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 cooperation tax. VAT is at the moment IS 20%. 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 following variables in the economy:
Aggregate demand and the level of economic activity;
The pattern of resource allocation;
The distribution of income.
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.
Another thing they focus on is enhancing the skills of the working population which includes training schemes and education. 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 run it could increase the amount of money because they will be more productive and be more skill full. Throughout Tesco's the employees may gain more qualifications throughout the working life because they may learn more trades and things like that.
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 depending on the delivery days. This also helps people who may not be able to make it to the supermarket store itself like disabled people so again it opens a new market which means they again will make more money. Tesco are always influenced by its customers and aim to operate around their needs and feedback because without their feedback Tesco's wouldn't know what they need to do to improve their business.
Affects on stakeholders
Legal factors
Businesses must operate under the framework of the law failure to comply will result in fines and possibly impressments of directors; There are many hundreds of political and legal factors which will directly or indirectly affect businesses. In fact, most laws will have some relevance if you look deep enough there is however some main business related laws which are primarily there to serve the business world. Legal factors with business include, but are not limited to, licenses & accreditation, taxes, permits & codes, liability, and Contractual. Political Factors would be affiliations with politics and/or political candidates, and dependency on political statutes and regulation. A business could flourish under one political entity, and be run out of business by another; as in additional taxes, regulations, or bans. Legal factors: these are related to the legal environment in which firms operate. In recent years in the UK there have been many significant legal changes that have affected firms' behaviour. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are examples of relatively recent laws that affect an organisation's actions. Legal changes can affect a firm's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service).
Affects on easy jet
As easy jet employs thousands of workers they must insure that they abide by the employee laws the following particularly apply to easy jet:
These include: Equal pay act (1970) - This means that all employees who are doing the same job should be paid the same wage.
Sex discrimination act (1975) - Employers must not discriminate between their employers because of their sex.
Sales of goods act (1979) - A consumer can sue a business if it sells them a product that is of poor quality, or is not as described and does not fit the purpose for which it is being sold. This is a law which affects businesses but supports the customer.
Health and safety at work act (1974) - This law ensures that employers provide healthy and safe working conditions and employees must act in a safe and responsible way.
Race relations act (1976) - Similar to the sex discrimination law; this law means that employers must not discriminate due to the race of their employers or interviewees.
Contract of employment - This is an agreement between the employer and employee. It includes conditions such as rates of pay, hours of work, holidays, pension contributions and the amount of notice that must be given if the worker wants to leave or the employer wants to make the worker redundant. Employees taken on for a month or more must be given a written statement of the conditions within two months of the date the job starts. Easy jet is subject to numerous technical directives and regulations as well as legislation or a more legal nature. The legislation covers areas such as competition law, intellectual property law, consumer protection and taxation, and emissions (air quality and fuels from air craft). When the auto parts industry reached full development, accelerated technological efforts were made to create a web of local suppliers that would make it possible to meet the growing legal requirements for the national integration of production.
Some examples of legal factors that may affect easy jet are:
- EU laws regarding competition are against airports monopolization
- Strong health and safety regulations are in place for the aviation sector
- Tickets prices advertised must be transparent to the customer
Affects on Tesco
Obviously within a company/organisation there will be company law that falls under the legal factors that affect a company’s activities. The legal Factors that could affect Tesco's activities may be company/contract law. Each of which may protect employees and consumers. Obviously they need to protect their employee’s personal details so that no one else can get a hold of them but the company itself or the employee that it relates too. There have been many incidents where employees’ details have gone missing within a company and companies have fallen apart because of it. 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 buyer will be required to pay a reasonable price. There are seven parts of this sales and good act contract which all need to be read by Tesco to make sure they agree to the terms and conditions of buying and selling products. These include the background, the contract formation, effects of the contract, contract performance, the rights of the unpaid seller and finally acts of the contract breach which is the consequences if the contract has been broken. 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 both employees and customers in the long run. 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. This act also says that employers like Tesco's with five or more employees must have a written health and safety statement which shows in the business has overall responsibility for health and safety.
Another legal issue is the discrimination law which includes the sec discrimination act 1975, the race relations act 1976, the disability act 1995, the employment equality ( religion or belief ) regulations 2003, the employment equality ( sexual orientation ) regulations 2003 and finally the employment equality ( age ) regulations 2006. All of these Tesco's have to comply with to run a successful and happy business. Without these Acts and regulations Tesco might not be as big as they are now. Tesco's must not discriminate against an employee or potential employee in any way which is directly or indirectly. Discrimination, direct or indirect is illegal.
The other legal factor would be the competition law. The purpose of this is to ensure fair and honest trading. This will allow Tesco to get reasonable prices on the products they wish to buy. However when it comes to selling they must follow the retail recommended price. For example if the RRP was 99p for a packet of cheese then Tesco's should follow that recommended price simply because it is then fair to sell on to their customers. Without the fairness in Tesco's selling prices they would probably not be as big as a company as they are now because they are global and draw many people into their stores all around the world.
