Leaving Cert Business Syllabus
Unit 6. DOMESTIC ENVIRONMENT
Objective: To enable students to understand the interaction between business firms, the local
community, the Government and the economy.
6.1
Categories of industry
Agriculture, manufacturing, services and natural resources
Changing trends in business
Primary Sector;
 Extractive industries that are based on natural resources both renewable and nonrenewable.
 8% of workforce is in the primary sector.
Agriculture
 Very important to Ireland’s economy, we have a good climate and good soil ideal for
agriculture.
 Produce, raw materials for food, milk, beef, lamb, bacon, poultry, grains, roots crops
and veg.
 Low pollution and green image supports our marketing campaign.
 EU Support, CAP; subsidies, minimum prices and guaranteed markets.
Problems
 CAP supports changing (decoupled payment from production)
 Irish farms small this creates difficulty in competing with large farms abroad.
 Vulnerable to weather conditions and disease
 Consumer concerns about pesticides and growth promoters
Trends
 Fall in employment due to mechanisation and a movement away from land.
 EU encouraging older farmers to retire an pass farms to younger farmers
 Many have to have a second job to support their income
 Farmers diversifying into new enterprises i.e. trees, rape seed organic produce.
 REPS, Rural Environment Protection Scheme pays grants to preserve the agri
environment.
 Development of non-farming enterprises, tourist accommodation, open farms, horse
riding, cheese making etc.
Fishing
 Ireland has fish rich waters but fishing is on a small scale, other EU countries have the
right to fish our waters.
 Produce, sea fish, shellfish and farmed fish such as trout and salmon.
 EU Irish fishermen have quotas/restrictions on the size of catches.
Problems
 Overfishing has brought some species to a low level.
 Irish boats are small and find it difficult to compete as they cannot travel long
distances for big catches.
 Consumer fears of pollution, particularly nuclear pollution in the Irish sea.
Trends
 New species that have no quotas are being fished.
Secondary sector;
 Construction and manufacturing industries, which are labour intensive and until
recently construction was a huge employer in Ireland.
 Construction involves building houses, apartments, industrial buildings and
infrastructure such as roads bridges tunnels and pipelines.
 Manufacturing converts raw materials into finished goods i.e. food, drink,
pharmaceuticals, chemicals, electronic and computer products.
 29% of workforce is in the secondary sector.
Manufacturing in Ireland includes
Agribusiness, firms involved in supplying products to farmers e.g. fertilisers. Or in
manufacturing products based on farm produce e.g. milk, beef or grains.
Transnational corporations, head office in one country but operate in lots of different
countries, e.g. CHR Cement Roadstone Holding an Irish company that has operations in 75
countries. Know the benefits and problems associated with TNC’s, the factors that attract
them to Ireland and the role of the IDA.
Indigenous firms, Irish owned and producing goods and services in Ireland. Supported by
Enterprise Ireland, most indigenous firms are SME small or medium size enterprises. Know
benefits, problems, assistance and agencies that proved it.
Problems
Construction is subject to fluctuations in activity as the economy slows down. Skilled
workers can be difficult to find when the construction industry is in growth.
Manufacturing, Agribusiness is small scale and faces competition from larger foreign
companies, vulnerable to takeover by larger foreign firms. Spending in R&D has been low,
competition from EU’s open market. Power of multiples often forces suppliers to accept low
prices.
TNC’s less rooted in Ireland, if the close local community can be hugely negative.
Repatriation of profits to home country, over dependence on TNC’s.
Trends
Construction; foreign workers and companies have come to Ireland during the growth
period.
Manufacturing; World class manufacturing, investment in R&D, high technology sector
being developed (computers and communications).
Tertiary Sector;
 Service industries for firms and consumers e.g. banking, travel, tourism, design,
advertising, transport, professional services leisure and catering.
 64% of workforce is in the tertiary sector.
Trends
 Increase in leisure and entertainment services.
 Development of ICT, broadband, mobile phones etc.
 Telecentres/call centres, staff deal by telephone with sales enquires, consumer
services.
 Growth of education design, consultancy and financial services.
 Childcare services as both parents work outside the home.
6.2 Types of business organisation
Choosing between alternatives:
Sole trader, partnership, alliances, franchising, private limited companies, transnationals,
Public limited companies, co-operatives, state-owned enterprises and indigenous firms
Be capable of defining each, formation procedure, features, advantages/benefits and
disadvantages/drawbacks
Changing trends in ownership and structure
Change happens to suit their needs, know the reasons and remember how they usually
grow(Capital, expertise & skills risk, workload, limited liability, continuity of existence,
reach international markets, economies of scale, privatisation).
6.3 Community development
Define, know the aim, and know viable communities.
Local community and business
How do businesses help?
