7.4.1
Political & Legal Change
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Political and Legal Change
Changes in the external environment include political and legal changes.
Impact of political and legal changes
- Political and legal changes can present businesses with opportunities and threats.
- 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 affects 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.
Examples of the impact of legal environments
- 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.
How the political environment affects 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.
Examples of the impact of political environment
- For example, the government provides a scheme for those wishing to access a loan for the purposes of starting a new business.
- For example, 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.
1What is Business?
1.1Nature & Purpose of Business
1.2Different Business Forms
1.3Businesses Operate Within an External Environment
2Managers, Leadership & Decision Making
2.1Management, Leadership & Decision Making
2.2Management Decision Making
2.3Role & Importance of Stakeholders
3Marketing Management
3.1Setting Marketing Objectives
3.2Understanding Markets & Customers
3.3Segmentation, Targeting, Positioning
3.4Using the Marketing Mix
3.4.1Marketing Mix3.4.2Pricing Decisions & Price Skimming3.4.3Pricing Decisions & Price Penetration3.4.4Promotional Decisions3.4.5Promotional Decisions 23.4.6Promotional Decisions 33.4.7Distribution Decisions3.4.8Distribution Decisions 23.4.9Social Media & Influencers3.4.10Digital Marketing3.4.11Evaluating Digital Marketing3.4.12A-A* (AO3/4) - The Marketing Mix & Promotion3.4.13A-A* (AO3/4) - Pricing & Competition
4Operational Management
4.1Setting Operational Objectives
4.2Analysing Operational Performance
4.3Increasing Efficiency & Productivity
4.4Improving Quality
4.5Managing Inventory & Supply Chains
4.6Business & The External Environment
5Financial Management
5.1Setting Financial Objectives
5.2Analysing Financial Performance
5.3Sources of Finance
5.4Improving Cash Flow & Profits
6Human Resource Management
6.1Setting Human Resource Objectives
6.2Analysing Human Resource Performance
6.3Improving Org Design & Human Resource Flow
6.4Improving Motivation & Engagement
6.5Improving Employer-Employee Relations
7Strategic Position of a Business (A Level Only)
7.1Mission, Objectives, Strategy
7.2Financial Ratio Analysis
7.3Assessing Overall Performance
7.4Assessing Political & Legal Change
7.5Assessing Economic Change
7.6Assessing Social & Technological Change
7.7The Competitive Environment
7.8Investment Appraisal
8Choosing Strategic Direction (A Level Only)
8.1Markets to Compete & Products to Offer
8.2How to Compete
9Pursuing Strategies (A Level Only)
9.1Assessing a Change in Scale
9.2Assessing Innovation
9.3Globalisation & Internationalisation
9.4Greater Use of Digital Technology
10Managing Strategic Change
10.1Managing Change
10.2Managing Organisational Culture
10.3Managing Strategic Implementation
10.4Problems with Strategy & Why They Fail
Jump to other topics
1What is Business?
1.1Nature & Purpose of Business
1.2Different Business Forms
1.3Businesses Operate Within an External Environment
2Managers, Leadership & Decision Making
2.1Management, Leadership & Decision Making
2.2Management Decision Making
2.3Role & Importance of Stakeholders
3Marketing Management
3.1Setting Marketing Objectives
3.2Understanding Markets & Customers
3.3Segmentation, Targeting, Positioning
3.4Using the Marketing Mix
3.4.1Marketing Mix3.4.2Pricing Decisions & Price Skimming3.4.3Pricing Decisions & Price Penetration3.4.4Promotional Decisions3.4.5Promotional Decisions 23.4.6Promotional Decisions 33.4.7Distribution Decisions3.4.8Distribution Decisions 23.4.9Social Media & Influencers3.4.10Digital Marketing3.4.11Evaluating Digital Marketing3.4.12A-A* (AO3/4) - The Marketing Mix & Promotion3.4.13A-A* (AO3/4) - Pricing & Competition
4Operational Management
4.1Setting Operational Objectives
4.2Analysing Operational Performance
4.3Increasing Efficiency & Productivity
4.4Improving Quality
4.5Managing Inventory & Supply Chains
4.6Business & The External Environment
5Financial Management
5.1Setting Financial Objectives
5.2Analysing Financial Performance
5.3Sources of Finance
5.4Improving Cash Flow & Profits
6Human Resource Management
6.1Setting Human Resource Objectives
6.2Analysing Human Resource Performance
6.3Improving Org Design & Human Resource Flow
6.4Improving Motivation & Engagement
6.5Improving Employer-Employee Relations
7Strategic Position of a Business (A Level Only)
7.1Mission, Objectives, Strategy
7.2Financial Ratio Analysis
7.3Assessing Overall Performance
7.4Assessing Political & Legal Change
7.5Assessing Economic Change
7.6Assessing Social & Technological Change
7.7The Competitive Environment
7.8Investment Appraisal
8Choosing Strategic Direction (A Level Only)
8.1Markets to Compete & Products to Offer
8.2How to Compete
9Pursuing Strategies (A Level Only)
9.1Assessing a Change in Scale
9.2Assessing Innovation
9.3Globalisation & Internationalisation
9.4Greater Use of Digital Technology
10Managing Strategic Change
10.1Managing Change
10.2Managing Organisational Culture
10.3Managing Strategic Implementation
10.4Problems with Strategy & Why They Fail
Practice questions on Political & Legal Change
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