1.2 Understanding the Business Environment

  • What are the sectors of the business environment, and how do changes in them influence business decisions?

Businesses do not operate in a vacuum but rather in a dynamic environment that has a direct influence on how they operate and whether they will achieve their objectives. This external business environment is composed of numerous outside organizations and forces that we can group into seven key subenvironments, as Exhibit 1.4 illustrates: economic, political and legal, demographic, social, competitive, global, and technological. Each of these sectors creates a unique set of challenges and opportunities for businesses.

Business owners and managers have a great deal of control over the internal environment of business, which covers day-to-day decisions. They choose the supplies they purchase, which employees they hire, the products they sell, and where they sell those products. They use their skills and resources to create goods and services that will satisfy existing and prospective customers. However, the external environmental conditions that affect a business are generally beyond the control of management and change constantly. To compete successfully, business owners and managers must continuously study the environment and adapt their businesses accordingly.

Other forces, such as natural disasters, can also have a major impact on businesses. While still in the rebuilding stage after Hurricane Katrina hit in 2005, the U.S. Gulf Coast suffered another disaster in April 2010 as a result of an explosion on the Deepwater Horizon oil-rig, which killed 11 workers and sent more than 3 million barrels of oil into the Gulf of Mexico. This event, which played out for more than 87 days, severely affected the environment, businesses, tourism, and people’s livelihoods. Global oil conglomerate BP, which was responsible for the oil spill, has spent more than $60 billion in response to the disaster and cleanup. Seven years after the explosion, tourism and other businesses are slowly recovering, although scientists are not certain about the long-term environmental consequences of the oil spill. 7

No one business is large or powerful enough to create major changes in the external environment. Thus, managers are primarily adapters to, rather than agents of, change. Global competition is basically an uncontrollable element in the external environment. In some situations, however, a firm can influence external events through its strategies. For example, major U.S. pharmaceutical companies have been successful in getting the Food and Drug Administration (FDA) to speed up the approval process for new drugs. 8 In recent years, the five largest companies in the S&P Index— Google , Facebook , Amazon , Microsoft , and Apple —have spent close to $50 million on lobbying activities in the nation’s capital in an effort to help policy makers understand the tech industry and the importance of innovation and an “open” internet. 9 Let’s now take a brief look at these varied environmental influences.

Economic Influences

This category is one of the most important external influences on businesses. Fluctuations in the level of economic activity create business cycles that affect businesses and individuals in many ways. When the economy is growing, for example, unemployment rates are low, and income levels rise. Inflation and interest rates are other areas that change according to economic activity. Through the policies it sets, such as taxes and interest rate levels, a government attempts to stimulate or curtail the level of economic activity. In addition, the forces of supply and demand determine how prices and quantities of goods and services behave in a free market.

Political and Legal Influences

The political climate of a country is another critical factor for managers to consider in day-to-day business operations. The amount of government activity, the types of laws it passes, and the general political stability of a government are three components of political climate. For example, a multinational company such as General Electric will evaluate the political climate of a country before deciding to locate a plant there. Is the government stable, or might a coup disrupt the country? How restrictive are the regulations for foreign businesses, including foreign ownership of business property and taxation? Import tariffs, quotas, and export restrictions also must be taken into account.

In the United States, laws passed by Congress and the many regulatory agencies cover such areas as competition, minimum wages, environmental protection, worker safety, and copyrights and patents. For example, Congress passed the Telecommunications Act of 1996 to deregulate the telecommunications industry. As a result, competition increased and new opportunities arose as traditional boundaries between service providers blurred. Today the dramatic growth in mobile technology has changed the focus of telecommunications, which now faces challenges related to broadband access and speed, content streaming, and much-needed improvements in network infrastructure to address ever-increasing data transmissions. 10

Federal agencies play a significant role in business operations. When Pfizer wants to bring a new medication for heart disease to market, it must follow the procedures set by the Food and Drug Administration for testing and clinical trials and secure FDA approval. Before issuing stock, Pfizer must register the securities with the Securities and Exchange Commission . The Federal Trade Commission will penalize Pfizer if its advertisements promoting the drug’s benefits are misleading. These are just a few ways the political and legal environment affect business decisions.

States and local governments also exert control over businesses—imposing taxes, issuing corporate charters and business licenses, setting zoning ordinances, and similar regulations. We discuss the legal environment in greater detail in a separate appendix.

Demographic Factors

Demographic factors are an uncontrollable factor in the business environment and extremely important to managers. Demography is the study of people’s vital statistics, such as their age, gender, race and ethnicity, and location. Demographics help companies define the markets for their products and also determine the size and composition of the workforce. You’ll encounter demographics as you continue your study of business.

Demographics are at the heart of many business decisions. Businesses today must deal with the unique shopping preferences of different generations, which each require marketing approaches and goods and services targeted to their needs. For example, the more than 75 million members of the millennial generation were born between 1981 and 1997. In 2017 they surpassed baby boomers as America’s largest generation. 11 The marketing impact of millennials continues to be immense. These are technologically savvy and prosperous young people, with hundreds of billions of dollars to spend. And spend they do—freely, even though they haven’t yet reached their peak income and spending years. 12 Other age groups, such as Generation X—people born between 1965 and 1980—and the baby boomers—born between 1946 and 1964—have their own spending patterns. Many boomers nearing retirement have money and are willing to spend it on their health, their comforts, leisure pursuits, and cars. As the population ages, businesses are offering more products that appeal to middle-aged and senior markets. 13

In addition, minorities represent more than 38 percent of the total population, with immigration bringing millions of new residents to the country over the past several decades. By 2060 the U.S. Census Bureau projects the minority population to increase to 56 percent of the total U.S. population. 14 Companies recognize the value of hiring a diverse workforce that reflects our society. Minorities’ buying power has increased significantly as well, and companies are developing products and marketing campaigns that target different ethnic groups.

Social Factors

Social factors—our attitudes, values, ethics, and lifestyles—influence what, how, where, and when people purchase products or services. They are difficult to predict, define, and measure because they can be very subjective. They also change as people move through different life stages. People of all ages have a broader range of interests, defying traditional consumer profiles. They also experience a “poverty of time” and seek ways to gain more control over their time. Changing roles have brought more women into the workforce. This development is increasing family incomes, heightening demand for time-saving goods and services, changing family shopping patterns, and impacting individuals’ ability to achieve a work-life balance. In addition, a renewed emphasis on ethical behavior within organizations at all levels of the company has managers and employees alike searching for the right approach when it comes to gender inequality, sexual harassment, and other social behaviors that impact the potential for a business’s continued success.

Managing Change

Balancing comes easy at h&r block.

In an industry driven by deadlines and details, it’s hard to imagine striking a balance between work and everyday life for full-time employees and seasonal staff. Fortunately, the management team at H&R Block not only believes in maintaining a strong culture, it also tries to offer flexibility to its more than 70,000 employees and seasonal workers in 12,000 retail offices worldwide.

Based in Kansas City, Missouri, and built on a culture of providing exceptional customer service, H&R Block was recently named the top U.S. business with the best work-life balance by online job search site Indeed. Analyzing more than 10 million company reviews by employees, Indeed researchers identified the top 20 firms with the best work-life balance. H&R Block headed the 2017 list, followed by mortgage lender Network Capital Funding Corporation , fast food chain In-N-Out Burger , Texas food retailer H-E-B , and health services company Kaiser Permanente , among others.

According to Paul Wolfe, Indeed’s senior vice president of human resources, empathy on the part of organizations is a key factor in helping employees achieve balance. Wolfe says companies that demonstrate empathy and work diligently to provide personal time for all employees tend to take the top spots on the work-life balance list. “Comments we have seen from employee reviews for these companies indicate ‘fair’ and ‘flexible work environments,’” he says. Surprisingly, none of the tech companies known for their generous work perks made the top 20 list in 2017.

In this 24/7 world, when no one is far from a text or tweet, finding time for both family and work can be difficult, especially in the tax services industry, which is so schedule driven for a good part of the year. Making a commitment to help workers achieve a healthy work-life balance not only helps its employees, but it also helps H&R Block retain workers in a tight labor market where individuals continue to have choices when it comes to where and for whom they want to work.

