Legislation

• Legislation


  To regulate behaviour including businesses and prevent them from exploiting people
• Consumer protection laws


  • Right to return or reject goods
  • Full information about products should be disclosed
  • Good standard and quality of products should be sold
• Benefits of consumer protection laws

  • Quality control
  • Less likely to be fined = better relationship with customers
  • Good brand and publicity
  • Consumers have increased confidence in purchasing = increased sales
• Drawbacks of consumer protection laws

  • Complying with laws = costly = bad publicity
  • Business can be sued = bad reputation = costly for court fees
  • Higher production costs because you need correct materials
• Employee protection laws


  • No discrimination in the recruitment process
  • Employment contracts
  • Equal pay
• Benefits of employee protection laws

  • Employees have contracts of employment
  • Better reputation for prospective employees
  • Less staff leaving = less costs
  • Motivated workers = productive
  • Legal discrimination
  • NMW rise = more motivation = more productivity
• Drawbacks of employee protection laws

  • Expensive to meet regulations
  • Compliance costs
  • Responsible for wellbeing of staff
  • Tax and NI contributions
  • Labour costs through minimum wage increase
  • Not complying leads to demotivation
  • Increased fines change employee behaviour for the better
• Environmental laws


  Aims to make businesses responsible for their impact on the environment
• Benefits of environmental laws

  • Opportunities – business comes up with solutions = more innovative = positive marketing
  • Saves money e.g. energy saving measures
  • Outsourcing
  • Compliance improves reputation
• Drawbacks of environmental laws

  • Threats
  • Marketing costs
  • Cost for compliance with laws
  • Operations management costs
  • Training
• Competitive policies


  Restricts anti-competitive practices such as increasing prices, restricting consumer choice, raise barriers to entry
• Benefits of competitive policies

  • Businesses may be frustrated if practiced deemed illegal
  • Healthy competition
  • Benefits economy
  • Promotes innovation and improved efficiency
• Drawbacks of competitive policies

  • Constraint on business activity
  • Reputational issues if you don't comply = lower sales and fines
  • Changing pricing strategy
  • Wont bother to persue mergers
• Health and safety laws


  Ensures a safe work place for customers and workers
• Benefits of health and safety laws

  • Good safety record = retain high quality staff = staff feel protected and reduce = reduced absenteeism = more productive workers
  • Reduces incidents of injury = no legal action
• Drawbacks of health and safety laws

  • Costly
  • Financial penalties