 Secure jobs and incomes
 Boost retail business
 Local purchasing
 Creates wealth
 Encourages infrastructure improvement
 Rise in standard of living
 Sponsoring local events and charities
 Stability for the future
Incorporating local community initiatives
Steps in community development process,
1. Meeting of interested parties
2. An association is established
3. Research is conducted to identify problems and set goals
4. Resource audit
5. Projects are identified and prioritised
6. Contact state agencies for advice, training and finance (what agencies support, County
enterprise boards, Area Partnership companies, Leader plus programme, FÁS, Failte
Ireland, business innovation centres)
7. If successful in getting funding
Problems/drawbacks/challenges/difficulties’
Lack of expertise, finance, management skills, marketing difficulties, regulations and
planning permission, local disagreement.
6.4
Business and the economy
Free market economy, problems with free market/government intervenes; Mixed economy
(public vs. private sector).
Why Governments intervene
1. Regulate nationally (laws under which business and individual conduct themselves)
2. Regulate locally (by-laws for planning/traffic)
3. Enforce existing laws (data protection)
4. Protect individuals and businesses (i.e. sale of goods and supply of services Act 1980,
E.P.A.
5. Government departments provide services such as education health
6. Local authorities’, waste management, water supply.
7. Provision of infrastructure
8. A fair distribution of wealth, taxation and spending policy
9. Regional development policy, BMW
The impact of the economy on business, taking into account the general state of the economy,
inflation, interest rates, tax and grants
Economic variables
1. Unemployment – high unemployment = reduced demand = less money = less tax revenue
and VAT = increased government spending (S/W) = low standard of living/quality of life
= social problems
2. Interest rates – ECB sets rates for euro zone, high interest effects businesses cost of
borrowings = negative on cash flow. Reduces demand as households have less income.
Restricts expansion
3. Inflation – price of goods rising = high wages (wage price spiral) = exports less
competitive in international market. Loss of confidence and unwillingness to invest.
4. Taxation – taxes on employees (PAYE, PRSI, USC) = demand for higher wages for
higher take home pay.
 Prices of goods and services increase b/c of VAT = reduced demand and lower
standards of living.
 Household taxes reduce spending power i.e. income tax, PRSI, VAT, excise
duties etc.
 Company taxes remove incentive to expand or set up in Ireland or to work in
Ireland.
5. Exchange rates – outside Eurozone exchange rates can fluctuate constantly making
trading unpredictable for gains/losses. When currency falls exports and tourism is
cheaper, imports are dearer
The impact of business on the economy at local and national level, taking into account
employment, tax revenues and environmental issues
Local jobs impacts national level, reduces government spending on welfare, increases
government revenue, improves infrastructure and environment
The interaction between business and the wider economy
Covered in community dev and impact of government and economy
6.5 Government and business
An introduction to the Government's role in encouraging and regulating business.
Government creating a suitable environment for business
1. Low interest rates – reduces borrowing, allows for expansion
2. Low inflation – prices competitive for exports, allows for lower wages
3. Low unemployment – boost spending, reduce social welfare payments
4. Low taxes – on profits = investment, on wages = working, goods = more spending
5. Stable exchange rates – facilitates foreign trade
Low corporation tax encourages FDI
Government planning creates infrastructure and stability for FDI
Partnership programme /national wage agreements, state and semi state bodies support
businesses, (why the state set up these bodies, drawbacks of state bodies and privatisation pro’s
and con’s) PPP and urban renewal
State agencies that support business, IDA, Enterprise Ireland, FAS, LRC and LC
Role of the Government as employer
Biggest employer approx. 300,000 people employed as teachers, Gardaí etc.
They also indirectly employ many in construction of infrastructure
Services e.g. and goods such as furniture and stationery
6.6 Social responsibilities of business
Ethical business practice
Define ethics
As well as responsibility to stakeholders business have a responsibility to wider society
 Employees, H&S, wages, dignity
 Investors, profit, car for assets, no excessive payment to top people, report honestly on
a/c, comply with co. law, work within memo and articles.
 Customers, safe products, quality, respond to complaints,
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Suppliers
Local community
Government
Society
Socially responsible business at local and national level
6.7 Outcomes
On completion, the student should be able to:
6.7.1 recognise and illustrate the categories of industries and their contribution to the domestic
economy;
6.7.2 recognise the types of business organisation;
6.7.3 compare and contrast the different types of business organisations;
6.7.4 explain why businesses change their organisational structure over time;
6.7.5 identify the importance of community initiatives in the development of the local economy;
6.7.6 explain the impact of the economy on business;
6.7.7 explain the impact of business in the development of the economy;
6.7.8 identify important environmental issues in business;
6.7.9 list the ways in which the Government creates a suitable climate for business.
6.7.10 explain the ways which the Government affects the labour force;
6.7.11 define ethical business practice;
6.7.12 describe the characteristics of an environmentally conscious company (HL);
6.7.13 analyse the impact of environmental issues on business (HL);
6.7.14 discuss the social responsibilities of business (HL);
6.7.15 evaluate the effects on a firm’s costs of meeting its ethical, social and environmental
responsibilities (HL)
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