  • How does management’s support of employee work-life balance help the company’s bottom line?
  • What can other organizations learn from H&R Block when it comes to offering employee perks that encourage personal time for workers even during the busy tax season?

Sources: “Career Opportunities,” https://www.hrblock.com, accessed May 25, 2017; “About Us,” http://newsroom.hrblock.com, accessed May 25, 2017; Abigail Hess, “The 20 Best Companies for Work-Life Balance,” CNBC, http://www.cnbc.com, May 4, 2017; Kristen Bahler, “The 20 Best Companies for Work-Life Balance,” Money, http://time.com, April 20, 2017; Rachel Ritlop, “3 Benefits Companies Can Provide to Boost Work-Life Balance,” Forbes, http://www.forbes.com, January 30, 2017.

The application of technology can stimulate growth under capitalism or any other economic system. Technology is the application of science and engineering skills and knowledge to solve production and organizational problems. New equipment and software that improve productivity and reduce costs can be among a company’s most valuable assets. Productivity is the amount of goods and services one worker can produce. Our ability as a nation to maintain and build wealth depends in large part on the speed and effectiveness with which we use technology—to invent and adapt more efficient equipment to improve manufacturing productivity, to develop new products, and to process information and make it instantly available across the organization and to suppliers and customers.

Many U.S. businesses, large and small, use technology to create change, improve efficiencies, and streamline operations. For example, advances in cloud computing provide businesses with the ability to access and store data without running applications or programs housed on a physical computer or server in their offices. Such applications and programs can now be accessed through the internet. Mobile technology allows businesses to communicate with employees, customers, suppliers, and others at the swipe of a tablet or smartphone screen. Robots help businesses automate repetitive tasks that free up workers to focus on more knowledge-based tasks critical to business operations. 15

Concept Check

  • Define the components of the internal and the external business environments.
  • What factors within the economic environment affect businesses?
  • Why do demographic shifts and technological developments create both challenges and new opportunities for business?

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Access for free at https://openstax.org/books/introduction-business/pages/1-introduction
  • Authors: Lawrence J. Gitman, Carl McDaniel, Amit Shah, Monique Reece, Linda Koffel, Bethann Talsma, James C. Hyatt
  • Publisher/website: OpenStax
  • Book title: Introduction to Business
  • Publication date: Sep 19, 2018
  • Location: Houston, Texas
  • Book URL: https://openstax.org/books/introduction-business/pages/1-introduction
  • Section URL: https://openstax.org/books/introduction-business/pages/1-2-understanding-the-business-environment

© Apr 5, 2023 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

Module 5: Legal Environment

Why it matters: legal environment, why summarize the role of the legal system in governing and shaping the climate for business.

Imagine yourself in the following story: when you were in high school, you sometimes worked for your father, a house painter. Once you were in college, you decided to take advantage of that experience to earn some extra money during your summer vacation. You set yourself up as a house-painting business and hired your college roommate to help you out.

One fine summer day, the two of you were putting a coat of Misty Meadow acrylic latex on the exterior of a two-story Colonial. You were working on the ground floor around the door of the house while your roommate was working from scaffolding over the garage. Looking up, you noticed that—despite several warnings—your roommate placed his can of paint at his feet rather than having fixed it to the ladder bracing the platform. You were about to say something yet again, but it was too late: he accidentally kicked the bucket (so to speak), which then bounced off the homeowner’s red sports car, denting the hood and splattering it with Misty Meadow.

As luck would have it, the whole episode was witnessed by the homeowner’s neighbor, who approached the scene of the disaster just as your roommate climbed down from the scaffold. “Man, you must be dumber than a bag of hammers,” the neighbor said to your roommate, who was in no mood for unsolicited opinions—and before you knew what was happening, he broke the neighbor’s nose with a single well-placed punch.

The homeowner sued you and your roommate for negligence, and the neighbor sued you and your roommate for assault and battery.

In this module, we will discuss how our legal system shapes the business environment. We will explore how legal situations like this and others could impact your business.

  • Revision and adaptation. Authored by : Linda Williams and Lumen Learning. License : CC BY-NC-SA: Attribution-NonCommercial-ShareAlike
  • Exploring Business. Provided by : Saylor Academy. Located at : https://saylordotorg.github.io/text_exploring-business-v2.0/s20-02-criminal-versus-civil-law.html . License : CC BY-NC-SA: Attribution-NonCommercial-ShareAlike

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The Oxford Handbook of Business and the Natural Environment

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The Oxford Handbook of Business and the Natural Environment

8 Business and Environmental Law

Cary Coglianese is the Edward B. Shils Professor of Law, Professor of Political Science, and Director of the Penn Program on Regulation, University of Pennsylvania.

Ryan Anderson is an Associate at Winston & Strawn LLP.

  • Published: 02 January 2012
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This article discusses the influence of environmental law on the environment and the economy. Businesses seek to influence the stringency and design of environmental law by lobbying legislators and officials at environmental agencies. Sometimes business groups play a formal, collaborative role in the development of environmental regulations. The basic types of regulatory design for environment are presented. Environmental law can affect underlying environmental conditions and other policy criteria. The global reach of business in today's economy, combined with the global scope of some of the most salient environmental problems, increasingly creates new challenges for business and environmental law. One set of challenges centers on the complexity of the legal environment within which multinational corporations and other businesses engaged in global transactions must operate. The global nature of some of the most pressing environmental problems has created a related set of challenges linked with achieving international cooperation and coordination.

Governments around the world have used law to influence business behavior so as to reduce pollution and conserve energy and other natural resources. The dramatic expansion in the scope, volume, and detail of environmental law over the past several decades has made law a ubiquitous factor that cannot be ignored in any attempt to understand the relationship between business and the environment. Researchers investigating environmental law have made considerable progress in categorizing and analyzing the advantages and disadvantages of discrete types of environmental laws, in studying the ways that government inspection authorities enforce environmental law, in identifying the factors that explain business compliance with law, and finally in empirically evaluating the ultimate impact of law on both environmental and business conditions.

Sources of Environmental Law

Environmental law emanates from a variety of sources, as shown in Table 8.1. At a global level, treaties and other international agreements addressing a variety of environmental problems have emerged in recent decades. These treaties range from the Convention on International Trade in Endangered Species (CITES) to the Montreal Protocol on Substances that Deplete the Ozone Layer, from the UN Convention on the Law of the Sea to the Framework Convention on Climate Change. Although international law does not directly impose legal obligations on businesses, the obligations that treaties impose on nation-states typically require passage of domestic laws that impose enforceable legal duties on businesses. In establishing laws enforceable on businesses, nation-states face not only obligations under international environmental law but also constraints on their authority under international trade law. The General Agreement on Tariffs and Trade, as well as rules created under the framework of the World Trade Organization (WTO), may preclude nations from adopting certain environmental standards if doing so would discriminate against foreign importers (Bernasconi-Osterwald et al. 2006 ).

The European Union (EU) is a creature of international law, originating in 1957 primarily as a trading alliance but gaining new authority over the years through additional treaties, so that today EU institutions possess legal authority over certain environmental matters. As with international law more generally, EU directives impose obligations on member states rather than directly on private parties. But some EU regulations, such as the EU's 2007 regulation of chemicals known as REACH, do impose obligations directly on private businesses (Applegate 2008 ). As a result, collectively, EU law may more appropriately be considered a source of “quasi-international law.”

In Germany, the Netherlands, Spain, and some other European countries, national constitutions contain provisions obligating the government to establish environmentally protective laws, although these provisions tend to be aspirational rather than judicially binding (Seerden, Heldeweg, & Deketelaere 2002 ). The United States has no comparable constitutional provision guaranteeing a right to a clean environment, but constitutional language granting authority to the US national government to regulate interstate commerce must nevertheless provide the basis for Congress to adopt federal environmental legislation.

With the exception of certain EU regulations, then, domestic legal authorities constitute the primary source of law that directly imposes obligations on businesses—as well as the source of any corresponding punishment for failure to comply with these obligations. Within each country, business obligations arising from domestic law may emanate from constitutional provisions (which are treated as the highest legal authority in a country), legislation (or statutes), and, finally, rules and policies adopted by ministries or administrative agencies. These laws, especially statutes and administrative rules, can be adopted by national governments or by state or local authorities, at least when governmental authority is subdivided along federal-state lines within a country.

