Paul Hawksworth

Level 3 BTEC Business

Unit 1: The Business

Environment
Task 1:
Activity 1 (P1):
The for profit business that I have chosen to research is Milsteda Systems ltd.
The company was set up in the year 2000 with one small rented first floor room
that was used for both warehousing and office work. They have been growing
ever since they now have a total of three warehouses and one office. It is coowned by David Evans and Stephen Hawksworth and is a private limited
company meaning that only certain people are allowed to buy shares as it is not
on the stock market. With being a private limited company it gives them limited
liability. This means that if the company goes into liquidation then the owners
personal belongings are safe and cannot be taken to pay off debts.
Milsteda systems

ltd

offers many services including:

Stock Management
Warehousing
Equipment Installations
Equipment Sourcing
Full Technical Support Services
Network Cabling
Equipment Refurbishment
Updating colour chips
Updating software
Equipment Health checks
Equipment Tracking
E-commerce Web Shop
Design and Manufacture

Activity 2 (P1):
St Barnabas Lincolnshire Hospice is a not for profit business that was set up in
1979 as a charitable trust and first opened in 1982 with four beds in total. It has
been growing since then and now has a total of twenty two shops, two hundred
and eighty employed worker and over one thousand volunteers. St Barnabas
provides specialist palliative and end of life care so that everyone can access and
receive the support they need to live well and ease the process of dying. As it is
a charitable trust it does not have owners however does have a board of trustees
and a chairman. This board of trustees consists of: Tony Maltby, David

Paul Hawksworth

Level 3 BTEC Business

Libiszewski, Ann Daulton, Peter Jordan, Jacky Smith, Keith Darwin, Sue Glaister,
Graham Hale and Tom Murray, with Robert Neilans as chairman.

Sources for P1:

The sources I have used for this task include: http://www.milsteda.info/ and
http://www.stbarnabashospice.co.uk/.

Task 2:
Activity 1 (P2):
Stakeholders are anyone who has an interest in choices made be the business.
Stake holders could include: customers, owners, employees, suppliers, trade
unions, pressure groups, employer associations, local communities, national
communities and the government.

Milsteda:
The company has over 2000 customers across the UK and Europe; these
customers are interested in the choices made by Milsteda Systems Ltd for many
different reasons. For example customers are interested in price changes
because if the prices increase then they may wish to search for a new
supplier/service. However if the prices decrease they will make more profit
meaning they may be able to expand increasing their profit once more. Another
reason they will be interested in is if Milsteda chooses to expand for example
spreading warehousing across the country. This will affect customers as shipping
costs may be decreased on products, meetings will be closer and engineers will
be able to reach them quicker. Finally customers will be interested in new and
improved products as this will enhance their business to increase their revenue.
The owners/directors of the business (Steve Hawksworth and Dave Evans) are
also stake holders. Although they are the ones making the choices they have to
choose their decisions very carefully as the choices they make affect them
directly as well as their families. For example the more profit the company makes
the more money they will earn meaning their family will have a better life.
Milsteda has over 50 employees in total and therefore each and every one is
interested in any choice made by the company. The reason for this is because
any choice will affect the employee and their family. For example if the company
begins to get more business and custom then the employee will receive more
work and therefore their wages may increase. Alternatively the company may
begin to lose business and custom and as a result cut the budget or shut down
an area. This will mean that certain employees may lose their jobs or their salary
could be cut. In order to try and keep their job the employees try and work
harder than other to try and make a good impression and make their employer
keep them.

