Political, Social & Legal Factors
Task 1 (P6)
China and the UK have different economic systems but the business activities in both countries are impacted by political, legal and social factors. For Tesco to survive and to continue to be a successful business it must be aware of these factors in both countries and have plans for the business to ensure that the factors do not have a negative impact on the business activities.
The external factors that impact on the business activities of Tesco and are stakeholders in the UK and China are:
• Political
• Legal
• Social
Political
Political factors relate to the government policy and the decisions that the government of the country make. These decisions will have an impact on the activities of Tesco.
UK
The government of the UK changes every 5 years. When there is a change in the Government or a change in Government Policy then this will have an impact on business activities as each political party will have a different political view and different priorities. The present government in the UK is a collation between the Conservatives and the Liberal Democrats. This can sometimes cause problems in getting agreement on policies as all the parties cannot agree. Political stability is important as this provides confidence for both the business and its stakeholders. Political stability can affect a business no matter what size it is. The UK is part of the European Union so when changes are made to EU laws, Tesco’s activity in the UK and other European countries will be affected. Changes in the EU government policies will not directly affect China however there may be knock on effects e.g. maybe a reduction in grants to companies in the EU who would use this money to expand to countries like China. The UK government also has Environmental Regulations that Tesco must comply with. These regulations set guidelines for companies for reducing air, water and land pollution, carbon emissions...