Environmental influences - External factors - Political factors

9 important questions on Environmental influences - External factors - Political factors

What are factors that likely challenge organisations in the near future?

  • The unification of Europe
  • Shift in political power

How can an economic union be created?

By having the Member States merge their national economic and political institutions to a large extent.

Why is a free trade zone necessary?

To prevent products being imported via the country with the lowest import tariffs. An example of a free trade zone is NAFTA (North American Free Trade Agreement).
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What is Economic union?

Economic union means that the monetary policy and financial government politics are also in harmony. This step requires that central institutions, such as a single Central Bank, be implemented.

What is complete political and economic union?

This is the situation where independent states or countries merge completely.

Within the European Union, there is a common internal market. This common market is based on four economic freedoms. Which are the four economic freedoms?

  1. Freedom of movement of goods
  2. Freedom of movement of services
  3. Freedom of movement of capital
  4. Freedom of movement of people

What significant consequences will the unification of Europe have for many organisations?

Increased competition will put pressure on production costs, which in turn will lead to a fall in prices. Lower prices generate increased turnover, which leads to economies of scale, and possible business expansion. Larger scale production makes innovation and R&D expenditure viable which, of course, is likely to result in the production of goods that better meet customer needs and are easier to sell. It is a chain reaction that supports the strengthening of Europe's position in relation to its competitors.

Which obstructions need to be removed before Europe can become a truly open internal market?

  • Physical obstructions
  • Technical obstructions
  • Fiscal obstructions

What are small to medium enterprises (SME)?

Private companies of fewer than a hundred employees. Having more than a hundred employees means a company is qualified as large.

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