Paul Hawksworth

Level 3 BTEC Business

Furthermore the companys has many suppliers such as RS components, S&H

Italy and Sartorius. All of these will be interested in decisions made by the
directors, for various reasons. These reasons could include the fact that if the
company expands then the supplier will have more custom from then on the
down side this could generate competition from closer supplier. On the other
hand if Milsteda chose to pull out of an area then their suppliers would lose
business resulting in them potentially having to cut their budgets.
The penultimate stakeholder for Milsteda Systems ltd is the government and the
local council. They are interest for two main reasons, tax and unemployment
levels. The amount of tax the company pays depends of the size of the company
and the amount of money they make a year. For example the more money they
make and the larger they are the more tax they have to pay to the government.
Another issue the government are interested in are the unemployment rates.
One example of this that, as Milsteda grows more the more jobs that will open
up, this will mean that the unemployment rates will go down.
This will have the same effect on the local council and the local and national
communities are also interested for the same reason. Milsteda is not involved
with any trade unions or employer associations so therefore they are not a form
of stakeholder for this particular business. Furthermore certain pressure groups
may be interested in the decisions made by Milsteda, for instance environmental
associations. Environmental associations may be interested if the company
expands for the bigger the company is the more pollution and waste they will
produce.

Lincolnshire St Barnabas Hospice:

Lincolnshire St Barnabas Hospice tends to thousands of patients a year across
Lincolnshire and Nottinghamshire; these customers are interested in the choices
made by the board of trustees and management team for many different
reasons. For example patients are interested in any new equipment changes
because the equipment will mean better care for them and they will feel more
comfortable at the hospice meaning their friends and family may donate more or
volunteer. However if the hospice begins to lose money then they may not be
able to pay bills or staff meaning they will have to downsize. This will continue in
a downward spiral until the hospice is no longer getting enough donations to run
and will eventually be forced to shut down.
As the Lincoln St Barnabas Hospice is a charitable trust it does not have owners
but does have directors. The business in question is run by the board of trustees
and below them a board of directors as these two groups make the decisions
they are major stakeholders in the hospice. The reason for this is that the
decisions made will affect them and their families directly. Due to this affect they
will take extra care in ensuring that they choose their decisions carefully to do
what is best for both themselves and the business. If the company takes a turn
for the worst then they will have to lower their own salary meaning that they will
have less money to look after their families and therefore leading a less
3

Paul Hawksworth

Level 3 BTEC Business

privileged life. On the other hand if the business begins to expand then their
salary good increase this will mean that they will have more money to improve
their own and their family's life.
Lincoln St Barnabas employs various people in each of its departments. Each
single employee is a stakeholder for their own personal reasons however one
common reason for all of them is that when the business make a beneficial
decision it can give the opportunity to expand. As a result of this the employees
may be given more work or given a promotion as positions appear higher up that
may come with control of other lower employees. This form of promotions will
more than often come with a raise in salary and potential bonuses at the end of
months, quarters or years. On the other hand if the company begins to lose
money this could cause issues such they may be forced to release certain
members of staff, or shut down department. Consequently the staff will work
harder to convince theyre superior to keep them under employment.
Furthermore the companys has many suppliers such as in all fields from medical
to catering. All of these will be interested in decisions made by the directors and
trustees, for various reasons. These reasons could include the fact that if the
business expands then the suppliers will have more custom from then on the
down side this could generate competition from closer supplier. On the other
hand if Lincoln St Barnabas Hospice choose to pull out of an area then their
suppliers would lose business resulting in them potentially having to cut their
budgets. These suppliers will have a high amount of influence on the decisions
made by the company for various reasons. The most important of these reasons
in the eyes of the directors and trustees is that the happier the suppliers are the
better the offers and prices will be the Lincoln St Barnabas Hospice offered.
The penultimate stakeholder for the Lincoln St Barnabas Hospice is the
government and the local council. They are interest for one main reason;
unemployment levels. The government are interested in are the unemployment
rates for many reasons. One example of this that, as the Lincoln St Barnabas
Hospice grows more the more jobs that will open up, this will mean that the
unemployment rates will go down. The government as stakeholders have the
highest influence of all the groups. This is because if the business keeps the
government happy then they may receive grants and benefits to ensure growth
within the charity and business.
This will have the same effect on the local council and the local and national
communities are also interested for the same reason. The Lincoln St Barnabas
Hospice is not involved with any trade unions or employer associations so
therefore they are not a form of stakeholder for this particular business.
Furthermore certain pressure groups may be interested in the decisions made by
the Lincoln St Barnabas Hospice, for instance environmental associations.
Environmental associations may be interested if the company expands for the
bigger the company is the more pollution and waste they will produce.

