The Legal Environment Of Business

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The Legal Environment of Business

The Legal Environment of Business

Business Environment

The elements or environmental factors impact on all businesses and organizations from a socio-economic system, more particularly, to an industry, or sector or region in a uniform way, as they provide the general framework for these companies and organizations. Each company will receive a particular company in a different way according to their own characteristics. Thus, one can say that the impact of a given phenomenon occurred in the environment can be positive or negative, varying for each company, i.e. it represents to a threat or an opportunity.


Business decisions are strongly affected by changes in the political-legal laws, government agencies and pressure groups that influence and limit organizations and individuals.

Laws, for example, can create great new business opportunities, such as those directing mandatory business. The political-legal environment, as well as other business environments are constantly changing and adapting to reality. The laws are transformed to follow the evolution of society, even if at a slower pace than this, are modified to adapt to changes in the economic and social globes. The versatility of the market and fierce competition causes ever larger changes and more rapid market and society and, consequently, in laws and rules. Therefore the trends of changes in the political-legal environment should be analyzed and their impacts for business, studied in order to make threats become apparent market opportunities for companies.

Today, according to Kotler (2012), there are two macro trends in this environment: the increment of the legislation that regulates the growth of business and special interest groups.

Legislation which regulates business

There are three primary purposes of the legislation: to defend companies from unjust competition, to protect consumers from unjust business practices and protecting the interests of society from unrestrained business conducts. Procedural rules are distinguished by their technicalities incorporating the enforcement of appeals and judgments. Jurisprudence and doctrine attach great significance to the dissimilarity between substantive law and rules of process. Ignorance of standards of this distinction can lead to workout prescription.

Over the years, this set of rules has become more complex, involving competitive performance, patterns of products, product liability and commercial transactions from countries. In US, the Code of Consumer Protection is part of this process.

Marketers need to know the background work as the main laws regulating business, protecting competition, consumers and society to which the actions proposed for promotion, sales and management comply with the legislation. For this, we need to establish legal procedures for analysis and disseminate ethical standards to guide their business managers.

Growth of special interest groups

There are social organizations that force authorities and executives to pay attention to the rights of the consumer (and other groups such as women, homosexuals, the elderly or minorities in general). Including businesses and other organizations create public affairs departments (or PR) to handle these interest groups.

The movement of housewives, for example, or other organized movements that seek to defend the rights of consumers before vendors are ...
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