P6 - Social, Legal and Political Issues/Factors

Social, Legal and Political Issues/Factors 

Social issues have gone on for a long time in the business world, and even today some of us suffer not receiving a ‘promotion’ purely because we are slightly different in how we look, think or work. There is an on-going increase in the population too, which means that there is a greater increase and demand for goods and services. However, this does address the issue on finding more employees, considering that there are many people without jobs. There are more single families and households then there was 20 years ago in the UK. This could help businesses like Tesco since it means that they will want to buy quick and easy to make food. Many jobs now require an adequate level of education and ICT skills though, which can cancel out many people to employ since they might not have had the opportunity to earn a degree, or some sort of higher education. Not only this, women in the business industry receive far less than the average male. 50% of people who are working today are female, which is a lot higher than 10 years ago.  

Political issues and factors include political stability, meaning that businesses will know where they are for the next 5 years, therefore can divide out a plan. Government support in the private sector includes giving out support and different grants to certain businesses as guidance and help. This support also makes sure that businesses act in a correct way. In the Voluntary Sector, the government will provide grants of money to a business, and also provide tax relief for businesses such as charities. The Government will cover any loses made, health, education and welfare services to businesses in the Public Sector. Furthermore, the UK is a member of the European Union, which means that UK businesses are able to trade and transport goods easily with other members. The EU allows free movement of goods, money and people to help businesses work together more efficiently.  

 Legal issues include providing a framework for a business, known as the ‘Company Law’. The Company Act is a great way to find out information for a business, and means that you can find any criminal records or how much the business will be in debt by. Protecting customers and employees is also very important; it covers agreements in regard to loans, overdrafts and credit cards. Also, it includes laws on borrowing/credit offered by businesses. The Employment Law on the other hand, means that all employees are protected by certain laws. Some of these laws include working time directive, minimum wage limits, equal pay and laws against any discrimination. Ensuring fair and honest trading is vital for a business too, since the business could be faced with major consequences if it is not considered as equal.

Political Factors  

UK 

	Tesco	Cancer Research
Infrastructure	17 billion has been spent on infrastructure over the next parliament. This means that the global rate for infrastructure has to be improved. This will happen over a long period of time to ensure that every part is covered. Furthermore, 10 billion will be invested in transport, 20 billion in schools and an additional 10 billion into scientific research and resources.  Tesco needs to know this since they can have a clear understanding of the economy and the impacts of the government investing money into different sectors.	Other businesses, such as Cancer Research need to ensure that they are doing the same as Tesco, since Tesco have a firm plan of what will happen. This can be achieved by being organised with products, advertisement and enticing the audience on a whole.
Taxation	Tax in the UK is a lot more changeable than tax in China.  Minimum wage in 2000 was £3.10 for UK citizens; however this has gone up dramatically over the course of 12 years, and was £6.10 in 2012. The minimum wage in the UK currently for 21 and over is £6.70. The minimum wage was raised again by 60p during the course of 3 years. Tesco needs to know what the minimum wage is so that they can decide on the amount that they will pay their employees.	This means that other businesses have to pay each and every one of their staff at least the minimum wage. Unless it is a charity, which will mean there most likely will be cuts in tax.

 

China 

	Tesco	Other Businesses (Cancer Research)
Infrastructure	Infrastructure is one of the most prioritised topics amongst the Chinese Government. If China made the roads and rail works better, it would mean transporting goods would be easier and the economy would boom. This would also happen to work for telecommunications and electricity. Stakeholders who would be affected by this would be employees, since they would have made the store even more appealing. Also, the local community would be affected since if the roads and rail works are made better, it means that they will be able to commute further.	Other businesses would need to make sure that they would be keeping up with the standards set by businesses such as Tesco. This is because if they don’t, then they will go into a recession.  Stakeholders who would be affected by this would be employees, because they would have to make sure that the standards of their service are just as good as larger businesses, such as Tesco.
Taxation	From 2008 to 2012, tax did not change in China at all. Minimum wage in China was only just set in 2012, meaning that businesses could pay the employee what they thought was right. Local Governments amongst China all set a minimum wage for that area, which can have is disadvantages since not all areas are fair paying.	Other businesses will have to ensure that they do not pay as much for their employees/workers. This is because they are a non-profit organisation.

 

Legal Factors 

UK

	Tesco	Other Businesses
Consumer Protection	To protect current and future consumers, the product the business Is selling must be of high standard. This means the product cannot be damaged in any way.  Suppliers would have to make sure that their products they are supplying Tesco with are of a high standard and quality, if not, they could face the consequence of Tesco finding another supplier.	Since this is a non-profit organisation (charity), it should make sure the item is sellable and not broken, however since most of the products a charity shop stocks are second hand, it would be hard to ensure this.
Competition Law	This law protects Tesco and employees at Tesco from any disruptive/incorporative behaviour amongst the customer’s buying/browsing products. This also means that the competition law will benefit Tesco when they sell products for cheaper than everyone else. Since this will mean that the customers will be more interested in getting the best deal, and therefore go to Tesco.	This will benefit other businesses and charities since it will protect them from any kind of upsetting behaviour taken place by a customer. All businesses must comply with this law; otherwise they face serious legal consequences.

 

China 

	Tesco	Other Businesses
Consumer Protection	This would benefit Tesco since if a dominant position were to be abused in any way, they would receive full care and time off. However, this does not cover the issue of minimum wages changing across all areas in China.	Other Businesses, like Cancer Research would have to do the same as Tesco, and report reviews of employees and staff to ensure nothing is going wrong.
Competition Law	There is no price fixing in China, therefore Tesco could charge more/less for products and could benefit highly from this. Furthermore, they would also be able to use local suppliers in the area.	No cartels are allowed within regulations from the competition law, and there also includes laws on monopoly power. However, suppliers do get treatment for their long and tedious hours.

 

Social Factors

UK 

	Tesco	Other Businesses
Environment	The government is working on protecting the environment we live in today by reducing pollution. This will come about by finding a new method of making energy and fuel, or more simple objectives like planting more trees in the area. Helping out the environment will reduce landfill sites though, and this means that Tesco can have more options when it comes to packaging their products. The local community would be affected by changes in the environment by Tesco, since it will most likely be changes in the area they live in.	Other businesses, such as charities tend to be very mindful when it comes to the topic of the environment. They tend to use biodegradable plastic bags so they don’t harm the environment and wildlife.
Population	When the population booms, there are more people living in that certain area. This means more customers spending money on products and more people to employ. However this also does mean that there will be more deaths, and as Tesco is a very large scaled company, it could set up funeral services.	Population increase can benefit other businesses since there will be more people, and more children. This can escalate on to the idea that there will be more of a need for children’s items, such as clothing/uniform and toys.

 

China

	Tesco	Other Businesses
Environment	China is one of the most populace nations on the whole Earth. This can come with perks however many downfalls too. China has to provide resources for each citizen who wants to buy from Tesco too, making suppliers and producers highly in demand.  China has a very high pollution rate, and this means the local community will suffer unless positive impacts are made.	Environmental factors for other businesses and charities may include air pollution, water pollution, and desertification and habitat loss. All of this can massively affect the economy in China since it can move citizens out and around areas.
Population	Chinas population rank rates first in the whole world. It has roughly a 20% average of the world’s population. This means that Tesco will have many opportunities to high new/more employees.	Other businesses will have to follow the same plan as Tesco, and try to employ as many people when the economy reaches its boom stage. Otherwise, it may fall rapidly and leave these other businesses and charities with nothing.