Obviously Tesco's might not be the only business selling a product a number of businesses could be selling the same thing. They could all fix the prices in the same way - by forming a cartel and all agreeing to sell at the same prices. This is unfair on customers and other businesses wishing to compete with the prices and products. It is also illegal!
The government set up fair trading to stop this from happening so it gives all businesses the opportunities to compete with each other. This is called the OFT. The role of the OFT is to make sure that markets work well for all customers and giving them choices. The competition act 1998 makes these actions illegal to do. The other act (enterprise act 2002 ) gave the OFT power to give out fines and other punishments to businesses which engage in such actions. In 2009 it imposed fines totalling £129million on 103 construction companies in England who were going against the law. This would Affect Tesco's activities because they will have to make sure that all prices are fair and competitive with other companies prices to allow the general public to have a good and fair choice in products that they wish to purchase.
Social
Over time changes occur in society that has the potential to affect businesses in terms of activity and thought process, these changes can include:
- Population and demographics.
- Changes in structure.
- Household and families.
- Education.
- Attitudes to work.
- Religions.
- Attitudes to male and female roles.
- Ethics.
Social factors can affect a business as tastes and likes can change. For example, if a business that sells a lot of junk and unhealthy food and the nation is becoming more health conscious then the business will generate less revenue. Social factor affects the productivity and labour supply. An example of it includes the population structure, language ability, education level etc. Cultural factor affects the taste and preferences of costumers. Examples of it include whether a country encourages women to go out and work and emphasis on virtue of hard work.
Affects on easy jet
Social factors have a profound impact on businesses, as well as the overall marketplace. Airline companies alone have had to spend a great deal of time and money revising their policies, procedures and prices to accommodate the ever-changing influences of their customers over the years. As society changes, so must the business if it intends to thrive in the market.
One controversy surrounds the issue of airline companies tightening their seat restrictions for obese passengers. Some companies have gone as far as to charge an overweight individual the cost of two seats because of their size. This has created a stir, as it brings up the question of discrimination. As indelicate as this issue is, airline companies contend that it simply costs more to fly those more portly passengers. According to Newsweek, "A study concluded that the 4.54 Kilogram Americans gained on average during the 1990s required an additional 350 million gallons of fuel a year." So it would seem that this issue has less to do with discrimination and more to do with simple arithmetic.
Airline companies have undergone a dramatic shift in the safety precautions they take, upping the ante in security measures due to recent terrorist attacks. And while the increase in security may, on some level, ease the mind of the pilots, passengers and their families, it also increases the anxiety and frustration with the amount of time and effort it takes to get from the airport ticket counter to the terminal gate. Because of the few successful breaches in security that have occurred over the past decade, airlines will never again have the luxury of being so lax in terms of their security.
Perception is a major factor in how we view the world. It is also one of the oldest studies in psychology. How we perceive ethnicity, as it relates to air travel, has much to do with September 11, 2001. Since then the eyes of the world have grown increasingly sensitive to the ethnicity of passengers travelling on aeroplanes. It has created something of a negative perception for particular races and religions. Bloomberg Business week reports, "Airline experts and executives say it's important not to exaggerate the effects of terrorism fears." However, because airline companies have had to exercise increased security measures because of terrorism, and because passengers have grown increasingly aware of possible threats, those perceptions are not easily dismissed.
All of these psychological factors are being caused through the society of the consumers.
Affects on Tesco
As we have covered on previous pages they can be many factors affecting Tesco's activities. One of these is social factors. This could include ages (birth rates), Gender (death rates), education & skills, Religion, household income and attitude to male and female workers. Obviously the birth rate has increased over the years so they may start to look at selling children toys or products to open a new market which in the long run 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 having 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. It is basically a win win situation because if the birth rate goes up it opens up more markets for young ones for toys and other products. And if the death rate goes up they will make more money because more and more people will want to organise a funeral service. Gender also has a huge influence on Tesco's stores because they can have different sections for different genders which mean there will be something for everyone within the Tesco's stores. Obviously Tesco's 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 Tesco's they provide equal rights which means both men and woman can work there. Tesco's cannot 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's respect both male/female workers simply because the store themselves sell both male and female products so it would be common sense 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 it could cause an uprising I customers. Because Tesco's is a global company they have to take into account all sorts of people will be visiting their stores and wanting to buy products and therefore they cannot just throw someone out for believing in something that seems ridiculous to them or the store managers who may have the final say. It could also affect Tesco's activities because they may want to open up new products for different religions which again open up new markets completely and it does not single people out. Again this in the long run will help create more money for Tesco's.
Every 10 years in England, the government do a census which is just a questionnaire that is sent out to every household which covers a range of issues. It can tell us things like population growth or decline and changes to ages of the population. This information can prove very useful towards Tesco's and other businesses around it because it determines their future plans. Since Tesco's also have a Charity they will also want to know this to know their future demand of their services.
Tesco's with been a global company would have to adapt to all sorts of backgrounds. This could include targeting a new market- maybe more educated, older or even a different sex. Ensuring advertisements, promotions and activities do not offend people's religious or ethical viewpoints. This could prove crucial if they are to become/stay a global organisation because they would have to adapt and take into account all sorts of backgrounds that they will be promoting/selling towards.