6.1 Political and legal influences Flashcards
What are the advantages of privatisation?
Private sector efficiency: Greater motivation to improve efficiency when profit is the goal.
Faster decision-making: Reduced bureaucracy leads to quicker decisions.
Managerial responsibility: Managers and workers take greater ownership.
Increased competition: More competition leads to better services and prices.
Sale of nationalised industries: Raises finance for government projects.
Access to capital markets: Private businesses can attract investment.
What are the disadvantages of privatisation?
Public needs neglected: Decisions driven by profit may overlook public welfare.
Job losses: Employees may be laid off to cut costs.
Loss of government control: Government loses control over major industries.
Potential monopolies: Private firms could create monopolies, leading to higher prices.
Increased inequality: Privatisation may widen the gap between rich and poor.
What are the advantages of nationalisation?
Government control: Ensures control over essential services (e.g., water, energy).
Integrated policies: Easier coordination of national policies (e.g., infrastructure).
Prevents monopolies: Keeps industries from private monopolisation.
Economies of scale: Large-scale operations can reduce costs.
What are the disadvantages of nationalisation?
Inefficiency: Lack of profit incentive may lead to poor performance.
Government interference: Political involvement may affect business decisions.
Cost to taxpayers: Nationalisation can be costly to maintain and subsidise.
What are some examples of legal controls on businesses?
Employment protection laws: Safeguard employees’ rights, prevent exploitation.
Health and safety regulations: Ensure safe working conditions.
Minimum wage laws: Set wage floors to protect workers.
Consumer rights: Safeguard buyers from unfair practices.
Competition laws: Prevent monopolies and promote fair trade.
What are the pros and cons of minimum wage increases?
Pros: Raises living standards, reduces inequality.
Cons: Increases production costs, potential job losses, inflation risk.
What are the pros and cons of employment and safety laws?
Pros: Better working conditions, reduced accidents, enhanced reputation.
Cons: Increased costs (supervision, wages, safety compliance).
What are some reasons governments protect consumers?
Power imbalance: Consumers are often weaker than businesses with large marketing budgets.
Complex products: Hard for consumers to understand technical products or verify claims.
Pressurised selling: High-pressure sales tactics, such as tempting but risky loans, can mislead consumers.
Global marketplace: Imported goods may not meet local quality/safety standards.
Competition: Businesses might lower quality, service, or guarantees to offer cheaper prices.
What are the three main consumer protection laws in the UK?
Sale of Goods Acts.
Trade Descriptions Act.
Consumer Protection Act.
What are the main stipulations of the sales of goods acts?
Fit to sell: Products must be safe and free from defects.
Suitable for intended purpose: Items must work for what they are sold for.
Perform as described: Goods should function according to claims made.
What is the main aim of the trade descriptions act?
Stop misleading descriptions: Businesses cannot falsely represent products (e.g., labelling a plastic chair as leather).
What are the main stipulations of the consumer protection act?
Liability for damages: Businesses responsible for harm caused by defective products.
No false pricing: Prices must be accurately stated, and discounts must be genuine.
Are there any other Consumer Protection Laws in the UK?
Weights and measures: Products must be sold by accurate weights and sizes.
Consumer credit regulations: Protects against misleading or exploitative loan agreements.
Food safety: Strict rules on preparation and sale of food products.
Certain dangerous products, like guns, illegal substances, and harmful pesticides, are banned or heavily regulated.
How do consumer protection laws impact businesses?
Increased costs:
Redesigning products to meet health and safety laws.
Updating ads for clarity and accuracy.
Enhancing quality-control standards and precise measurements.
What changes may be needed in a business to conform with cultural changes?
Consumer-focused strategies: Laws may force companies to prioritize consumer interests.
Senior management: A shift in attitude may be needed at the top levels of the business.