Sources for P2:

4

Paul Hawksworth

Level 3 BTEC Business

The sources I have used for this task include: http://www.milsteda.info/,

http://www.businessballs.com/ and http://www.stbarnabashospice.co.uk/.

Activity 2 (M1):
Milsteda Systems

ltd

Milsteda Systems ltd was set up in order to aid companies that are involved with
the operations in car paint body shops. In particular they install, maintain and
update both hardware and software for companies such as DuPont and BASF for
brands such as BMW and Austin Martin. They take pride in doing everything they
do to the highest standard possible, this can be seen in their business statement:
We pride ourselves on our professionalism and customer service. Whatever the
issue, Milsteda Systems take the headache out of your problems, while offering a
flexible yet professional approach to supporting your business. We strive to
provide a first class service, which in turn helps you to promote and sell your
products.
Each of the stakeholders will have different amounts of influence on the
companys decisions. For example the customers opinions will have a large
influence on the companys choices as they will want to keep their customers
happy. Furthermore the directors will have influence as they have authority and
make the final decision on any voice and will want to ensure their families future.
Employees will also be an influence on the decisions made by the company for
many reasons the main reason for this is that the company must ensure to keep
their employees happy. This is so that they keep the productivity of the company
to the highest it can be. Moreover the suppliers will have a high amount of
influence on the decisions made by the company for various reasons. The most
important of these reasons in the eyes of the directors is that the happier the
suppliers are the better the offers and prices Milsteda Systems ltd will be offered.
In addition the government as stakeholders have the highest influence of all the
groups. This is because if the business keeps the government happy then they
may receive grants and benefits to ensure growth within the company. Finally
both the local council and the surrounding communities also have a high
influence on the decisions made. One reason for this is that if the local council
and community think highly of the company then they will get more positive
publicity.

Lincoln St Barnabas Hospice:

The Lincoln St Barnabas Hospice was initially set up to help those who have lost
or are losing someone to death. They also give people who are in the process of
dying. Their main aim is to try and ease the process. They do this by taking
people who have terminal illnesses into care and help the family and friends in
any way they can. We can see this from their mission statement:
St Barnabas provides specialist palliative and end of life care so that everyone
can access and receive the support they need to live well and ease the process
5

Paul Hawksworth

Level 3 BTEC Business

of dying. Honouring life by providing treatment, care and comfort to those we

serve.
Each of the stakeholders will have different amounts of influence on the charitys
decisions. For example the patients opinions will have a large influence on the
businesss choices as they will want to keep their patients happy. Moreover the
directors and trustees will have a massive amount of influence as they have
authority and make the final decision on any voice and will want to ensure their
families future. Employees will also be an influence on the decisions made by the
company for many reasons the main reason for this is that the company must
ensure to keep their employees happy. This is so that they keep the productivity
of the company to the highest it can be. In addition the suppliers will have a high
amount of influence on the decisions made by the company for various reasons.
The most important of these reasons in the eyes of the directors and trustees is
that the happier the suppliers are the better the offers and prices will be the
Lincoln St Barnabas Hospice offered. Furthermore the government as
stakeholders have the highest influence of all the groups. This is because if the
business keeps the government happy then they may receive grants and
benefits to ensure growth within the charity and business. Finally both the local
council and the surrounding communities also have a high influence on the
decisions made. One reason for this is that if the local council and community
think highly of the company then they will get more positive publicity.

Sources for M1:

The sources I have used for this task include: http://www.milsteda.info/,
http://www.businessballs.com/ and http://www.stbarnabashospice.co.uk/.

