This is a summery onTopic 12: What factors affect choice of business location? I achieved a distinction for this subject using these notes and believe they will be beneficial to you too.
Unit 1: What factors affect choice of business location?
1.1 Labour-intensive industries
Some industries are labour intensive. This means that they employ large numbers of workers as compared to
other industries that use more machinery than human workers as compared to other industries that use more
machinery than human labour. These industries must be near a source of labour so that it would be easy for
workers to commute. The commute should not affect family life negatively.
Some industries choose to establish themselves near informal settlements as they make it easier to obtain
unskilled and cheaper labour
With the unemployment rate high it is essential for training to take place. Training centres equip workers with
additional skills to make them more employable. Training usually takes place in batches so training centres need
to be situated where there are many takers and suitable training facilities. Training within the primary sector
industries such as agriculture, forestry and fishing need to be carried out on location.
1.2 Labour regulations
CCMA (commission for conciliation, Mediation and Arbitration) was established in 1996 to
resolve labour disputes.
Most countries rely on SMMEs (Small, Medium and micro enterprises) to employ its people.
The important labour related issues are:
Collective bargaining – the process of negotiations between employers and trade unions to reach agreement
regarding work conditions
Employment equity – ensuring employment for the disadvantaged people
Child labour - stopping the employment of minors
Overtime – prescribing tariffs for overtime and maximum hours
Safety standards – ensuring workers are safe especially in hazardous occupations
Other benefits – a number of other benefits including medical, transport and canteen among others
Unit 2: transport and infrastructure
2.1 Transport
A business needs good transport:
o To receive what it requires to operate
o To deliver orders to customers
o To carry customers to and from the site
o To bring employees to work and take them back home
A business may need different forms of transport including:
o Road transport for delivery of raw materials or completed products
o Air transport for quick deliveries
o Ports and harbours to import raw materials or export finished products or to transport large and heavy
raw materials required for production
o Container facilities for transporting goods in containers
o Freight rail transport for heavy raw materials eg. coal
2.2 Infrastructure
Includes all the basic stock, services and facilities needed for their economy to function properly.
Water supply: may be an important factor for some industries
o Eg farms require large quantities of water
o Carwashes rely completely on water supply
o Water is a scarce resource and needs to be used very wisely. Water conservation and
awareness programmes are in place to protect this valuable resource and to make people aware of the
dangers of not using water wisely.
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