In the United States, as in other developed countries, federal legislation now establishes the overarching framework of environmental law obligations to which businesses are subjected. For example, the US Clean Water Act makes it illegal for any company to discharge pollution into a waterway without a government permit, while the Endangered Species Act makes it illegal for private landowners to kill or destroy the habitat of endangered or threatened species (Lazarus 2004 ). Such national legislation often authorizes national environmental ministries or agencies to create more specific regulatory standards or regulations. The US Clean Air Act, for example, authorizes the Environmental Protection Agency (EPA) to develop motor vehicle emissions standards and impose these standards on manufacturers of cars and trucks.

In addition to national legislation and regulations, domestic environmental law can emanate from states or provinces as well as from local governments. For example, Rome has its own municipal recycling laws and California has its own rules on toxic pollution. Even when national legislation sets a broad framework for environmental standards, actual implementation may depend on state legal authorities. For example, although the US Clean Air Act authorizes the EPA to set national air quality standards, the actual emissions limits that factories must meet are creatures of state law, crafted under plans approved by the national EPA. The US environmental law system can be described as one of “cooperative federalism” because of the coordination of laws adopted at both the national and state levels of government (Percival 1995 ).

Finally, although not technically “laws,” various non-binding, sometimes even non-state, rules or norms affect and constrain businesses in their environmental management. These so-called soft laws include aspirational statements by international organizations (see Delmas & Toffel [Chapter 13 ] this volume), such as the United Nations’ non–legally binding principles on the management and sustainable development of forests, the “Forest Principles,” adopted at the United Nations’ 1992 environmental conference in Rio de Janeiro. Soft law also includes principles and standards adopted by nongovernmental organizations that create norms of business practice or that customers may sometimes require their suppliers to implement, such as the International Organization of Standardization (ISO) standards on environmental management systems (Prakash & Potoski 2006 ). Although failure to comply with these standards may elicit no formal, government-imposed penalty, customer and community pressures at times may make them function as effectively as if they were binding law.

Making Environmental Law

As should be evident, sources of environmental law can be distinguished by their legal pedigree, that is, by the types of institutions from which they emanate. An entirely different way to think of the “sources” of environmental law is to focus on its political origins. Political scientists and legal scholars have written widely on the sources of environmental law in this latter sense, emphasizing the social and political factors giving rise to the growth in environmental regulation in the developed world over the last thirty years (Elliott et al. 1985 ; Coglianese 2001 ; Keohane, Revesz, & Stavins 1998 ; Vig & Kraft 2009 ). Expanding economic development has tended to lead to greater public support for environmental quality (Inglehart 1997 ). Dramatic environmental disasters such as oil spills and leakage from hazardous waste dumps have also played a role in making salient certain environmental issues and inducing legislative responses (Coglianese 2001 ).

In the making of environmental law, businesses play significant roles (Kamieniecki 2006 ). Businesses seek to influence the stringency and design of environmental law by lobbying legislators and officials at environmental agencies. Such governmental officials often welcome and encourage input from the businesses they regulate, because business possesses information government officials need to write effective regulations (Coglianese 2007 ). Although businesses can and do shape environmental laws, this does not mean that business groups always succeed (Kraft & Kamieniecki 2007 ). On the contrary, environmental regulations continue to be adopted, even though many of them impose substantial burdens on business firms.

Sometimes business groups play a formal, collaborative role in the development of environmental regulations. In Europe, for example, some countries have institutionalized the role of business in policymaking through more permanent—so-called corporatist—policy structures that give industry associations an official function in the development of new environmental policies. Scruggs ( 2001 ) has suggested that European countries with such corporatist policy structures achieved, somewhat surprisingly, greater environmental gains in the 1980s and 1990s than other countries without such structures. However, subsequent work by Neumayer ( 2003 ) shows that the strength of progressive and green political parties, rather than corporatist structures, best explains variation in pollution levels across Europe.

In the United States, the EPA has on a few occasions experimented with negotiated rulemaking , a process by which the agency explicitly invites business firms (and other interested organizations) to meet with agency officials to seek a consensus on the parameters of a new regulation (Coglianese 1997 ). Most of the time, however, the agency develops regulations through a process called notice-and-comment rulemaking , during which businesses offer input and feedback about rules proposed and developed by agency staff. Whether through informal or formal means, businesses provide information and seek to influence environmental law, although the existence of strong environmental groups, political parties, and publics that are broadly supportive of environmental concerns have ensured that such laws remain intact even during difficult economic times.

Designing Environmental Law

Environmental law takes many forms. It can require businesses to install specific types of equipment ( means standards ) or it can call on them to achieve specified outcomes ( performance standards ). These two types of regulatory designs have been used extensively throughout the history of environmental law. More recently, nations have experimented with innovative approaches to environmental law, including market-based instruments , information disclosure , and management-based regulation . Social scientists and policy analysts have studied each of these five basic types of regulatory designs and have reached a series of generalizations about the advantages and disadvantages of each type.

Under the first type of regulatory design—what we call means standards, or others have called specification or technology standards —businesses are required to install pollution-control technologies or adopt specific practices used in their production processes. For example, government can mandate that large, coal-powered utility plants install scrubbers that remove pollutants that go up through the plants’ smokestacks. Such technology standards usually are, relatively speaking, easy to administer. When the government mandates that a specific technology be used in a plant, its costs of inspecting for compliance are relatively low because agency inspectors simply need to see if the plant has the required technology installed. Means standards’ ease of administration, however, comes at the cost of efficiency. By forcing all firms to adopt the same technologies, firms are unable to use other means that would achieve the same level of pollution control but at a lower cost.

The second type of regulatory design—performance standards—reduces some of the inflexibility of means standards. Performance standards limit firms’ emissions levels but leave it up to them to decide the means they will use to achieve those levels. In this way, performance standards give firms the opportunity to innovate and find less costly ways of achieving environmental goals (Coglianese, Nash, & Olmstead 2003 ; Viscusi 1983 ). Of course, from the standpoint of the government, performance standards can be more difficult to administer because determining compliance requires measuring actual emissions levels rather than just observing whether a firm has installed a specific type of technology. In the case of coal-powered utility plants, for example, measuring performance may require installing monitoring equipment in smokestacks or running tests in the area around a plant.

Although performance standards provide more flexibility to regulated firms than means standards, they too have been criticized for inflexibility in requiring all firms to achieve the same outcomes. For certain kinds of environmental problems, namely those that arise from pollutants that build up in a common watershed or air quality region, a third type of regulatory design—market-based instruments—can prove more cost-effective than either means or performance standards. Market-based instruments can take the form of environmental taxes or emissions trading (Tietenberg 1990 ).

Environmental taxes place a price on the incremental release of pollution. If the government can set the marginal tax rate at a level equal to the social costs the pollution imposes, firms should reduce their pollution to the socially optimal level. However, if rates are set too high, a lower-than-optimal level of pollution will result. Firms will end up paying to control more emissions than is needed, given lower corresponding social gains from those extra levels of control. On the other hand, if tax rates are set too low, then more pollution will be generated than desirable. To achieve the full advantages of environmental taxes, then, government must be able to set the correct rates.

Emissions trading can be used when government does not know the optimal tax rate but does have in mind a preferred or acceptable overall level of emissions. Under emissions trading, the government establishes an overall cap on emissions at the desired level and distributes permits that allow firms to release increments of pollution that add up to the level of the cap (Hahn & Hester 1989 ). Firms can then trade these permits among themselves. Firms that can abate pollution cheaply have an incentive to reduce to below their permitted level and sell their excess credits to other firms that face higher abatement costs. For society, the same overall level of emissions reductions can be obtained at costs lower than if all firms had to meet uniform emissions limits (Stavins 1998 ).

The fourth regulatory design is mandated information disclosure. One of the most prominent examples of this type is the US Toxics Release Inventory (TRI), which requires certain businesses to report publicly how much toxic pollution they emit. Consumers and community members can use the information to place pressure on firms to reduce their pollution (Hamilton 2005 ). Another example of information disclosure can be found in regulations promulgated under the US Securities Act and the Exchange Act. Although securities laws have long required disclosure of financial information, the US Securities and Exchange Commission now requires disclosure of information about certain aspects of environmental management when legal compliance and liability have significant material effects on publicly traded companies’ financial positions (Monsma & Olson 2007 ).

