IGCSE, A Level Business Student Forum

Q19 Analyse the disadvantages to the business of having trade union. [6]

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Possible Structure
[KN]
[AN]
[AN+]

[KN]
[AN]
[AN+]

[KN] Increased Labor cost
[AN] Trade unions negotiate for better wages and benefits, boosting employee satisfaction but potentially increasing labor costs.
[AN+] However, these improvements may introduce inflexibility in employment terms, challenging businesses, especially in fluctuating industries, impacting competitiveness.

[KN] More potential of disruption at workplace
[AN] Trade union disagreements with management, especially during negotiations, can lead to disruptions like strikes, causing financial losses and damaging the company's reputation.
[AN+] Strained relations also lower morale and productivity, impacting the business's smooth functioning.

[KN] High labour costs.
[AN] Trade unions often demand for high wages, salaries etc can negatively effect the profitability ratio especially if it is a small business with tight profit margins.
[AN+] Thus this will play the role of a dagger which will totally ruin such businesses goals and objectives due to less availability of finance available.

[KN] Regular work stoppages.
[AN] This can cause delay in production, and the quality may also get compromised.
[AN+] Thus this will directly impact the customer base as one wrong move can effect total business growth for the future

[n] increased labor cost
[an]as trade union may negotiate o higher pay and improve working conditions
[an+] thus this could impact the business profitability

[kn]strikes and work stoppages
[an] when negotiation breakdown dispte rises and union may resort to strike
[an+] which can disrupt operation lead to financial operations

[KN] increases the costs of labor
[AN] trade unions negotiate that better wages and salaries should be given to the employees thus increases motivation in employees
[AN+] However, these improvements may introduce inflexibility in employment terms, challenging businesses, especially in fluctuating industries, impacting competitiveness.

[KN] Potential for Labor Disputes and Strikes
[AN] management over contract negotiations, grievances, or other issues
[AN+] These disputes can lead to strikes, which can result in lost productivity, revenue, and customer goodwill.

[kn] high expenses
[an] as trade unions usually argue for an increase in benefits/salary
[an+] business may have to improvise other aspects in order to fulfil their needs

[kn] misuse/wastage of resources
[an] if majority votes for acertain decision which may cause more damage for the business
[an+] wastage of time and harms businesses way of working

{KN} Increased Labor Costs
{AN} Trade unions may negotiate for higher wages, increased benefits, and other perks, leading to increased labor costs for the business.
{AN+} Elevated labor costs can impact profitability, potentially reducing the business's competitiveness in the market.

{KN} Potential for Strikes and Disruptions
{AN} Disputes between the trade union and management may lead to strikes or work stoppages, causing disruptions in operations.
{AN+} Work stoppages can result in financial losses, damage to the business's reputation, and strained relationships with clients or customers.

Q19 Analyse the disadvantages to the business of having trade union. [6]

[KN]Higher labor costs
[AN]due to the conflict over increased wages, pay, benefits, etc., costs rise significantly
[AN+](an assumption of a chance)thus costs exceed revenue, negatively effecting profit, reducing its dominance in the market

[KN]work stoppages
[AN]in between strikes from trade unions, cause a lot of disruptions in work and relationships
[AN+]thus, productivity, efficiency and output fall, along with an increased chance of employee turnover

[KN]High labour costs
[AN]Trade unions negotiate with firms to increase wages in order to satisfy their members. This can reduce profit margins
[AN]Less opportunities of reinvestment

[KN]Disruption in production
[AN]Trade unions may carry out strikes and industrial tribunal in some cases to get their claims met forcefully, which leads to more days off from work
[AN]hence output can be delayed and customers may be unsatisfied.

[kn] Increased Labor cost
[an] when trade unions are formed all the workers want higher wages and don't work as much thus firms in order to satisfy their members increase wages which isn't beneficial as their paying twice the wages for half the work
[an+] thus causing less opportunities for reinvestment and expansion
[kn] More potential of disruption at workplace
[an] trade unions may carry out strikes to get their claims accepted by the business which will lead to less operations to take place and even lesser days in work
[an+] causing output to decrease and thus customer satisfaction will not be fulfilled

[KN] Increased Labor Costs.
[AN] Trade unions frequently bargain on behalf of their members' better working conditions, greater pay, and better benefits.
[AN+] While these demands may be reasonable, they can contribute to increased labor costs for the business, potentially impacting profitability, especially for smaller enterprises.

[KN] Industrial Action and Disruption.
[AN] The possibility of trade union-initiated industrial action, such as strikes or work stoppages, is a serious drawback.
[AN+] This may cause financial losses and harm to the company's reputation in addition to interrupting regular business operations.