Unit 7 - Law And Trade Flashcards
What is business legislation
Set of does and regulations with which a business has to comply
What is the CMA
Competition Market authority - responsible for making sure all businesses abide the competition laws and investigate breaches of them
3 competition laws the UK prohibit
- anti competitive agreements (price fixing)
- abuse of dominant market position (more than 40% of market is illegal)
- mergers that result in dominant position (e.g. Tesco and Sainsbury’s merging is illegal)
Benefits of competition laws
- easier to compete on a level playing field
- customers have more choice
Issues if a firm doesn’t comply to competiton laws
- reputational damage
- financial penalties (10% of turnover)
- criminal convictions
Examples of labour laws
- working time directive ( cannot be made to work more than 48 hours a week, right to 20 min break, u18 can’t work 40 hours a week)
- equality act 2010 (protects people from discrimination)
Impacts of labour laws
-additional costs so lower profit margins
+ improves employee employer relations
+ improves motivation
+ positive reputation
+ more efficient
What are environmental laws
Legislation designed to influence the behaviour of individuals and businesses in order to reduce the negative impact on the natural environment
Examples of environmental laws
- environmental protection act 1974 = controls waste management and emissions
- energy act 2011 = energy providers contain energy efficiency requirements
Impacts of environmental laws
-fines
-additional costs
+ positive reputation
+ ethical
+ innovation
+ more efficent
What is a free market
An economy or sector of an economy where the government intervention is minimal and where the market forces of demand and supply are expected to maximise business efficiency and customer satisfaction
What is enterprise
The process by which new businesses are formed and new goods and services created and brought to the market
Why does the government encourage enterprise
- Tax revenue
- economic growth
- job creation
- increase competitive pressure so existing businesses increase efficiency to compete which creates lower prices and greater choice for customer
Government financial support
- grants
- reducing tax and national insurance
- start up loans
Government non financial support
- simplified paperwork and planning
- training
- teaching enterprise in schools
What are regulators
A person or governing body that sets policies for how businesses operate within their jurisdiction which enforces safety laws and protect customers from malicious business practices
Roles of regulators (3)
- encourages competition by removing barriers to entry
- maintains high standards of customer service
- monitors and regulates prices
What is infrastructure
Organisational struggles (buildings, transport, power, water, sewage, energy, communications) needed for a country’s economic development and prosperity
What is the national infrastructure strategy
Sets to transform the UK infrastructure in order to level up the country, strengthen union and achieve net zero emissions
The governments role in infrastructure
- provides funding (from taxes)
- direct investment and support to create jobs
- development of the infrastructure to achieve global trade
What is a trade agreement
Sets out rules for buying and selling goods and services between two or more countries
What is international trade
Through its international trade policy, the government aims to help uk businesses succeed internationally and encourages overseas companies to work with the uk
Benefits of international trade
- larger market
- increased employment
- economies of scale (bulk)
- diversify risk
- benefit from lower costs in other countries
- customers have more choice
Drawbacks of international trade
- big competition due to free trade
- risk of takeovers by foreign companies
What is Social change
Changes over time in behaviour patterns and cultural values and norms
E.g. internet access, migration and demographic changes