Activity 3 (D1):
Milsteda System ltd and their stakeholders have to depend on each other for
many reasons. This means that they have an effect on each other in different
ways depending on each others decisions and actions. For example if Milstedas
suppliers do not complete order in time it would affect the business in a many
ways. One example of this is them not being able to get the sales that they may
want or need in order to stay a healthy company. Furthermore if their customers
did not buy from them often enough, it would affect the business because they
would have a lower chance of growth, due to making less profit or potentially
even making a loss.
Milstedas customers influence the company because they ensure the company
generate a decent amount of revenue and make a profit. The customers also
ensure that the business can grow and stay healthy in both the market sectors
and business districts. Furthermore they bring all the money into the company.
This means that the more money the customer put in then the more likely the
business would be able to grow and have a higher profit. On the other hand if
they had less customers this would be a must harder and slower. If Milsteda
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Paul Hawksworth

Level 3 BTEC Business

Systems ltd did not have customers then they would be not be able to exist, this
is because all companies rely on their customers to bring in money, provide a
profit, and give them the opportunity to growth. Customers are one of the very
few main factors that ensure a companys success. Furthermore without the
customers there would be no point of having the company as they would make
no money.
Milsteda systems ltd as employers influence themselves because they employ
certain people they think are right for the job. They also make sure that each
person that signs up for a job, meets their criteria (this depends on the job in
question) before they are given the job. Furthermore Milsteda ensure that they
will only employ the best people to do that job, this ensures the best possible
outcome. For instance they will look for requirements. These could include: that
they are organised, they work well both in a team and individually, and what
qualifications they have. If Milsteda Systems ltd did not act as employers then the
company would gain no staff, meaning that they would have no workforce. This
would then result in the company not being able to function properly. Finally this
would mean that the business would not be able to complete jobs and would
therefore lose customers resulting in the company going into liquidation.
Suppliers are also a large influence on a company such as Milsteda Systems ltd.
This is because they ensure that the materials and products get to the
companys site as quickly as possible. The reason for this is to meet the demand
of their customers and keep them happy. Suppliers such as RS Components
ensure that the service they provide is fast, reliable, and simple. This can
influence Milsteda because they will see this as a good sign and keep buying
from the same supplier. This then builds up trust and a partnership may be made
which can bring in benefits for the business. For instance if the supplier had an
order in for the next day with a lot of stock, and they delivered it on time, both
Milsteda and their customers would be very happy. If suppliers did not deliver on
time then Milsteda could gain a bad reputation from customer reviews, which
then leads to loss in sales. This is due to the fact that less people would choose
not to buy products or choose their services. Furthermore they could gain a low
customer satisfaction rate, resulting in less products getting made. This would
then cause a hold up in the manufacture line. The company would also lose
money if their suppliers did not do their job properly, due to less sales being
made.
The owners and directors of Milsteda Systems ltd (Steve Hawksworth and David
Evans) have a huge influence of the company because they decide what the
business can and will do, leading to what they will achieve. For example they
decide what things need to be done, for the business to get the maximum
potential out of the company. They can decide what things need to be done like
what money will be spent and what it will be spent on. Shareholders also do this
because they have a say in what the company does because they have shares of
it. If the owners did not participate in the company decisions would not be made.
This would result in company going downhill, losing reputation and therefore
having a fall in sales due to a loss in customers. If the owners did not have any
7

