External Environment: Political and Legal Changes Flashcards
(18 cards)
Define business legislation
Laws and regulations made by governments to guide the behaviour of businesses
Outline the main roles of legislation
- to regulate the rights of people carrying out business
- to protect customers, investors, creditors and employees
- to ensure employees are treated fairly and not discriminated against
- to prevent unfair competition
Outline the 3 main areas of legislation
- labour market
- competition
- the environment
What are the 2 main focuses of the labour market element of legislation?
- employment rights
- industrial relations
Outline some examples of employment rights that are a part of the legislation
- reasonable notice before dismissal
- right to redundancy pay
- right to a written employment contract
- right to request flexible working
- right to national minimum wage
- sick pay leave
- not to be discriminated against (protected characteristics)
Define industrial relations
Employer- employee relations (trade unions)
What is the aim of legislation on competition?
- to promote the competitiveness of UK businesses
- to provide effective price competition between suppliers
- to improve efficiency through technical innovation
- to safeguard the interests of customers
Define competition cartels
Agreements between businesses to fix prices so low, customers don’t look around for better deals because that is the best one
Define market liberalisation
Legislation that helps introduce competition into previously monopolistic sectors
Define state aid
Help from the government with the production of certain goods e./g grants
Define merger control
Investigation of mergers and take overs that could result in market domination
Outline some examples of anti competitive behaviour
- price fixing
- predatory pricing
- charging excessively high prices
- patent abuse
- protectionist policies
Dominant market position definition
50% and above
Define predatory pricing
When businesses set prices very low (often below costs) to drive competitions out of the market
Define tying
Forcing customers to buy more than one product when purchasing from a business
Give an example of a regulation authority
CMA
Which legislation prevents businesses from acting in a way that distorts competition
1998 competition act
What areas of environmental legislation must businesses comply to
- air emissions
- storage and disposal of business waste
- storing and handling hazardous substances
- packaging
