3.7.4 political and legal environment

    Cards (20)

    • What is the political environment?
      The political environment comprises actions taken by local, national or international authorities that affect the activities of businesses. A number areas of government policy may be considered to shape the political environment, including:
      • The regulation of markets
      • The country’s infrastructure
      • Issues relating to the environment
      • International trade
    • What is the legal environment?
      The law is a framework of rules governing the way in which our society operates. The rules apply businesses as well as individuals. The legal framework affects businesses in a number of ways impacting on almost all areas of business activity. E.g. marketing, production, employment, relationships with customers, competitors, its form of ownership. You need an understanding of three elements of the legal environment. The are:
      • Competition
      • The employment of labour
      • Environmental issues
    • What is business legislation? LEGAL
      • A set of rules and regulations with which a business has to comply
      • A constraint on action or a threat
      • An opportunity
    • Main roles of business legislation LEGAL
      • Regulate the rights and duties of people carrying out business
      • Protect customers from harmful business activity
      • Ensure employees are treated fairly and not discriminated against
      • Provide protection to investors and creditors
      • Deter and prevent unfair competition
    • What are the three main areas of legislation? LEGAL
      Labour market, competition, environment
    • What are the two main areas of the labour market? LEGAL
      employment rights, industrial relations
    • Equal pay act - labour
      Men and women are entitled to equal pay for work of equal value
      • Workers have the right to ask their employer for information to check equality
      If they believe their pay is unequal, they can take the employer to an employment tribunal
    • Minimum Wage Legislation - labour
      • Employers required to ensure they pay their workers at least the national minimum wage (NMW)
      • In the UK, for workers over 25, a top-up is applied to create the National Living Wage (NLW)
    • Employment Legislation and Discrimination - labour
      It is illegal for an employer to discriminate against an employee on the basis of: sex, race, age, sexual orientation, disability, relationship status
    • Employment Rights in UK - labour
      • Reasonable notice before dismissal
      • Right to redundancy
      • Right to a written employment contract
      • Right to request flexible working
      • Right to be paid national minimum wage
      • Right to take time off for parenting
    • Aims of Competition Policy LEGAL
      The aims of competition policy are to promote competition; make markets work better and contribute towards improved efficiency in individual markets and enhanced competitiveness of UK businesses within the EU single market.
    • Examples of Anti-Competitive Behaviour LEGAL
      predatory pricing, charging high prices, price fixing, patent misuse
    • Examples of Regulators in the UK LEGAL
      OFcom, OFWAT, CMA, financial services
    • What do the Competition Regulators Actually Do? LEGAL
      moniter and regulate prices, standards of customer service, open up markets, the 'surrogate' competitor
    • Environmental legislation LEGAL
      emissions, packaging, business waste, hazardous subtances
    • influential factors: encouraging enterprise POLITICAL
      Making funds accessible to small businesses, guidance on running new businesses, supporting established businesses
    • Influential factors: developing infrastructure POLITICAL
      speeding up communication and transportation. Allow access to new markets
    • Influential factors: regulating markets POLITICAL
      regulation of specific industries, promoting free competition, regulating private monopolies
    • Environment issues
      protecting environment, create opportunities for businesses that specialise in environmental products eg recycling
    • Influential factors: international trade
      Policies to increase exports to other countries, exports bring in revenue from abroad
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