Political, Legal and Social Factors

Task P6: Describe how political, legal and social factors are impacting upon the business activities of the selected organisations and their stakeholders

Each businesses have different factors which will influence how that will impact the business activities. Tesco for example have a lot of factors which they need to consider so they can have a successful business, these factors are:
Political factors
Legal factors
Social
The political factors are the factors that is related to the governments policy which can have an effect on their business. Most businesses keep an eye on any political factors such as any new legislations which have been introduced or any old legislations which could have been changed. With an organisation such as Tesco there will be many factors that may affect them.
The Political factors could include any government support, provide additional enhancing skills such as training days or introduction days for new employees. The main factor could be government support as this can help the organisations with extra funding or any with any other additional help such as the fiscal policy which will help tesco with their loans. Loans will be offered to Tesco if they are having financial problems or are struggling to pay the money for any new products or any better products. For example,during the recession Tesco might not be doing as well as they forecasted to do so, which could mean they might not be able to spend much money on new items which would increase the amount of profit they make.
This could mean that Tesco might need to take a loan and pay it later with interest, so for example if Tesco has taken a loan from the government which was £1000 and the interest rate was 5%, Tesco would have to pay the government back with £1150 as the £150 comes from the interest. However Tesco don't normally take loans out because they are never short of money as they are such a big global organisation and they can use their own profit and shares to complete any extra cost, if Tesco needs to cut down on costs they will look at alternative to how they can cut down cost, they can do this by changing their supplier to a cheaper one who uses cheaper natural resources or change a supplier who tesco can give the money back later, they could even cut down on costs by limiting the number of employees so they have fewer employees to pay for.
Likewise you can also get Grants. Grants are funds that are by one party often by a trust (e.g. princess trust) or government department. Grants influence Tesco's activities because it sets certain objectives within a local and international scale for example objectives are :
On a local level, to support the needs of employees, customers and communities around our stores;
On an international level, to help our business and supply chain to make a difference in their locations.
The other side of government support is indirect support which is all about fiscal policy , taxes, vat and corporation tax. VAT stands for Value Added Tax. Whatever we buy within Tesco's we will have to pay some VAT no matter what it is we buy. Fiscal's policy is all about taxation to influence the economy. Changes in the level of taxation and government spending can the various impacts on Tesco.
The level of taxation changing means that Tesco also have to pay tax. They have to pay this to the government so that the government could provide services for the general public. This would be different if Tesco's was funded by the government because then they wouldn't have to pay tax.
In addition they focus on improving the skills of the employees which includes training schemes and education, which adds further cost. Tesco's may have training days to help support the staff to widen the skills they use in Tesco's. They may have to pay to send the staff on these training days but in the long term it could increase the amount of money they make because they will be more productive and be more skillful than before.
Another factor would be provide which is infrastructure and the links they have with the internet. This could include online shopping. Tesco's have their own online shopping on the internet for people who prefer to use the internet to get their shopping from online. Once the order has been placed Tesco's then deliver the food or products the next day. This also helps people who may not be able to make it to the stores itself like customers who are very busy with work and even the disabled people so again it opens a new customer base which means they again will make more money. Tesco are always influenced by customers and aim to operate around their needs.
Another factor which influences Tesco are the legal factors. The Legal factors could affect Tesco's activities may be company/contract law. Each of which may protect employees and consumers. There must be written evidence within the contract that the employee signs to say that the employer will make sure that any details given to them will be secured and shared with no one else. Confidentiality is not the only thing that must be included within the contract. The number of hours that the employees work and the working conditions are also included within this so the employee knows what to expect from Tesco's and Tesco's know what to expect from the employee. This type of contract has to be signed both by the employer and the employee to make sure they both agree to the terms and conditions.
There is such thing called consumer protection which falls under the sales and goods act 1994. This is basically an act of parliament which relates to 'goods' been sold and bought. It includes conditions like if the price is not agreed the consumer needs to pay a reasonable price. Another thing that might affect Tesco's activities might be the national minimum wage act 1998. This basically sets the minimum wage the employees can work for. This can also influence how many employees are taken on by Tesco because it influences how much money they can pay out to employees a year when they work. This will also be included in the contract of employment. Another Act that could affect Tesco's activities would be the health and safety & work act 1974. This again will be involved within the employment contract which states the working environment that the employees will be working in within their working days. This is to ensure the safety of the employees and customers. If someone was to get injured at Tesco's they could be eligible to be sued because it is Tesco's responsibility to make sure that everyone is safe within the environment. It may also include : maintaining a working environment which is safe and without risk to health and providing equipment and systems of work which as far as possible are safe without risk to health.
Last but not least, the third factor which could influence Tesco’s are social factors. This could include ages, Gender, education & skills, Religion, household income and attitude to male and female workers.
Over the past few years the birth rate has increased so they may start to look at selling childrens toys or products to open a new market which will eventually create more profit or make a lot more money because they'll have an extra market that parents and children are interested in. They will also focus on education as seen on adverts they already sell school uniform for children that are a certain age which is mostly primary school. They will also sell school equipment for all ages from primary to secondary and even to college. This opens a whole new market. However it might not be this market they completely focus on. It can also focus on death rates. Tesco's itself have a funeral service that is open to any family that wish to organise a funeral for a loved one. The higher the death rate goes the more money Tesco's will most likely make if families choose Tesco's funeral service.
Gender also has a huge influence on Tesco's stores because they can have different sections for different genders which means there will be something for everyone within the Tesco's stores. However Tesco is a global company which means genders from all around the world as well as all ages will be visiting Tesco to get what they want.
Within their stores they provide equal rights which means both men and women can work there. Tesco's can not turn someone away from work just because they are male/female, black/white and disabled/able to complete the job. This links to legal factors because it is within the contract of employment that equal rights are top priority. Tesco needs to respect both male/female workers simply because the store themselves sell both male and female products so they do need to employ both males and females.
Religion could also affect Tesco's activities. There was an incident that involved the religion of "jedi" when a jedi church founder was thrown out of Tesco's for refusing to remove his hood. This obviously caused the man humiliation and Tesco's received some criticism. It is therefore Tesco's task to make sure they do not discriminate different races and religion. Because Tesco's is a global company they have to take into account that a range of people will be visiting their stores and wanting to buy products. It could also affect Tesco's activities because they may want to open up new products for different religions which again opens up new markets completely and it does not single people out. Again this in the long run will help create more money for Tesco.