Business Environment- Political and Legal Factors

(a) Define environmental forces in terms of political, legal, economic, social and technological factors.

The environment is everything that surrounds an organisation, physically and socially. They can be examined in two ways- global/local and general/task (macro/micro). Macro environment covers all factors influencing the organisations indirectly. Micro includes areas that have a direct impact on the organisation.

The environment is a source of uncertainty and can be assessed in two axes: simplicity/complexity , stability/dynamism. Checklist: simple and stable- low uncertainty complex and stable- low to moderate uncertainty simple and unstable- moderate to high uncertainty complex and unstable- high uncertainty

(b) Explain how the political system and government policy affect the organisation.

Government policy influences the economic environment, the framework of laws, industry structure and certain operational issues. This is through capital expansion, demand, divestment and rationalisation, emerging industries, entry barriers and competition.

Political environment affects the firm through legal framework, taking a particular stance on an issue of direct relevance to the business and it overall conduct to the business.

Legal environments factors includes contract, agency, tort, criminal law, company law, employment law, health and safety, data protection, marketing and sales, environment laws, tax laws.

(c) Describe the sources of legal authority, including supra-national bodies, national and regional government.

European Union and World Trade Organisation.

(d) Employment Protection.

All forms of termination of employment must be treated with great care. Retirement- ban ageism in recruitment.

Resignation- exit interniew and period of notice.

Dismissal- entitlement of a written statement of reasons for dismissal.

Wrongful Dismissal – breaches the contract of employment.

Unfair Dismissal – legal impediment or other reason like employees married to a competitor is approved. Others like unfair selection for redundancy, membership and involvement in trade union, pregnancy, insisting on documented payslips and employment particulars, carrying out certain activities in connection with health and safety at work are automatically unfair dismissal.

Incompetence or misconduct.

Disciplinary procedures Redundancy- employer has ceased to carry on the business or the employee ceased to carry out work of a particular kind. However, compensation is legal entitlement.

Equal Opportunities.

(e) How the law promotes and protects health and safety in workplace.

An employer has legal obligations under UK and EU law.

Health and Safety at Work Act 1975.

An employee who is injured as a result of either the employer’s failure to take reasonable care or a breach of statotory duty can sue.

Accidents resulting in death, major injury or more than three days off work for the victim must be notified to the Health and Safety Executive.

(f) Identify the principles of data protection and security.

1. Personal data shall be processed fairly and lawfully and in particular shall not be process unless:
a. At least one of the conditions in 2 is met.
b. In case of sensitive personal data, at least one of the conditions in 3 is also met.

2. Personal data shall be obtained only for one or more specified and lawful pruposes, and shall not be futher processed in any manner incompatible with the purpose of those purposes.

3. Personal data shall be adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed.

4. Personal data shall be accurate and, where necessary, kept up to date.

5. Personal data processed for any purpose(s) shall not be kept for longer than is necessary for that purpose(s).

6. Personal data shall be processed in accordance with the rights of data subjects under this Act.

7. Appropriate teachnical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data.

8. Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level or protection for the rights and freedom of subjects in relation to the processing of personal data.


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