Describe how political, legal and social factors are impacting upon the business activities of the selected organizations and their stakeholders.
The political, legal and social factor of a country has a major impact on a business. The political decisions made by the government, changes in the law and changes that takes place in a society over time, plays a major role in the success of a business. If all these factors (political, legal and society) impart positively on a business then the business is well to be successful. This course work will talk about how this factors impact on two businesses (Tesco and Greenwich community college)
POLITICAL FACTORS
Politicians (government) make a lot of important decisions that affects the running of businesses a company. These decisions may come from the National level (parliament), the International level (the European union) and the Local level (local councils). The choices made by politicians, for example, in creating new laws, will tend to favour some groups at the expense of others. Sometimes these decisions favour business, for example, in the granting of a subsidy or an exemption from paying taxes (not having to pay them). At other times political decisions restrain business, for example, when business taxes are raised or businesses are stopped from carrying out given activities. The below are some of the political factors that affects Tesco and Greenwich community college;
Political stability
Political stability impacts a lot on businesses. Countries with instability see their business fall as a result of this. Even in countries perceived as politically stable, political change can have a significant impact on business. This may simply be because government changes the legal framework, which as we have seen in the previous section is wide-ranging, but it could also be that a change of government changes the political attitudes towards business. This may result in less 'business-friendly' policies, changes in business taxation and regulations or, perhaps, political changes that affect the firm's marketing. Governments can also change the social agenda and this may impact on firms. For example, a government may introduce, or modify, a minimum wage. Many businesses oppose a minimum wage as they believe it: * increases costs * damages flexibility * reduces international competitiveness, especially against those countries which do not have minimum wage levels.
How this affects Tesco, Greenwich College and its stakeholders
Political stability has a strong impact on Tesco and its stakeholder. This impact may favor the stakeholders at the expense of Tesco and vice versa or not favor both. For example, government introducing minimum price for alcohol affects the sales of Tesco and favors its stakeholders. Stakeholders are in this case favored by this and turn to save money. Tesco and its stakeholders are most affected if there changes in business laws to less business-friendly due to change if power from one party to the other. Policies changes like minimum wages, affects Tesco badly, in a sense that they have to increase the salaries of their employees. This also goes a long way to increase sales. If the people have more money, they turn to buy more and this increase sales for Tesco.
Greenwich College and its stakeholders are affected majorly if there is political instability since it is funded by the government. Most policies about education come from the government (ministry of education). Example of the policies that affects Greenwich College and its stakeholders are; * Free education for under-18s. This motivates students (stakeholders) to enroll in to the College. This policy also goes a long way to benefit the College because the more students they enroll, the more money the government offers them. * Cuts in Career Advice in Colleges. Cuts in career advice affect the stakeholders of Greenwich College because most of the student normally needs help
