Employment law
The employer must include the following terms in an employment statement:
1. Names of the Employer & Employee.
2. Date the employment started
3. Pay
4. When the employee will be paid (weekly or monthly).
5. Hours of work
6. Holidays (Any holiday pay?)
7. Sickness procedure and entitlements.
8. Pension Scheme details.
9. Job Title and description of job.
10. Where the employee is expected to work.
11. The length of the contract, if the employee has been employed on a fixed term contract.
12. Maternity pay & leave (Females only)
13. Collective Agreements such as redundancy compensation
14. Rules and regulations
Employment law act covers that an employee must have a contract of employment or a statement of employment. They have the right not to be unfairly dismissed in any circumstances. BMW needs to make sure that their employees goes to the process on set of dismissal by a verbal warning, then a written letter of complaint, then a letter of resignation. Before it comes to the final stage the employee will think twice about his or her actions and cannot therefore claim compensation for unfair dismissal. If a female employee is given maternity leave but not paid for her expenses as she out of work temporarily, then this would be breaking the law.
Economic
Rates of economic growth, inflation, consumption patterns, income distribution and many other economic trends determine the necessities of products and services by consumers. BMW need to consider the state of economy in the short and long-terms. BMW need to look at:
Interest rates
Interest rates are now at their highest level since March 2001 following the Bank of England decision to raise them to 5.75%. People with mortgages and other debts may struggle with the fifth rise in 12 months. This means that customers will have less disposable income, so therefore BMW will be affected as there will be a decrease in their car sales. BMW will need to think of alternatives to produce cost effective cars but with the same quality built in which is admired by many customers.
Economic growth
Economy is expected to grow by 2.75 to 3.75 percent in 2007 and by 2.5 to 3 per cent in 2008 and 9; this will mean more people with disposable income will be purchasing BMWs due to its range of vehicles distributed showrooms across the UK and its image to luxury.
Policy towards (minimum wage and unemployment benefits)
Unemployment is when a worker is unable to work. The unemployment rate is the number of unemployed workers divided by the total civilian labor force. If there are more people out of work then employed, buying patterns of customers will drop and BMW will suffer as customers will be unable to afford a BMW.
The minimum wage is aimed at providing employees with decent minimum standards and fairness in the workplace. It applies to nearly all workers and sets hourly rates below which pay must not be allowed to fall. It helps BMW by ensuring their competitors will be able to compete on the basis of quality of the goods and services they provide and not on low prices based generally on low rates of pay.
There are different minimum wage rates for different groups of workers as follows:
- The main rate for workers aged 22 and over increased on 1 October 2007 to £5.52 an hour from £5.35 an hour
- The development rate for 18-21 year olds increased to £4.60 an hour from £4.45 an hour
- The development rate for 16-17 year old increased to £3.40 an hour from £3.30 an hour
Minimum wage updates accordingly to government’s attitude to society. If BMW staff finds that they are paid below the minimum wage, they can go on strike or a majority can lodge a complaint to their trade unions. This will stop productivity and cost the business dearly through the eyes of media and the loss of potential customers.
Inflation (effect on costs and selling prices)
Inflation is measured as the growth of the money supply in an economy, without an increase in the supply of goods and services. If inflation was to rise this will cause problems to BMW as it can prompt trade unions to demand higher wages. Also, strikes can occur, which productivity would decline.
Social
To understand the wellbeing of the social and cultural environment, this will involve close analysis of this society. Population growth, movements, changes in cultural values, family size and social behaviour will be important. The social and cultural influences on BMW vary from country to country. Such Factors that BMW need to consider:
Lifestyle changes (e.g. Home working, single households)
Now there are less women working as housewives, which mean more women are going to work to generate income. BMW can capitalize by expanding its product range, initially by producing small sports utility vehicles. This will bring potential customers as it has been rumored that women now take charge of their financial accounts in many households.
Demographics (age structure of the population; gender; family size and changing nature of occupations)
It has been proven that people are healthier and living longer. This could be an opportunity for BMW to release a vehicle that suits the needs of an elderly person such as fuel economy, the more miles to the gallon means less money spent to refuel.
Also, it has been proven that people are getting richer as their investments in businesses are growing. This will increase customer purchase power, which the customer can decide whether or not to have a BMW. If the customer decides to buy one this will increase sales and promote BMW to expand its product range even further.
Family size is reducing to two or three children maximum per household. Parents have realized that fewer children they have the more disposable income they have. Kids are very influential towards their parents as they have a better understanding of technology, which they recommend cars that they think what their parents are looking for. Some kids use their parents to drop them off to school in a prestigious car, in order to attract attention and popularity. BMW can work perfectly as a family car as the widely purchased X5 has been popular for some time.
Education
More people are staying in education and achieving degrees. This will help to get a job that they desire and quite easily on a good pay roll. They will have money to spend which yet again their purchasing power will increase. To match their job life style people intend to use sports and luxury vehicles to emphasize how well they are doing. BMW have many vehicles that can primarily make others head turn which this could be a likely asset to the customer.
Technological
Technology is vital for competitive advantage, and is a major driver of globalization. So therefore BMW must look extensively at their products’ performance against the likes of Mercedes and Lexus as well as to keep up with the technological trends such as new materials and developments in manufacturing. BMW must consider the following:
Government spending on research
The government is trying to reduce the digital divide by providing free wireless internet to those who are out of reach of cable and wire broadband. This is partly due to broadband providers have an internet bandwidth that restricts the amount of users using their network.
As the maturity of technology is developing and the use of technology (Internet) is increasing, this means that BMW can promote their vehicles even further as they can attract a wide range of internet users and become even more popular within the nation. More people will realize about BMW’s efforts to sell luxury, quality cars, which some cannot afford a BMW but they may leave recommendations to others. This can lead to increase in reputation and an increase of sales.
