Political, Legal, and Social Factors Impacting Business

1. Political: “issues affecting our international vendors could materially adversely affect our business and financial performance.”(Page 8.)

Political: this inturns the legislation and government rules of the country that may influence and pose as a threat to the business,

Tariff and Tax: The trade of a business organization also gets affected by the tariff and Tax laws. This could influence both positively or negatively. If the global market’s tax and tariff rate is high then TESCO could face difficulties to compete with those countries companies.

Political factors refer to the legal activities and political rules that may influence the business in some way. However, ASDA will continue to face many changing in the business for better or maybe worse when it comes to changes in government laws, for example, taxation and unemployment. The government is encouraging business to create or provide different jobs for the consumer this may affect or puts pressure on ASDA as they have to meet the all the government rules and regulation while continues to run the business according to the law (Worthington & Britton

Direct taxation includes income tax, national insurance and corporation tax. Income tax and National Insurance (NI) are similarly affecting the consumer and operate exactly the same giving the same economic effects. Income tax and NI are the two biggest source of tax revenue for the govt, changes to either of these directly relate to disposable income, which in effect changes consumer demand. Consumer demand is a major factor for Tesco as a business as and an increase would mean more sales and a higher income, a decrease would lead to lower sales and lower income for Tesco’s. A lesser income would mean smaller profits which in turn might mean lower investment and employment levels.

15–1. Liquidated Damages. Carnack contracts to sell his house and lot to Willard for $100,000. The terms of the contract call for Willard to make a deposit of 10 percent of the purchase price as a down payment. The terms further stipulate that if the buyer breaches the contract, Carnack will retain the deposit as liquidated damages. Willard makes the deposit, but because her expected financing of the $90,000 balance falls through, she breaches the contract. Two weeks later, Carnack sells the house and lot to Balkova for $105,000. Willard demands her $10,000 back, but Carnack refuses, claiming that Willard’s breach and the contract terms entitle him to keep the deposit. Discuss who is correct. (See Damages.)

(3) Political and legal environment, factors related to policy and law that influence company’s operation.

Compare and contrast macro political risk with micro political risk. Discuss policies to combat their impacts on international business activities.

There are many different levels of government which exist and have a direct or indirect impact on people’s lives.

If there was an increase in income taxes on poorer people they will have a lower personal disposal income and will have changed their buying habits from brands to Tesco Value or go to cheaper competitors. If income tax would increase on the rich, it wouldn’t affect Tesco as much as they probably go to higher end supermarkets such as Waitrose and will have buying changing habits with high end products such as Supercars’ and Rolex’s. Tesco has recently decreased their prices on thousands of branded products to increase sales, profits and try to gain their market share back as quickly as possible. Also to avoid the incident that occurred in 2013.

Laws affect how citizens live and work within businesses there are Laws and regulations that all businesses have to follow so each citizen gets treated equally and there are laws to protect them. To protect businesses and to protect all citizens involved in a business there are certain laws that have been put into place, without these laws businesses will not succeed this is why politics is so important to business, this essay will define Democracy and explain the relevance to business, different types of democracy with the definition and a country, state or town that’s government use the type of political ideology and also how it affected society in the past compared to the present.

When it comes to political factors, the government stability, taxation policy, social welfare policies and trae regulations shoule be considered.

Political environment – The processes of national, regional and local governments, as well as various power groups that can affect the rules for doing business. This can include government intervention in particular industries, tax policies at all levels, government expenditures for certain causes, legislation aimed at implementing social policy, and regulation of various industries and trade practices.

In the present world business plays an important role in every sphere of life. Business determines one’s life style, standard of living, education and even cultural standard. So to lead a bette-r life we need to understand

Technological - how the rapid pace of change in production processes and product innovation affect a business.