Finally, the fifth basic type of regulatory design is management-based regulation (Coglianese & Lazer 2003 ; Braithwaite 1982 ). Under this design, firms must undertake specific management activities, such as environmental planning. For example, the US EPA requires large chemical facilities to develop Risk Management Plans to identify hazards and implement actions designed to reduce accidents. Another example is the Massachusetts Toxics Use Reduction Act, which requires large chemical facilities to develop written plans to reduce their use of toxic substances—although firms are not actually required to implement their plans, just to develop them (Bennear 2007 ). Even though management-based regulations do not always require firms to disclose their plans to the public or even implement the plans they develop, by mandating planning government officials seek to focus the attention of firms’ managers on environmental problems and spur them to identify steps they can take to improve environmental performance.

Enforcing Environmental Law

However they are designed, environmental laws and regulations matter to businesses because they are backed up by the threat of penalties for noncompliance. For example, many US environmental statutes provide for the imposition of up to $25,000 in civil penalties per day of violation, which means that fines imposed on an individual firm can easily reach in the millions of dollars just for a single ongoing offense. Given how extensive and complex environmental regulations have become, even a modestly straightforward business operation can have a difficult time conducting its operations in full compliance, and therefore runs the risk of violating numerous different environmental requirements, each with its own associated daily penalties. In addition, especially egregious and dangerous environmental violations can be punished with criminal fines imposed on either the firm or its management. As a result, business owners and corporate officers can and do spend time in jail for violating environmental regulations (Cohen 1992 ).

Researchers have sought to explain variation in the frequency of regulatory inspections, the frequency and size of penalties, and the overall “style” of regulatory enforcement. Such enforcement styles have generally been characterized as either adversarial or cooperative (Hawkins 1984 ). Inspectors exhibit an adversarial style when they “go by the book,” viewing their primary role as law enforcers and rigidly imposing fines according to the letter of the law in order to punish offenders. By contrast, cooperative inspectors tend to see their role more as problem solvers, seeking to identify areas in need of improvement and working collaboratively with firms to ensure that they come into compliance with environmental rules. In reality, most enforcement officials’ behavior probably lies somewhere between the extremes of this cops-to-consultants continuum, and it may vary over time or across interactions, even with the same firms (May & Winter 1999 ). Informed by the insights of game theory, regulatory scholars have suggested that regulators may be more effective if they adapt their style to the behavior of the business firm (Scholz 1984 ; Ayres & Braithwaite 1992 ). In other words, inspectors can initiate interaction in a cooperative manner, but then shift to an adversarial mode if their cooperation is not reciprocated by a regulated firm.

Empirical research reveals a number of factors that affect regulators’ enforcement behavior. First, political culture appears to matter. An adversarial, by-the-book style appears more likely when regulators and their discretion meet with mistrust by the public or by other government officials (Bardach & Kagan 1982 ). Researchers have pointed to the division of governmental authority in the United States as contributing to greater adversarialism because inspectors better avoid criticism and charges of so-called regulatory capture when they go by the book.

Second, regulatory enforcement can be affected by the political ideology of the officials in charge of enforcement agencies. For example, federal and state environmental enforcement patterns in the United States appear to vary depending on the political party in control of the White House or the governor's office (Atlas 2007 ; Ringquist 1995 ). Enforcement agencies appear to have a tendency toward less stringent environmental enforcement under Republican administrations than under Democratic ones. Legislators can also influence regulatory agencies’ enforcement strategies through investigations and budgetary control (Wood & Waterman 1991 ).

Third, regulatory enforcement may be affected by jurisdictional competition. Pressures to attract business investment may lead states or other political subdivisions to compete with each other in a “race to the bottom,” as each jurisdiction reduces enforcement scrutiny to lower levels to become business friendly (Atlas 2007 ). Although such race-to-the-bottom pressures can be real, the game of regulatory competition in practice is more complicated, as regulatory agencies not only face pressures to encourage economic development but also confront countervailing pressures emanating from the public to maintain a quality environment (Konisky 2007 ; Vogel 1995 ).

Finally, regulatory officials’ enforcement behavior can be affected by characteristics of businesses themselves. Large, public companies appear to find themselves on the receiving end of more cooperative enforcement strategies than do smaller companies (Shover et al. 1984 ). This may be because they have their own teams of internal compliance professionals who share a common orientation with regulatory inspectors; they may also have a greater incentive to respond cooperatively to initial overtures of cooperation by inspectors because they believe they have more to lose by becoming the target of adversarial confrontations. Firms that do a better job of complying with environmental law—and even go above and beyond legal requirements in their pollution control efforts—appear also to receive more relaxed scrutiny by enforcement officials (Decker 2005 ; Sam & Innes 2008 ).

Complying with Environmental Law

Why do some firms do a better job managing their environmental performance? Government enforcement is clearly part of the answer—but it is only part. Researchers have identified three sets of factors that explain variations in firms’ environmental performance: regulatory, social, and economic. Together, these factors effectively constitute each firm's “license to operate,” as the firm must respond to each type of pressure in order to survive (Gunningham, Kagan, & Thornton 2003 ).

As already suggested, business managers can be expected to respond to regulatory pressures because of the threat of penalties for noncompliance. Their decisions (assuming they are fully and not boundedly rational) will balance the benefit to be received—or costs to be saved—from failing to comply with the law against the probability of getting caught for noncompliance and the penalty they would face if they were caught. If the expected penalty (that is, probability times penalty) is higher than the benefits of noncompliance, they will comply with the law (Becker 1968 ). Gunningham, Kagan, & Thornton ( 2003 ) point to tightening water pollution regulations as a primary factor explaining why pulp-and-paper mills around the world have installed expensive pollution-control equipment.

Social pressures tend to reinforce regulatory pressures (see Lounsbury, Fairclough, & Lee [Chapter 12 ] this volume). Aoki & Cioffi ( 1999 ) show that, despite fewer inspections, Japanese firms actually comply with waste disposal regulations more consistently than US firms do—perhaps as a result of stronger social pressures to comply in Japan. Social pressures can also offer reasons for businesses to take environmentally protective measures even if they are not required to do so by law. Individuals and community groups may exert this pressure either directly by seeking to influence facility managers or indirectly by activating increased scrutiny by governmental officials. As Gunningham, Kagan, & Thornton ( 2003 : 37) observe, “a company's failure to meet social expectations concerning environmental performance can impair the firm's reputation, adversely affecting recruiting, and trigger demands for more stringent and intrusive legal controls.”

Often working against social and regulatory pressures are the economic pressures that bear down on firms. Firms respond to shareholder demands for returns on their investments. In competitive markets, firms that assume additional costs for environmental controls beyond those required by law may be less able to compete for market share, risking not only reduced shareholder returns but, at some point, even their own survival (Thornton, Kagan, & Gunningham 2008 ). Of course, in some cases firms have been able to use their image as responsible environmental actors to their economic advantage (Reinhardt 2000 ), although it is far from clear how strong or widespread such advantages might be. Given the need for environmental regulation, presumably the economic advantages from investments in environmental management are neither strong nor widespread enough to generate socially optimal levels of environmental control.

The concept of a license to operate highlights how external regulatory, social, and economic pressures come together to affect business behavior. Because these external pressures can vary for different firms, they may help explain the different levels of pollution control and legal compliance achieved by different firms. Of course, even firms that confront similar external pressures may nevertheless vary in their environmental behavior and performance. As much as external pressures matter, so too do the characteristics of businesses themselves as well as their internal organizational features. Easily observable internal features such as the size and age of businesses may make a difference to their levels of environmental compliance, but so too can less tangible qualities such as management style or commitment (Gunningham, Kagan, & Thornton 2003 ; Coglianese & Nash 2001 ). Businesses appear to be affected by an “internal license” consisting of factors such as organizational culture or identity and management incentives (Howard-Grenville, Nash, & Coglianese 2008 ). Internal factors such as organizational norms or managers’ personal commitments to the environment may create independent pressures for environmental excellence (Vandenbergh 2003 ). These internal factors also influence how managers perceive and respond to the external pressures bearing down on their firms.