Paul Hawksworth

Level 3 BTEC Business

say, the company would be in so much debt, and be an uncoordinated mess. This
would end up in loss of money and them being shut down.
Furthermore local and national communities affect Milsteda. This is because they
either work for or supply company with materials and resources they need, this
will include people working in car garages or working in car factories for Milsteda
to install their software and hardware into. They also influence them because
they are a big part in the scale of making Milsteda what it is today. They supply
them with skilled workers and business partners. Also these communities bring
money into the company and economies far and wide. If Milsteda did not have
local and national communities surrounding them they would not be as
successful. This is due to less money flowing into the company and less workers
making money. Which in turn will put it either back into the economy or the
company.
Finally the government influence Milsteda because they give the company rules
and regulations that they have to abide by and follow. Moreover they also make
sure that what they are doing overseas is legal, and the money goes back in to
the UKs economy. Also that the manufacturers and companies they work with
and for have to also abide by the same rules. If they do not listen to the
government then the government would have to take legal action, such as taking
them to court. This would result in Milsteda losing out on profit and potentially
being shut down. If the government was not an influence they would not have to
abide by any laws, not get any money from them, and make big mistakes such
as importing the wrong goods. This would be bad because their reputation would
fall and therefore less customers and profit.

Sources for D1:

The sources I have used for this task include: http://www.milsteda.info/,
http://www.businessballs.com/ and http://www.stbarnabashospice.co.uk/.

Task 3 (P3 & P4)

Organisational structures are the typically hierarchical arrangement of lines of
authority, communications, rights and duties of an organization. Organizational
structure determines how the roles, power and responsibilities are assigned,
controlled, and coordinated, and how information flows between the different
levels of management.
Span of control the area of activity and number of functions, people, or things for
which an individual or organization is responsible.
A hierarchical business structure would mean that the chain of command looks
like a pyramid, with a large base of workers, who are directly supervised by the
smaller level above them, who are in turn supervised by the level above them,
continuing on to the top ranking officer such as the company President

Paul Hawksworth

Level 3 BTEC Business

Milsteda:
Like any other private limited company Milsteda System ltd has an organisational
structure to show who has authority and who has what responsibility. Starting at
the top of the structure we have the Directors (Steve Hawksworth and Dave
Evans) these are co-owners of the business and therefore joint authority over
everyone else in the company. As a result of this authority they also have
responsibility over the actions of the other staff. Below them comes the Manager
(Andy Lawson) he has authority over everyone below him and therefore also has
responsibility over their actions however he has to report to the directors and
can only act with their permission. Under him we then have Senior Technical
Support (Rus Edwards) and Accounts and Office Admin (Michelle Rushby). These
two have authority over the standard staff in all departments and therefore have
a certain amount of responsibility. However once again have to report to their
superior (the manager). Finally we have the standard staff in each different
department (workshop staff, technical support, field engineers and general
admin). These groups do not have any authority in the business and are only
responsible for their own actions and have to report to the manager and in some
cases their head of department.
As is shown in the diagram below Milsteda is organised and divided up into
departments. Milstedas admin along with call centre work is all done internally
within the office by the admin and tech support teams. Furthermore Milstedas
production is also all conducted within the company by the workshop staff. The
business has its own fleet of vans which are uses for delivery and the supply
chain. However for larger deliveries they use UPS and DPD.
Each of the departments and positions of Milsteda Systems ltd are required to
work together in order for the company to function correctly and run smoothly.
For instance the field engineers must work with the workshop staff, which is
because the workshop staff are the ones that manufacture and build the
equipment that the field engineers are employed to maintain and fix. This means
that the workshop staff are required to give reports to the field engineers on the
specifications of the equipment and the most common faults that occur. Another
example of this is between the admin staff, the manager and both directors. The
interaction between these is extremely important as it involves the accounts of
the business, the companys profits and losses and in turn the overall
successfulness of the business. However the most important interaction between
departments of the company is that of all the departments and the manager.
This is extremely important because this means that the manger can ensure that
the company is running smoothly and everyone is doing their jobs correctly as
they should be. Furthermore this then in turn equates to the manager reporting
to both of the directors so that they know that their customers are going to be
happy with the service that Milsteda Systems ltd are providing. Each of these
interactions between departments play an important part in ensuring that the
company runs smoothly and as it should.

