343218
Description
Mind Map by charcrawford, updated more than 1 year ago
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Created by charcrawford
about 11 years ago
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41. Government policies affecting
business
- Government initiatives to pass laws affecting business operations
and government foreign policy towards international trade.
- The European Union
- Community of countries that form a single market as a result of laws
centred on the free movement of people, goods, services and capital.
- Consists of 28 member states, combined population
= 500 million. 23% of global nominal GDP.
- EU Expansion
- British govs in recent years supported expansion.
- Increased size of market for UK exporters: don't have to pay import
taxes or customs duties. > USA (300 million) 'Home market'
- Source of labour for British firms: cheap, skilled labour (Poland, Romania). Downward
pressure on wage rates -> helps to prevent wage inflation. Helps economy grow faster.
- British govs in recent years supported expansion.
- Community of countries that form a single market as a result of laws
centred on the free movement of people, goods, services and capital.
- A single European currency
- Benefit: ability to carry out international transactions without
the need to worry about exchange rate fluctuations.
- UK economy not suited to Euro.
- European Central Bank sets one interest rate for
all economies that use the Euro.
- Benefit: ability to carry out international transactions without
the need to worry about exchange rate fluctuations.
- Free Trade
- WTO promotes free trade. Ultimate goal = end to all
import tariffs and physical limits on goods.
- Free trade in best
interests of LEDC's?
- China + India protected infant
industries -> help long-term
- China + India protected infant
industries -> help long-term
- Govs may protect jobs in
home country by using trade
barriers. -> cost advantage.
- Can encourage development
of a new industry.
- Can encourage development
of a new industry.
- WTO promotes free trade. Ultimate goal = end to all
import tariffs and physical limits on goods.
- Legislation
- Laws passed by UK and
European parliament.
- Conservative ->
laissez-faire approach.
- Labour -> regulate
business activity.
- Employment legislation: aims to protect rights of employees i.e right to
fair pay, sick leave, maternity. Min. wage -> inc. labour costs or more
motivated? Right to contract of employment -> meets security needs or
reduces employers' flexibility.
- Consumer protection legislation: designed to ensure consumers are treated
fairly i.e does what it says, correctly labelled, safety, refunds/exchanges. -> min
legal standard means companies can't cut corners to gain a competitive edge.
- Environmental protection legislation: materials, processes, the extent of how
recyclable the product is. Additional cost with not much upside. Many feel a
sense of injustice as other firms have less stringent laws -> unfair advantages
- Health and Safety legislation: ensure safety of employees and
customers. H&S at Work Act 1974 -> major burden on employers -> safe
working environ. (physical conditions, precautions, the way hazardous
substances must be treated. 200,000 injuries + 192 deaths (09 to 10)
- Laws passed by UK and
European parliament.
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