Impacts of Environmental Law

Judging from progress made over the past several decades, it would appear that environmental law has had a substantial impact on pollution levels. According to a number of measures, developed countries have exhibited a substantial decline in pollution in the years following the widespread adoption of environmental regulation (Davies & Mazurek 1998 ; Bok 1996 ). Environmental conditions ranging from air and water quality to cleaned-up hazardous waste sites have shown improvement across much of the developed world, as some of the most visible environmental problems—such as belching smokestacks or burning rivers—have been ameliorated (Coglianese 2001 ). Yet, whether these improvements stem from regulation and its enforcement or from other factors, such as a shift away from manufacturing and other pollution-intensive industries toward a service-based economy, is ultimately an empirical question that requires careful analysis.

Too often, policy analysts and scholars have observed the passage of a law and a subsequent decline in pollution, and then jumped to the conclusion that the law must explain the observed decline. For example, the passage of the US Toxic Release Inventory (TRI) in the late 1980s—an information disclosure regulation—has been said to have led to a decline of more than 40 percent in toxic emissions (Fung & O’Rourke 2000 ). Thaler & Sunstein ( 2008 : 192) call TRI “the most unambiguous success” of any US environmental regulation, “spurring large reductions in toxic releases throughout the United States.” But to determine whether TRI actually caused a decline calls for making an inference about what would have happened to toxic emissions in the absence of TRI. If such emissions were already on the decline before the passage of TRI, then not all of the decline after its passage should be attributed to TRI. Similarly, if the US government's passage of new (non-TRI) hazardous air pollutant regulations in 1990 led to reductions in releases of toxic chemicals, then again not all of the observed decline after 1990 should be attributed to TRI (Hamilton 2005 ).

The empirical record overall shows that some environmental laws appear to have resulted in improvements while others have not had their intended effects (Bennear 2007 ; McKitrick 2007 ; Hamilton & Viscusi 1999 ; Davies & Mazurek 1998 ; Revesz & Stewart 1995 ; Ackerman & Hassler 1981). Even when environmental law does lead to improved environmental conditions, the improvements properly attributable to law (as opposed to other factors) can sometimes fall short of the full degree of environmental improvements observed. For example, Greenstone's (2004) study of the effects of the US Clean Air Act on sulfur dioxide concentrations shows that the areas designated under the Act as “non-attainment,” and therefore subject to more stringent regulation, do see more significant reductions in sulfur dioxide (SO 2 ) in the ambient air. But when other factors are controlled for, the additional reductions either disappear or become substantively quite small.

In addition to affecting underlying environmental conditions, environmental law can impact other policy criteria, such as technological innovation, the distribution of environmental risks, compliance costs to regulated firms, and corporations’ international competitiveness. The annual costs associated with environmental law in the United States, for example, have been estimated to reach into the hundreds of billions of dollars (Jaffe et al. 1995). Critics of environmental law have sometimes claimed that imposing environmental compliance costs on businesses lowers their competitiveness, contributing to a flight of manufacturing jobs overseas. Although clear differences do exist across countries in environmental laws and the resulting costs of compliance (Hammitt et al. 2005; Stewart 1993 ), and some research does indeed suggest that environmental standards can be associated with job flight (Greenstone 2002 ), manufacturing flight from countries such as the United States appears instead to stem primarily from other, more significant differences in economic conditions, such as labor costs (Cole & Elliott 2007 ; Jaffe et al. 1995).

Business scholar Michael Porter has suggested that stricter environmental regulations can actually enhance businesses’ competitiveness. He argues that businesses respond to regulatory demands by finding more innovative and efficient ways to operate, ways that not only reduce pollution but also deliver cost-savings or other bottom-line advantages (Porter & Van der Linde 1995 ). Numerous anecdotes seem to support this win-win or “green-to-gold” hypothesis (Reinhardt 2000 ; Esty & Winston 2006 ). Yet, although businesses can sometimes profit from going the extra mile in the way they manage their environmental impacts, this does not mean that they generally reap rewards from pollution control measures or that environmental regulation yields only positive net effects for companies. If firms could generally benefit from investing in pollution abatement technology, one would expect that, given their underlying profit motive, they would do much more such abatement on their own. The fact that countries find environmental regulation to be needed in the first place to address the negative side effects of business operations would suggest that firms do not, on their own, have enough of a private gain from pollution control (Palmer, Oates, & Portney 1995 ). Business lobbying groups’ rather consistent mobilization opposing additional environmental regulation would seem to belie the view that regulation constitutes a clear economic advantage to business (Kraft & Kaminecki 2007 ).

Environmental Law in the Global Society

The global reach of business in today's economy, combined with the global scope of some of the most salient environmental problems, increasingly creates new challenges for business and environmental law. One set of challenges centers on the complexity—even, at times, the inconsistency—of the legal environment within which multinational corporations and other businesses engaged in global transactions must operate (see Christmann & Taylor [Chapter 3 ] this volume). Multi-national corporations may desire to coordinate their business and production activities to reap economies of scale, but they also need to take into account the fact that the different jurisdictions within which they operate may impose vastly differing environmental standards (Kagan & Axelrad 2000 ). These regulatory differences may at times impede more efficient business practices or the development of new technologies, particularly in cutting-edge fields such as biotechnology or nanotechnology. If nothing else, transnational regulatory conflicts can increase the transaction costs of global business and, at the extreme, can also wreak havoc on global trade if environmental standards become a ruse for protectionism.

In an effort to respond to concerns about the ill effects of regulatory competition and transnational legal conflicts, national environmental officials do engage in cross-national dialogue and efforts at regulatory harmonization through international forums. In addition, the World Trade Organization (WTO) has on occasion ruled against national environmental standards that do not apply equally to both domestic and foreign businesses. In 1996, for example, the WTO ruled against the United States over an EPA regulation on reformulated gasoline because the standards for importers of foreign fuel were more strict than those for domestic oil refiners (McCrory & Richards 1998 ).

The global nature of some of the most pressing environmental problems has also created a related set of challenges associated with achieving international cooperation and coordination. Environmental problems such as climate change cannot be readily solved by each individual country deciding whether to set its own standards. Global climate change demands collective action because, even if one country succeeds in reducing emissions of greenhouse gases within its own borders, if other countries do nothing the problem will not lessen (Wiener 2007 ). Pollutants emitted in one country enter the atmosphere and can affect climate everywhere, which means that countries must act in concert to reduce the risks posed by emissions in any significant way.

International collective action is not easy, as the checkered history of cooperation to address climate change attests. Not only does scientific uncertainty mean that different actors assess the benefits of emissions control regulation differently, but the costs of control also vary considerably. Emerging economic powerhouses such as China and India argue that they should not be subject to the same level of emissions abatement as developed economies such as the United States and Western Europe, which long ago exploited carbon-based energy as the backbone of their economic development. In return, developed countries argue that, although they did emit more carbon dioxide in the past, they were unaware of the dangers it caused to the environment and therefore should not be held responsible for those past emissions. Further complicating international cooperation have been the general incentive effects—such as free riding and holdouts—that work against collective action in any setting (Olson 1968 ). For all these reasons, when environmental problems go global, the legal responses to those problems grow ever more challenging to implement.

Avenues for Future Research

Whether addressing global or domestic problems, environmental law raises numerous important questions for researchers interested in law and business. Many of these research questions have been reflected in the issues we have considered in this chapter. Each of these issues—the making, designing, enforcing, and complying with environmental law, as well as its overall impact on the environment and the economy—remains open for, and in need of, additional research. In part, this need exists because of the relative newness of environmental law and its study. On some questions, only a handful of studies exist, and their results are sometimes mixed, if not even conflicting. More fundamentally, what makes environmental law challenging as a field of empirical research is the sheer complexity of the phenomena under study. Not only does the environment raise difficult questions of natural and public health science, but we have also seen that the law itself is complex—not only in its technical density but also in its varied sources (international, national, state, local, and nongovernmental), its varied designs (means standards, performance standards, market-based regulation, information disclosure, and management-based regulation), and its varied methods of implementation and enforcement (adversarial, cooperative, and hybrid). Environmental law and its enforcement also function in a complex—and often high-stakes—political and economic environment. Law in this area seeks to shape the behavior of heterogeneous entities that are the target of law's power—namely, businesses ranging from sole proprietorships to multinational corporations, not to mention individuals, nonprofit organizations, and even other governmental entities. Consequently, to study environmental law requires understanding more than just environmental science and principles of public law. Ultimately it calls for an ability to analyze the dynamic and complex phenomena of human and organizational behavior, and then to discern the impact of that behavior on another highly complex system, the environment.