Paul Hawksworth

Level 3 BTEC Business

Director (Steve
Hawksworth)

Director (Dave
Evans)

Manager (Andy
Lawson)

Senior Technical
Support (Rus
Edwards)

Workshop Staff

Accounts/Office
Admin (Michelle
Rushby)

Technical
Support

Field Engineers

General Admin

Lincolnshire St Barnabas Hospice:

Similarly to Milsteda the Lincolnshire St Barnabas Hospice has a hierarchy to
show who has authority and who has what responsibility. Starting at the top of
the structure we have the Chairman (Robert Neilans) although he does not own
the trust he does run the trust meaning that he has authority over everyone else.
As a result of this authority he also has responsibility over the actions of the
other staff and volunteers. Below him are the Trustees (Tony Maltby, David
Libiszewski, Ann Daulton, Peter Jordan, Jacky Smith, Keith Darwin, Sue Glaister,
Graham Hale and Tom Murray) they have joint authority over everyone below
them and therefore also have responsibility over their actions however they have
to report to the chairman and can only act with his permission. Under them we
then have the Chief Executive (Sarah-Jane Mills); she has authority over the
department directors and therefore has a certain amount of responsibility.
However once again she has to report to her superior (the trustees). Below her
are the department directors (Andy Kutarski, Jane Bake and Sally Cheetam).
These three have authority over the standard staff in all departments and the
volunteers and therefore have a certain amount of responsibility. However once
again have to report to their superior (the chief executive). We have the standard
staff in each different department (Medical, Patient Care, Finance and
Performance) These groups only have authority over the volunteers and have to
report to their departments director. Finally we have the volunteers staff in each
different department. This group does not have any authority in the business and
are only responsible for their own actions. They have to report to the manager
and in some case their head of department.

10

Paul Hawksworth

Level 3 BTEC Business

As is shown in the diagram below the Lincolnshire St Barnabas Hospice is

organised and divided up into departments. Lincoln St Barnabas hospice
conducts all admin and call centre work internally through their finance
department. Furthermore they do not produce or deliver anything and therefore
do not need any external services in the area.

Chairman
(Robert
Neilans)
Trustees

Chief Executive
(Sarah-Jane
Mills)

Medical
Director (Andy
Kutarski)

Director of
Patient Care
(Jane Bake)

Medical Staff

Patient Care
Staff

Director of Finance
and Performance
(Sally Cheetam)

Finance Staff

Volunteers

Sources for P3:

The sources I have used for this task include: http://www.milsteda.info/,
http://www.businessballs.com/ and http://www.stbarnabashospice.co.uk/.

Sources for P4:

The sources I have used for this task include: http://www.milsteda.info/,
http://www.businessballs.com/ and http://www.stbarnabashospice.co.uk/.

11

Performance
Staff

Paul Hawksworth

Level 3 BTEC Business

Task 4:
Activity 1 (P5):
An economic factor is something that involves and effects a company directly
and is to do with the money that come in and out of the business. Economic
factors that will effect a company could include: The economy, pay levels, cost of
credit, competitive pressure, globalization, energy prices, supply and demand of
labour, inflation, company law, employment law, competition law, consumer
protection, data protection, demographic issues and education.

