3.7.4- External environment: political and legal environment Flashcards
What enterprise?
describing the actions of someone who shows some initiative by taking a risk by setting up, investing in and running the business
What is Infrastructure?
The basic physical and organisational structures and facilities (eg buildings, roads, power supplies) needed for the operation of a society or enterprise
What is Business legislation?
A set of rules and regulations with which a business has to comply a constraint on action or a threat or an oppurtunity
What are the main roles of business legislation?
Regulate the rights and duties of people carrying out a 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
3 main areas of legislation
laybour market
competition
regulators
What are employee rights
equal pay
what are industrial relations
ie trade union membership
What are examples of Anti-competitive behaviour
-Price fixing and market sharing
-predatory pricing and limit pricing
-charging excessively high prices
-patent misuse
-protectionist policies limiting overseas trade
What are regulators
In the UK regulators are the rule-enforcers and how they are appointed by the government to oversee how a market works and their outcomes
Examples of regulators
Ofgem (energy)
Ofcom (telecoms and broadcasting)
What do competition regulators actually do?
monitor and regulate prices
monitor standards of customer service
open up markets
the “surrogate competitor” - more competition
What cant a business do?
-Agree prices with competitors
-Form a cartel
-Share markets or limit production to raise prices
-Impose minimum prices on different outlets
-Agree with competitors what purchased price will be offered to suppliers
-Cut prices below cost in order to force a smaller competitor out of the market
What is a dominant position
A market share of 50%
Examples of abuse of dominant position
Imposing unfair trading terms, such as exclusivity
Excessive, predatory or discriminatory pricing
Refusal to supply or provide access to essential facilities
Tying (ie stipulating that a buyer wishing to purchase one product must also purchase other products)
Key areas where a business must comply (environment)
Emmisons into the air
storage, disposal and recovery of buisness waste
packaging
discharges of waaste water
