7.4.1 Political & Legal Change Flashcards
Impact of Political and Legal Change
Political and legal changes can affect decision making at the corporate level and functional or departmental level.
For example, the introduction of the National Living Wage presented a threat for many businesses as total costs increased.
How the legal environment effects decision making
Legislation about competition and competitive practices can affect a business. Competition laws ban businesses from acquiring or taking over other businesses if competition will be substantially reduced.
Legislation about employment regulations can affect a business. Working time regulations and the equality act state provisions a business must make for supporting and protecting employees.
Legislation related to environmental protection can affect a business. Laws around pollution provide guidance in terms of the pollution created by businesses and these laws must be complied with.
How the political environment effects decision making
Enterprise is a political factor which involves 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 relates to the transport systems and communications networks used to support trade and supply.
International trade is a political factor and refers to the trading of goods and services internationally.