The
Economy

Pay
Levels

Cost of
Credit

Competit
ive
Pressure

The term economy is the state that a country or region is in. This is in terms of its
production and consumption of goods and services. It also relates to the supply of
wealth flowing in and out of the countrys treasury. This affects the Milsteda
Systems ltd in many ways. For example if the economy is running smoothly and is
stable then taxes will be at a stable and reasonable rate. This means that the
business will be able to make more profit as the government is taking less money
from them and out of their turn over. However if the economy take a turn for the
worst and we enter another recession, then taxes will increase and the company
will not make as much profit as more money is being taxed form their turn over.
Pay levels are the different salary rates that are paid to each of the different roles
and jobs within a company. The effect Milsteda in various ways the main being the
amount and types of people they employ. The business has a variety of different
skilled people under employment, for example they have people working in their
warehouses that have no qualifications. These jobs are paid poorly at minimum
wage. On the other hand they also employ highly skilled workers in the form of
managers or engineers, these jobs are paid well and above the minimum wage.
The government can affect these pay levels by either increasing or decreasing the
rate of minimum wage. This will mean that everyones salary will either increase
or decrease, resulting in an increase or decrease in the businesss profit.
The cost of credit is how much money the country and people in it have readily
available. Once again this has a huge effect on Milsteda Systems ltd for two main
reasons. One of these reasons is to do with their customers. Cost of credit effects
the companys customers because if the current cost of credit means that there is
less money readily available then Milsteda will have to decrease their prices in
order to keep custom and compete with companies giving the same services. In
turn this will also decrease the amount of profit they make. The other main reason
is to do with their suppliers. For instance depending on the current cost of credit
their suppliers prices may increase or decrease. This will then either give the
company to increase their profit or begin to make less profit.
The term competitive pressure is used to describe the competition for custom
between companies that provide either the same or a similar service. This
competition will have an effect on Milsteda Systems ltd in various ways. One of the
effects it may have is that each of the competing companies will be constantly
trying to charge less than their competitors. This may mean that Milsteda will
have to reduce their prices to keep up with the other companies and maintain
their current amount of custom. Another way in which each of the businesses will
compete with the others is by trying to give a better service than the rest. This
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Paul Hawksworth

Globalisa
tion

Energy
Prices

Supply
and
Demand
of Labour

Inflation

Company
,
Employm
ent and
Competit
ion Laws

Consume
r and
Data

Level 3 BTEC Business

will mean that Milsteda will have to try and increase their service and job quality
or they will lose their customers.
Globalisation is the process of a business expanding on a multi-national scale.
This will have many benefits for the business. For example if the company
expands into Europe as well as the UK then this will increase their custom and in
turn then increase their turnover and profit. Furthermore it will also give them
access to more and potentially cheaper suppliers and distribution services. This
will then once again increase their profits. Finally if they operate in more than one
country, then their reputation will increase which will make them well known
across the globe, making it easier to expand further and collect more custom.
Energy prices are as the name suggests the prices in which energy costs. This
energy can be in the form of either electricity, oil, coal or gas. Depending on these
prices the company will be able to convert either more or less of their turnover
into profit. For instance if the prices of energy are low then it means that the
company will not have to spend as much on them meaning that more of their
turnover will become profit. On the other hand if the prices of energy are at a high
then the business will have to spend more on them meaning that less of their
turnover will be collected as profit.
Supply and demand of labour is the term used to describe the amount of people
that are needed and the amount of people that are available to employ and
complete a job. This will affect Milsteda in many ways. For example if Milsteda
gains a new business contract that requires a large work force and there is not
many people available to employ then the company may have to let the contract
go. On the contrary if there is a wide range of people available to employ then
Milsteda will be able to choose the best people and give the best service to keep
the contract in future years.
Inflation is a general increase in prices of goods and commodities. This has huge
effects on Milsteda Systems ltd in many ways. For example when inflation occurs
less of the companies turnover can be turned in to profit. This means that the
business will lose money and will potentially have to make staff redundant and or
close parts of the company down. This can eventually lead to the business going
into liquidation and closing down if it is not dealt will in the correct manor and
controlled.
Company, employment and competition laws are all government legislations and
rules that Milsteda must stick to in order to avoid prosecution. These laws and
legislations have large effects on the company. This is due to the fact that it limits
what the business can do and when. If Milsteda does not stick to these then they
can be fined or even shut down on the authority of the government. Employment
law ensures that the companys employees are treated fairly and to a certain
standard set by the government. Company law ensures that the company
completes its services to a certain standard and that all their assets such as their
vehicles and buildings comply with the set requirements. Finally competition law
is a law that aims to ensure that all competition is fair and that no malicious
behaviour occurs between rival companies.
Consumer and data protection are also government legislations and rules that
Milsteda must stick to in order to avoid prosecution. These laws and legislations
have large effects on the company. This is due to the fact that it limits what the
13

