t really want eg through gambling websites and
websites that sell thing on credit which become impossible to pay back
 5. Distraction
This can have a major impact on business, losing valuable business time and
subsequently money. For example:
 A clerk in a accounts office instead of focusing of work assigned, he/she
spend much of the time to read or watch other things on the internet
celebrity stories, football match, entertainment items.
 Spending time to read and reply to personal messages via WhatsApp or
Facebook rather than focusing on important work discussions
 Play video games

Sub-Topic: The Global Business Environment

National Income
National income is the value of a country’s income produced by a country over a given
period of time, usually a year
Gross Domestic Product (GDP)
The total money value of all goods and services produced in a country (within a
country’s borders) in a particular period of time, usually a year.
Gross National Product (GNP)
The total money value of all goods and services produced by a country (within and
outside a country’s borders) in a particular period of time, usually a year.
Per capita income
This is the average income per head of the population
Per capita income = National Income
Total population

Standard of living
This is a measurement of the goods and services that an individual is able to purchase
and enjoy with his or her income (including access to education and health)
Quality of life
This is the measurements of benefits of living such as access to health care and leisure
activities and a long life expectancy. Quality of life is concerned with providing
individuals with what they value, which might include access to fresh water and
unpolluted seas.
Standard of living reflects the objective aspect of how well the basic needs of life are
met, while quality of life is the person’s own subjective view of well-being and
satisfaction with her/his life.

Factors that determine a country’s standard of living and its quality of life
A country’s standard of living is often used to measure how developed a country is, and
hence how well off its citizens are. Standard of living essentially refers to how much
income people earn and how much spending they can do with this income. The
following are factors that measure a country’s standard of living:

Indicators of a country’s standard of living

 Level of consumption of goods and services: In most societies, the
consumption of goods and services is an indicator of how well off people are. Do
they own a car? What type of car people own? Can people afford to go on trips
abroad and how often? Can people afford to buy expensive houses and jewelry
and so on? People have a higher standard of living when they can afford to buy
more and more quality goods and services
 Average disposable income of the population: Average disposable income
can measure how well off people are on average in a particular country. The
more average disposable income people has the more goods and services they
can buy, hence having a higher SOL. However the less average disposable
income people has the less goods and services they can buy, hence enjoying a
lower SOL.
A person’s disposable income is that part of their income that is available to that
person to spend or save.
Disposable income is Gross pay minus Deductions (eg tax)

The average disposable income of a country is the average sum that citizens
have to spend once compulsory deductions have been taken from their
salaries/wages.

 Level of national ownership of capital equipment: The more capital

equipment that businesses have, the greater their potential to produce more
output. The more capital equipment that a country has, the better it can produce
output and earn income for its citizens.
 Access to modern technology: The use of more modern technological
equipment increases the opportunity to raise the SOL of a people through
 increasing production, fewer errors, less waste, lower costs and better quality
products. Society, businesses and consumers will all benefit from the use of
modern technology via:
- Cellphones- which enables rapid communication from anywhere
- Solar panels –to constantly provide household and businesses with increased
electricity supply
- Factory robots and automated equipment – to speed up production in mass-
production factories
- Commercial websites – to sell products
 Level of investment in research and technology: It is likely that countries
which invest the most in research and new technologies will enjoy the highest
standard of living. Countries like the United States of America, China and
Germany are some of the biggest investors in research due to their high national
income. As such this level of investment increase productivity (production and
efficiency) and create new products that help to improve people’s lives. Eg
investment and research in satellite transmission, medicine, aircraft, quality of
products, quality of productive equipment.

Indicators of a country’s quality of life

 Extent of security (level of crime): In the Caribbean, for eg in Jamaica the
crime level (including violent crimes) are at a high/ unacceptable levels. People
who live in these countries have a lower quality of life in this regard than those
who live in countries with lower crime rate.
 Availability of health, educational and recreational facilities:
- When people have greater access to good quality healthcare, they are more
likely to stay healthy.
- Similarly, society prospers when people have more opportunities to engage
with education.
- People with greater access to recreational facilities such as sports centres,
and parks usually enjoy a higher quality of life via relaxation, lack of stress,
managing stress, having fun.
 Diet and nutrition: the food that people eat and the nutritional value of their diet
will have a key impact on the quality of life. People who can only afford basic
staples will be disadvantaged compared with those who can enjoy a variety of
fresh fruits, vegetables and other food stuff that are rich in essential nutrients.
 Life expectancy: Life expectancy is the average age that a person can expect to
live in a given society. How long someone can expect to live is an important
indicator of quality of life.
 Rate of infant mortality: Infant mortality is a measure of the number of infants
that die during the first year after birth, per 1000 live births. It is regarded as a
good measure of the level of public health in a society. The lower the infant
 mortality rate of a people the greater the quality of life and health care of the
people. Less infants are dying hence a country can better take care of pregnant
mothers and their babies.
 Access to public utilities such as electricity, potable water and technology:
The more and easier access that people have to electricity; gas for cooking; air
conditioning units to beat the heat; potable water for bathing, cooking, cleaning
etc; internet, wifi, cellphone service etc the greater quality of life they have.

Economic Dualism
This is the existence of two or more industrial or economic sectors in a country,
where one sector is technologically advanced and the other is technologically
backward (retarded).
NOTE: Dual economies are common in less developed countries, where one sector is
geared to local needs and another to the global export market. Dual economies may
exist within the same sector, for example a modern plantation or other commercial
agricultural entity operating in the midst of traditional cropping systems.

Economic Growth and Development

Economic growth
This refers to an all-round expansion of the country’s economy. It is the quantitative
increase in the country’s output for eg increase in the level of output in tourism, sugar
production, road construction, banking services.
Economic development
This refers to the facilities that allow growth to take place for eg the availability of
technology and machinery and for a workforce with appropriate education and skills.
International Trade
Definition
Reasons/benefits of International trade
Important terms
6. Export
7. Import
8. Visible trade
9. Invisible trade
10. Balance of trade
11. Balance of payments
12. Comparative advantage
13. Barriers to trade
- Embargo (ban)
- Tariffs
- Licences
- Quotas
Major Economic Problems of the Caribbean
1. Unemployment
2. Migration – especially brain drain
3. Debt burden
4. Sourcing capital and raw materials
5. Population density – overcrowding – pressure on governments to create jobs,
provide adequate social services
Economic Dualism
This is the existence of two or more industrial or economic sectors in a country,
where one sector is technologically advanced and the other is technologically
backward (retarded).
NOTE: Dual economies are common in less developed countries, where one sector is
geared to local needs and another to the global export market. Dual economies may
exist within the same sector, for example a modern plantation or other commercial
agricultural entity operating in the midst of traditional cropping systems

Solutions to Major Economic Problems of the Caribbean

a. Access to foreign direct investment (FDI)
b. Development of human resources
c. Development of the manufacturing, distribution and export sectors
d. Development of technology to generate economic activity
 Role of Foreign Direct Investments
 Advantages
 Disadvantages

Unemployment
Unemployment is when a person who’s actively seeking employment can’t find work — but its effects go
beyond any one individual looking for a job. Unemployment also has implications for families,
employers, and the economy

Types of Unemployment
 Casual Unemploymest
 Cyclical Unemployment. ...
 Frictional Unemployment. ...
 Structural Unemployment. ...
 Seasonal Unemployment. ...
 Underemployment

Economic Institutions
Find out their role and objectives:
Caricom
CSME
CDB
World Bank
IBRD
IMF
OECS
OAS

Local Economic Institutions

Chamber of Commerce
Manufacturers’ Asssociation