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P6 Describe how political legal and social factors are impacting upon the business activities of the selected organisations and their stakeholders£2.99
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P6 – Describe how political, legal and social factors are impacting upon the business
activities of the selected organisations and their stakeholders
Political – ASDA are largely impacted by political change and this can be done various
different changes that the government can make. For example when the government
changes tax and alter business taxation this consequently can cause ASDA to raise prices or
even result to reducing costs within the business, which can lead to unemployment and
other various factors. On the other hand, a company such as the British Heart Foundation
are not affected by such changes as ASDA as they are a non-profit organisation however the
government are still able to alter the tax that a business like the BHF do pay. Resulting in
less money going to the charity and more to the government’s tax schemes, which can often
cause outrage from the public. This is why political stability is hugely important when
dealing with businesses and organisations such as ASDA and the BHF as they have different
gaols and hence should be dealt differently by the government but not so differently that it
would be more beneficial for a greedy employer to class themselves as a charity for their
own self-gain.
The government has a huge impact on a business. For example if the government changed
corporation tax this would affect ASDA hugely as the government are able to increase that
particular type of tax which would have an effect on ASDA’s profit meaning ASDA would also
have to increase the prices of their product in order to withhold their profit margins. This
can often cause a conflict with their customers who are used to pay a particular price for
product. This shows how the government can alter tax can cause a big knock on affect
within a business. In the BHF’s case the government can somewhat affect charities in a
similar way. Charities are able to avoid a lot tax such as cooperate tax as they are a non-
profit organisation, However the government has the ability to make charities pay these
particular tax even if they pay less. This can cause outrage towards the government as they
are taking money from charities to pay the wages of government employees as well as
common tax that most people pay for.
Another example of a political impact from a stakeholder on a company is the employees. If
the employment policy for companies were to increase the minimum wage, this can cause a
huge impact on business that cannot afford the new minimum wage. For example if the
minimum wage was, increased ASDA will have to pay more for each of their employees in
every store that they have open. This can result in ASDA having to cut down on the amount
of staff that they have hired at that particular time. This can have a huge impact on the
economy, as ASDA will not be the only business that would have to let staff go meaning the
unemployment rate would dramatically increase. Although the BHF employees are all
volunteers they are still focused on by the government. For example, these particular laws
also protect the volunteers that work at the BHF. This affects the organisation, as they must
ensure that all of the health and safety regulations are stuck to.
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