Paul Hawksworth

Protectio
n

Demogra
phic
Issues

Educatio
n

Level 3 BTEC Business

business can do and when. If Milsteda does not stick to these then they can be
fined or even shut down on the authority of the government. Milsteda Systems ltd
must comply with the data protection of 1998. This means that they must protect
all of their employees and customers data and not use it for their own gain.
Consumer protection is when the company must comply with consumer protection
act of 1987. This means that their customers are protected against unfair sales.
Demographic issues refer to the demographic transition model. The demographic
transition model compare the birth rate and death rate of a country. Stage one is
when the population is balanced but is low, this is due to a high death rate and a
high death rate. Stage two is when the population is increasing as death rates fall
and birth rates remain high. Stage three is when population is still increasing but
the gap between birth rates and death rate closes and birth rates fall. Stage four
is when the population is balanced but high as both birth rates and death are low.
Finally stage five is when the population begins to go into a decline as the death
rate is lower that the birth rate. Most modernised countries are in stage four
meaning that the company will have a lot of both customers and work force to
choose from.
The quality of the workforce that Milsteda employs will depend on the education
standard in the area. For example if the area is producing highly skilled workers
then the companies employees will be highly skilled this means that the company
will be able to provide a better service for their customers. However if the
education in the area is poor then the business will provide a low standard of
service and may then lose customers to a rival company.

Activity 3 (P6):
A political and legal factor is something that involves and effects a company
directly and is to do with the government and the area they are operating in.
Political and legal factors that will effect a company could include the data
protection act of 1998 and the consumer protection act of 1987. A social factor is
something that involves and effects a company directly and is to do with the
community in the area they are operating in. Social factors that will effect a
company could include education and demographic issues.

Consume
r
Protectio
n Act of
1987
Data
Protectio
n Act of
1998

Consumer protection is a government legislation and rule that Milsteda and the
Lincoln St Barnabas must stick to in order to avoid prosecution. This legislation
has a large effect on the companies. This is due to the fact that it limits what the
business can do and when. If Milsteda or the Lincoln St Barnabas does not stick to
these then they can be fined or even shut down on the authority of the
government. Consumer protection is when the company must comply with
consumer protection act of 1987. This means that their customers are protected
against unfair sales or services.
Data protection is also a government legislation and rule that Milsteda and the
Lincoln St Barnabas must stick to in order to avoid prosecution. This legislation
has a large effect on the companies. This is due to the fact that it limits what the
business can do and when. If Milsteda and the Lincoln St Barnabas does not stick
to these then they can be fined or even shut down on the authority of the
14

Paul Hawksworth

Demogra
phic
Issues

Educatio
n

Level 3 BTEC Business

government. Milsteda Systems ltd and the Lincoln St Barnabas must comply with
the data protection of 1998. This means that they must protect all of their
employees and customers data and not use it for their own gain.
Demographic issues refer to the demographic transition model. The demographic
transition model compare the birth rate and death rate of a country. Stage one is
when the population is balanced but is low, this is due to a high death rate and a
high death rate. Stage two is when the population is increasing as death rates fall
and birth rates remain high. Stage three is when population is still increasing but
the gap between birth rates and death rate closes and birth rates fall. Stage four
is when the population is balanced but high as both birth rates and death are low.
Finally stage five is when the population begins to go into a decline as the death
rate is lower that the birth rate. Most modernised countries are in stage four
meaning that the companies will have a lot of both customers and work force to
choose from.
The quality of the workforce that Milsteda and the Lincoln St Barnabas employs
will depend on the education standard in the area. For example if the area is
producing highly skilled workers then the companies employees will be highly
skilled this means that the company will be able to provide a better service for
their customers. However if the education in the area is poor then the businesses
will provide a low standard of service and may then lose customers to a rival
company.

15