7.4 Political and legal change Flashcards
1
Q
The impact of politcal and legal changes
A
- Present businesses with opportunities and threats
- Affects decision making at the corporate level and functional and departmental level e.g the introduction of the National Living Wage presented as a threat as total costs increased
2
Q
How does the legal environment affect decision making
A
- Legislation about competition and competitive practices: competition laws ban businesses from acquiring or taking over other businesses if competition will be substantially reduced
- Legislation about employment regulations: working time regulations and the equality act state provisions a business must make for supporting and protecting employees
- Legislation related to environmental protection: laws around pollution provide guidance in terms of pollution created by businesses and these laws must be complied with
3
Q
Examples of the impact of legal environments
A
- VW was accused of an environmental scandal which failed to comply with environmental regulations
- In 2016 Three’s takeover of mobile operator, O2 was banned on the basis that competition would be reduced substantially and this could lead to the exploitation of consumers
4
Q
How does the political environment affect decision making
A
- Enterprise: national and local schemes to support new, start-up businesses
- Regulators exist to ensure businesses are following industry rules so that consumers are not taken advantage of. Infrastructure is a political factor and related to the transport systems and communications networks used to support trade and supply
- International trade: the trading of goods and services internationally
5
Q
Examples of the impact of the political environment
A
- The government provides a scheme for those wishing to access a loan for the purpose of starting a new business
- The Financial Conduct Authority is a financial regulator which can intervene in banking and lending products to ensure customers are receiving a fair and transparent deal
