Business Level 3 Unit 1.4

Topics: Corporation, Business ethics, Law Pages: 10 (3247 words) Published: April 25, 2013
Assessment 1.4

Businesses are constantly being impacted by external factors, many of which are out of their control. These factors include social factors; examples are demographics (population), changes in household &families, education, religions, attitudes to work, attitudes to male and female roles and ethics. There are also political and legal factors which includes legislation, company law, political stability and so on. All these factors have serious impacts on all businesses.

Political factors

My chosen organisation will be Waitrose, a groceries supplier. Like any business in the UK, Waitrose is affected by politician’s decisions, Members of Parliament, the Prime Minister, are in charge of important decisions including industry and cooperate law. Waitrose must comply with these laws. At an international level any business which operates in the Britain, must also abide European law as the UK is part of the European Union, thus having an impact on Waitrose too. For example the government will cut corporation tax for big businesses to 20% by 2015; this will have a significant impact on Waitrose. However there are also benefits to belonging to the EU, such as free movement of people (labour), capital and goods. Which results in lower levels of paper work, makes it easier for EU skilled residents to move more easily allowing businesses to focus on innovation and expansion.

Political stability

Another political factor which affects Waitrose is the need for political stability. It is essential for businesses to have political stability, an example of the effects of political instability would be Syria, and where no business would dare invest or function. Therefore political stabilities favour businesses, once a government is elected it will seek to put its manifesto into action, this allows businesses to use this plan to identify changes and how they may affect them before it goes forward. For that reason businesses have a degree of certainty for the next couple of years. The current Conservative-led coalition government is in favour of the private sector businesses such as Waitrose, in the hope that it will create jobs for many individuals who are being dismissed from public sector jobs.


Taxation has one of the most profound effects on businesses; tax is collected by the government, for example income taxes and business rates. Taxation helps the government raise its revenue and most importantly it allows them to encourage or discourage certain behaviours (through lower, higher rates of tax and subsidies). For Waitrose, for instance high taxes would be collected if they were to use high fuel consumption cars which increased pollution. Waitrose as a private limited company is constantly aware of profits and thus sees increased taxation as negative. As a result businesses are constantly interested in what the government is doing to taxes, especially in the Annual Budget in March.

Providing infrastructure

The infrastructure of a country and the success of a business is again highly important as this is the skeleton of the economic system which supports the rest of the economy. An example is the roads on which Waitrose drives the home delivery trucks. These roads and motorways are build/maintained by the local government.

Legal factors

Waitrose must operate within the framework of the law, failure to do so could lead to fines and even imprisonment for directors. Business therefore gives a high priority to making sure they are operating within the law. There are thousands of different pieces of legislation and so it is a very time consuming, costly to businesses but they have to choice. We will focus of three important areas, company law, contract law and competition law.

|Company law |Includes who can set up a business, the | | |steps, paperwork and company reports. | |Contract law...

BTEC business level 3 John Bevan
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