To date, the study of environmental law has proceeded, quite sensibly, by trying to isolate and understand separate pieces of this larger, complex puzzle. Scholars have given considerable attention to the analysis of individual regulatory designs, generating important knowledge about the advantages and disadvantages of each particular approach. But the research community has done much less by way of making systematic empirical comparisons across different regulatory designs. We do not know, for example, whether the TRI's information disclosure approach has contributed more (or less) to the decline in toxic air pollution in the United States than the Clean Air Act's hazardous air pollutant performance standards. We also know less than we should about the interaction among different ways of making, designing, and enforcing environmental law. What political economy factors favor conventional means or performance standards over market-based regulation (Keohane, Revesz, & Stavins 1998 )? Do different regulatory designs tend to lead to (or benefit distinctively from) different approaches to enforcement? In the end, how do regulatory designs and enforcement styles interact to affect business behavior? How do different businesses and industrial operations respond to different types of design-and-enforcement combinations? Do environmental quality and economic growth benefit more from having both TRI and hazardous air pollutant performance standards than from each one separately? Do local, state, and national laws responding to global climate change productively link up together, or do they impede more effective global legal responses?

These questions will not be easy to answer. But there are at least three reasons to be optimistic that environmental law researchers will be able to answer some of these questions better over the next twenty years than they have over the past twenty years (Coglianese & Bennear 2005 ). First, environmental law is no longer new, which means that researchers can now exploit longitudinal analysis in ways that were simply unavailable in earlier times. Second, political interest in empirical research on environmental law appears to be growing. The environmental problems many developed countries have already tackled (e.g., water pollution discharged from industrial pipes) have tended to be simpler or less costly to address than the more subtle and complex environmental problems remaining to be tackled (e.g., water pollution from run-off from farms and parking lots). Pressures for increased regulatory analysis—sometimes through political initiatives traveling under the banner of “smart” regulation (Gunningham, Grabosky, & Sinclair 1998 )—have apparently intensified in a number of developed countries in recent years.

Finally, recent and likely future advances in measurement, data availability, and analytic techniques will make it more feasible for researchers to bring new analysis to bear on old research questions as well as to examine new questions altogether. For example, although the US EPA previously kept disparate data on firms’ environmental performance in its different offices, it now posts many data online and has established a Facility Registry System that makes it easier to combine data about the same facility from different sources. More generally, advances in remote sensing and data-mining capabilities can be expected to facilitate important new analysis in the coming decades.

As much as scholars have already learned about business and environmental law, still more research opportunities abound. The study of the intersection of business and environmental law will remain vital in the years to come because answers to the kinds of research questions addressed by scholars in this field—as well as answers to questions still to be studied—will help inform decision-making by legislators and regulatory officials as well as business leaders. Knowing more about how and why different businesses act the way they do when faced with different regulatory designs and different enforcement tactics will clearly be a necessary condition to navigating more effectively in the future toward the goals of environmental protection and economic growth.

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Legislation and Business

Introduction.

The legislation involves the preparation and enacting of laws that govern how certain activities are run. A legislative body conducts this process with legislative authority and powers accorded to it by the constitution. The lawmaking process ensues through evaluation, amendments, and voting for or against the proposed changes. Ideas and suggestions become items of proposition when they are drafted and written down as a bill. The purpose is to change the laws governing given specific areas and provide clarity on what is required. The enacting of such bills becomes Acts or statutes, making them binding. Every enactment process and procedure works under a constitution that controls and guides every action throughout legislation until a bill becomes law (Steele, 2020). Different states and governments have different ways and procedures that lead to enacting a statement to law. Therefore, businesses like any other field need rules and patterns that guide, protect, regulate, and hold businesspeople accountable.

United States Congress

Drafting and bill introduction.

Any congress member with the idea that can become law can draft a bill of the intended amendments. The member can either be from the Senate or the House of Representatives or be a Senate member. The congress member can either bring up the ideas themselves or come to ordinary citizens or groups of people such as advocacy groups. A member who supports a bill is a ‘sponsor.’ Other members in support of the same are ‘co-sponsors.’ Upon drafting, the bill must go through an introduction in the respective House. If the sponsor is a representative, the opening will happen in the House, and if the sponsor is a senator, it will take place in the Senate. When both houses have introduced the bill, and upload goes to the government’s website, whose purpose is to track federal legislation.

A committee receives the bill when the introduction process ends. The Senate and the House both have committees having congress member groups. The interest of these groups is exceptionally diverse topics relating to different aspects affecting people. Now having the bill in their custody, the team examines whether it has a chance of being passed by Congress. The committee can hold hearings to understand better the possible impacts of the bill. It allows for views from experts, supporters, public officials, and opponents to consider its legislation. In cases where the committee does not act on a specific bill, it losses relevance. A subcommittee does further specialization needed for particular topics. The aim is for them to review and to have detailed studies and more hearings.

Bill Mark up

The committee holds a meeting after the completion of hearings and reviews to ‘mark up’ amendments. Through this, they can have modifications and changes before they give recommendations to the ‘floor.’ If a decision is arrived at through voting that they will not report on legislation to the Congress, the bill is discarded. But if the vote is in its favor, a report is given to the House. It will create room for additional debate; full chamber members then vote for approval or disapproval of the amended bill. The voting determines its defeat or whether the committee will pass it.

Referred to another Chamber

Upon passage, there is a referral to another chamber where they follow the same procedure and legislative routines. The Chamber can either approve without any changes, reject it, make changes to it or ignore it. Congress may form a conference committee to develop solutions that reconcile differences in the bill versions of the Senate and the House. The bill dies if the Conference Committee will not reach an agreement. There is an agreement, a report having recommendations is prepared for the bill, and both houses should approve the Report.

President Approval

When the Senate and House approved a bill uniformly, the president receives a copy. The president can support it by signing, therefore, enacting it. If he does not take any action for ten-day, and the Congress was in session, it becomes law. But if Congress was not in session, there is a ‘pocket veto.’ If he opposes it, Congress may veto it, but if the House and Senate, by a majority of two-thirds, pass the bill, they overrule it.

Virginia General Assembly

When a bill originates from the House of Delegates, a delegate will introduce the bill. He presents it by explaining the idea and suggestion in mind to an attorney of staff. The attorney goes through the existing laws in line with the constitutional stand of the same and the possible implications of the proposed legislation through the presentation. If the idea is not controversial with the guiding constitution, the division of legislative services drafts it. The delegate receives the draft copies of the bill. When the representative receives the manuscripts, he has to sign his or her name and introduce it by having both the original and the duplicates on the clerk’s desk. The process of printing happens, and the Speaker refers the copies to the standing committee. The role of the committee members is to have a discussion and vote for or against it (McLaughlin et al., 2016). They report on their conversation and conclusion to the House of Delegates. At this stage, the committee is not allowed to make any amendments to the draft.

After the committee gives the Report, the First Reading takes place. It prints the bill’s title and adds it to the calendar, or the House of Delegates clerk reads it. On the second reading, the bill title is on the House Calendar. Consideration given to the Bill is dependent on the order of its appearance. The clerk also reads the title at this stage, therefore, opening the floor for amendment. The delegate answers to questions asked. The representatives, through a voice vote, engross it to the next reading (McLaughlin et al., 2016). In cases where it was passed without any amendments and is adopted later, the committee prints its engrossed form to allow for passage. On the third reading, it also appears on the calendar, and the clerk reads the title, passed through recorded votes.

The delegate or the clerk transfers the bill to the Senate, indicating that it has the bill House passed it, therefore requesting the Senate’s concurrence. While in the Senate, the process is the same as that of the House of Delegates. It goes through the first, second, and third reading before a constitutional majority passes it (McLaughlin et al., 2016). In cases where differences arise, a committee conference is put in place to resolve the differences. After this, the committee prints an enrolled copy, and each presiding house officers examine and sign the bill. For approval, the team sends a copy to the governor. The governor can sign the account making it law, make amendments to the bill, and send it to the General assembly to approve it or veto the bill (McLaughlin et al., 2016). The Senate and House of Delegates may choose to override the governor’s veto. Before its approval, the House of Delegates should be it to the House of Approval to go through all the necessary readings when the bill is from the Senate.

Pending Bills Affecting Business

Small business mergers, acquisitions, sales, and brokerage simplification act of 2021.

This bill has been introduced and is still being taken through the legislative process. It is subject to the consideration of the committee before being referred to the House and Senate. The bill targets to amend the existing Act of Security Exchange. The aim is to have brokers connected to the transfer of smaller private companies from registration. One is disqualified from this exemption if their activities contradict the purpose of the amendment. For example, if the person engages in transferring ownership for an eligible private company, it directly or indirectly financing for a private company.

If the bill is enacted, more brokers will get into business because there is the process of registration is made simpler. With the increase of brokers, many small companies are likely to merge or be acquired by another. Merging allows for the growth of companies and businesses because of the synergies through coming together. It increases the market coverage of a business; it can get a solid finance base making it attractive to lenders. There will be an increase in innovation and creativity because of different skills being brought together from diverse businesses (Boccia et al., 2020). Therefore, if enacted becomes law, the bill will speed up the growth of companies and their ability to expand both financially and geographically.

On the contrary, due to exemptions when registering brokers, fraud may increase, and cases of people defaulting from specific agreements. Without registration certifications, it is difficult to hold someone accountable for their work and single out fraudsters from genuine brokers. Simplifying the whole process of becoming a broker also opens up businesses to take over risks. People may take advantage of the loopholes that come with this freedom and acquire smaller firms that are vulnerable financially. This causes some businesses to fall out and cease to exist due to other companies taking over some of their business. This has adverse effects on an economy because it loses the value addition the extinct businesses had on it. Also, the overall commercial becomes unstable because there is insecurity in the continuity of doing business.

New Business Preservation Act

This bill aims to have innovative startups where the Department of Treasury, through its secretary, allocates finance to specific states to aid promising startups have access to capital. The capital helps them commercialize various innovative ideas, create employment, and to speed up economic growth in the respective states (Boccia et al., 2020). In cases where there are exits and money is returned, the state will reinvest the money in programs approved by the state. Some of the roles of the secretary as per the bill are, to come up with standards that qualify a state program, avail technical assistance that goes towards designing and implementation of programs, ensure that the program’s integrity is maintained, and review the compliance of the approved states.

Therefore, the Act will have so many new businesses started and running by providing the necessary capital. More new creativity and ideas will be commercialized, which will create a business technologically advanced business environment. Firms already in the market will embrace more contemporary techniques and change not to be competitively disadvantaged. The government is involved in business, and it is easier to have a stable economy because it intervenes when the need arises. It can also understand the economy’s needs and develop sustainable solutions and policies that boost those needs (Boccia et al., 2020). An entrepreneurship culture is created among the states’ citizens because their determination to do business is supported. This, in turn, increases the number of business owners, more people get training on how to be influential entrepreneurs, and investments grow because of the enabling environment. Foreign dominance is reduced because the funding serves the purpose of encouraging local involvement.

The bill, however, affects the business negatively through the disparity it will cause in the economy of states that will be involved and the ones left out. Whereas there will be growth and advancement in participating states, the others will still lag economically. People are likely to move out of the nonparticipating states and move to those financially productive. Potential investors may also be scared off because those sponsored by the state are at a higher advantage financially. Therefore because of the unleveled ground, it may portray, businesses that would have played an influential role in the economy shy away. And finally, because the money is from the state, people may not take full responsibility and accountability for its utilization. This may lead to the misuse of the resources reducing business productivity and ultimately its failure.

The above pending bills show that legislative officials in partnership with citizens can always amend specific laws to solve prevailing business problems in the country (Boccia et al., 2020). The provision is limited to work per the constitution’s requirements, giving powers to the legislative officials for amendment. Upon enactment, the commendation in the law, depending on a specific area of business they address, has the possibility of causing both positive and negative implications (Steele, 2020). Therefore, the legislative team should ensure that they critically consider and review the proposed bill before making amendments to avoid it causing adverse negative impacts. This is because, upon its approval, it becomes the law, and making changes to it again takes time and resources. Also, experts should always be consulted during bill reviews to ensure there is clarity in the understanding of the bill. The possibility of mistakes when experts are involved is minimized because they have a clear and informed view concerning the implications of a bill.

Legislation, therefore, is a tool that influences the way businesses to transact their activities. Predictable regulations make one understand how to deal with any given situation without being taken advantage of by the other party. Consistency in the economy is also assured because everyone does their transactions following specific laws in potentially unstable environments. Businesses are also put under watch and made accountable to the general public in their dealings and transactions. Legislative bodies and officials should aim to have laws for the general development of the economy and the people. All parties involved should be made aware of the implications of going against the law. It will help in achieving the goal of legislation regulating, guiding, and holding accountable.

Boccia, R., & Michel, A. (2020). How congress can enable the great American economic recovery. Heritage Foundation Backgrounder , 3491 .

McLaughlin, V. L., West, J. E., & Anderson, J. A. (2016). Engaging effectively in the policy-making process. Teacher Education and Special Education , 39 (2), 134-149. Web.

Steele, C. (2020). An analysis of US federal environmental legislation in the nineteenth, twentieth and beginning twenty-first centuries, with emphasis on presidential party and political majorities in congress. The Journal of Legislative Studies , 26 (2), 295-313.

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Legislation and Business Environment Essay.

  • By Research Team
  • on March 19, 2020
  • in Sample Papers
  • Legislation and Business Envir...

Legislation and Business Environment

Instructions : How does the parliament regulate the conduct of society, particularly with reference to business transactions and interactions?

Introduction

This paper intends to review the level to which the parliament influences societal practices, especially when it comes to the business environment.

The aim of this paper is to establish the various laws established by the parliament and how such laws have played a role in regulating the business society.

Body – The Role of Parliament in Regulating Society

This section will legislations passed by the parliament and their role in regulating business interactions across Australia. These laws will range from consumer protection laws, laws that govern business structuring, environmental protection laws, anti-discrimination laws, anti-terrorism laws, privacy laws, to laws against criminal activities in the business environment such as anti-fraud laws.

The impact of this laws on the business relationships between businesses and individuals and businesses and other business will be elaborately discussed in this section.

This section will sum up the areas discussed throughout the paper and provide recommendations on how the parliament can further promote positive affect across the business society.

The parliament is a body responsible for making laws within the country. Legislation process is important since the outcome of these acts formed in the parliament have the effect on the society and business environment around the country. A bill is a proposal for a change of law. If this proposal is presented to the parliament and is approved, it becomes an act. This paper is going to discuss parliamentary acts and how they affect the conduct of the society in areas of business transactions and interactions adversely. In the case of Australia, examples of these acts include Competition and Consumer Protection acts, Environmental Acts, Corporations Acts, Anti-terrorism Act, Work relations act, privacy laws and several Discrimination Acts. These acts capture different sectors in the society and directly or indirectly affect the business transactions and interactions. Parliamentary acts are relevant in any country since they regulate several activities in the country regarding business as it will be explained later on.

The Role of Parliament in Regulating Society

To begin with, the parliament protects the consumers from the unfair practices of business organizations. It also regulates how businesses interact to promote better trading between firms. In addition, parliament protects other business from unfair trading and prohibits the misuse of monopoly power. An example of a legislation passed by the parliament is the Competition and Consumers Protection Act of 2010. This act states that through fair trading practices, fair competition and provision of consumer protection, the Australian welfare is enhanced. The law regulates the type of services delivered to the customers, explains the unfair market practices, and monitors the prices of the products (Australian Competition and Consumer Commision, 2016). It ensures that the goods produced by the businesses are of good standards so that the consumers can be satisfied. The act affects the conduct of companies since it creates a linkage to the user. Therefore, businesses in the country should have up to standard goods and should not infringe consumer rights. In case of increased complaints, businesses may be subject to legal liabilities among other devastating consequences such as reputational damage (Australian Competition and Consumer Commision, 2016). Enterprises have to liaise with these act so as to be able to deliver the best to the consumers. In cases of non-satisfactory services or products to the consumers, the acts explain the areas of returns, refunds to customers, warranties, advertising, and marketing.

Secondly, the Parliament controls how business entities in Australia should be structured and how they should be formed. An example of an act that regulates the corporations is the Corporations Act of 2001 (Vickery & Flood, 2011). The act establishes regulations and laws that deal with any business entities in Australia at any level. It explains the relationship in partnership entities and investment schemes. It describes the formation procedures and how the companies operate, the duties of officers and issues with takeovers. Corporations in the Australia have to follow these guidelines provided by the Corporations Act of 2001 to be accredited as a business entity. Small businesses in Australia are expected to be able to adhere to the corporation law to be registered by the Australian government.  The parliament also regulates the environment in relation to the businesses operations through environmental acts. They also protect the society from environmental hazards caused by firms in the country. An example of the environmental law is the Environment Protection and Biodiversity Conservation Act 1999, which states that the environment should be protected and managed efficiently. In Queensland’s case, the Environment Protection Act formulated in 1994 protects against environmental harm, with members of the public required to report any activities that may be deemed to be detrimental to the environment (Queenland Government, 2016). The parliament provides ground for equality and fair treatment of workers in the business climate. The house comes up with acts that promote equal treatment of employees in the workplaces. Such laws have played a major role in minimizing cases of discrimination on the basis of ethnicity, race, sexual orientation, nation of origin, and gender among others, in the workplace.  Some of the laws that have been established by the parliament to this effect include the Workplace Relations Amendment (Work Choices) Act 2005, the Fair Work Act 2009, and the Age Discrimination Act 2004 (Vickery & Flood, 2011). 

Parliament also protects the society from acts of terrorism through the formulation of the Anti-Terrorism laws such as the Anti-Terrorism Act of 2005 (Mullins, 2011). This law protects Australia from terrorism acts and prevents terrorists from getting into the country. It has also facilitated the process through which tools that identify, prosecute, convict and punish terrorists are developed. The law also allows Australia to effectively work with the international community in fighting terrorism. It is important to note that terrorism has devastating effects for businesses including loss of property, loss increased cost of production, and increased investor risk, among other factors. As a result of the effectiveness of these laws, Australia has experienced low cases of terrorism as compared to other countries (Mullins, 2011).The Parliament also puts into consideration how the private information of individuals and businesses is handled. As such, the parliament has come up with the laws to protect privacy of information, including the Privacy Act of 1988 (Vickery & Flood, 2011). The Act defines personal information as information or an opinion that is either true or false, recorded or not, about a known individual or an individual who is reasonably identifiable. The common information in this case may include names, addresses, mobile phone numbers, date of birth, bank details, medical records, and so on. In terms businesses the Privacy Act regulates the consumer credit reporting in the country. The health records are regarded as the most important in the Australia, and the act provides protections around its handling. For example, all organizations that offer medical services should provide the client with a consent before they collect any medical information from the customer (Australian Government, 2016).

The parliament also ensures credibility in the business environment by establishing laws against criminal activities including the corruption, fraud, theft, and deceit of consumers (Gottschalk, 2010). These laws try to promote honesty within the business environment. The Australian government does not allow practices of corruption as corruption is understood to undermine the growth of small businesses and to facilitate the poor development of the economy in the country as well. Therefore, some rules and regulations outline the punishment of cases of corruption and fraud. The parliament protects businesses from these immoral societal activities by punishing the practices by either incarceration of fines. The legislature came up with The Punishment of Offences Act in 2001, which explains the punishment of crimes against the acts of Parliament that occur in the business environment. The act also defines the procedures of arrest and the punishment of the respective crimes (Gottschalk, 2010). The parliament has also come up with laws that promote unity and peace in the society, hence, the better environment for business activities. Case in point, the Justices of the Peace Act of 2005, was formed to create clear roles and duties of the Justices in South Australia. It explains the importance of recognizing the court as a place to sought out justice and peace (Vickery & Flood, 2011). Members of parliament, as leaders, play a major role as the ambassadors of peace and unity in the country. In any business interactions, if there is a disagreement or a case of unfair trading, the law provides that the conflict is taken to court to allow for arrival at an amicable solution for both parties. Every business is also advised to have a lawyer or an attorney to battle for their cases in the court.

It is evident that the parliament, being the legislation organ in the land, regulates the societal business environment through the formation of these laws. The legislature protects consumers and the business entities. It regulates environmental measures for companies to carry on with their activities effectively. In addition, the parliament promotes the equality and fairness towards workers in workplaces and provides for the guidelines to the formation of new business entities. The parliament also fights crimes and terrorism thus creating a better environment for businesses to operate. Lastly, the legislature plays a massive role in promoting unity and guarding personal and organizational information. Therefore, the house is critical in the running of business activities around the country and helps the society as a whole in regulating key issues in the society. 

Australian Competition and Consumer Commision. (2016, march 10). Legislation . Retrieved from Australian Competition and Consumer Commision: https://www.accc.gov.au/about-us/australian-competition-consumer-commission/legislation

Australian Government. (2016, March 12). Privacy Law . Retrieved from Office of the Australian Information Commisioner: https://www.oaic.gov.au/privacy-law/privacy-act/

Gottschalk, P. (2010). Categories of financial crime. Journal of Financial Crime, 17 (4), 441-458.

Mullins, S. (2011). Islamist Terrorism and Australia: An Empirical Examination of the “Home-Grown” Threat. Terrorism and Political Violence, 23 (2), 254-285.

Queenland Government. (2016, March 11). Environmental and Pollution Laws . Retrieved from Queensland Government: https://www.qld.gov.au/law/laws-regulated-industries-and-accountability/queensland-laws-and-regulations/queensland-laws/about-queensland-laws/environment-and-pollution-laws/

Vickery, R., & Flood, M. (2011). Australian Business Law: Compliance and Practice. Queensland: Pearson Australia.

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The Business Environment, Essay Example

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The business environment is ever changing; thus, presenting a number of challenges to businesspersons around. Therefore, this business environment will demand managers and business leaders to come to terms with the changes by adopting the needed changes. The managers should garner the needed experience and management skills to meet these growing challenges. I believe that the Master of Business Administration (MBA) from Henley School of Business will enable me to play a leading role towards changing the future businesses not only in South Africa, but globally.

The MBA program has provided me with the necessary tools that will allow me to understand, as well as implement business and management principles. The business and management principles are important in the modern business environment because I will use them to better my managerial skills and that of others. Since I have working for more than 8 years in challenging positions with mining companies and non-governmental organizations, I will be able to increase my knowledge towards understanding the problems that businesses and markets face nowadays. This will offer me an opportunity to address these challenges, thus making the future of the businesses bright. I believe also that leadership is a core principle while pursuing MBA program. Therefore, with my program I will encourage businesses to adopt a culture of effective leadership among their managers and other leaders. If the businesses understand that leadership is about influencing others, they will succeed in their everyday operations.

Decision-making and strategic planning are important elements towards the success of the business. The MBA program equipped me with knowledge regarding the role of business investing in strategic planning and decision-making approaches to make the needed changes in an organization. The strategic planning will ensure that the business develop effective mission and objectives and develop and implement approaches to realize the mission and work towards objectives. This can be carried out through adopting market research, feasibility studies, or cost-benefit analysis. MBA provides all these tools and by encouraging companies to adopt these strategies will ensure that the businesses will survive in future.

In the present business environment and in future, coordinating the works of others in a team is important towards attaining the goals of a business. Thus, the MBA program will equip me with team skills and knowledge that I will use to influence others. I believe that teamwork is an important component of any given business because it boosts motivation, hence increasing productivity among the team members. Teamwork permits businesses to be more flexible and responsive. In addition, teams also motivate workers to be more creative, to develop a broader view of objectives, and to contribute across the whole business. Thus, with my MBA, I will emphasize and encourage businesses to adopt teams. . With my MBA, I believe that the companies will be effective in meeting their goals if they embrace teams that are multi-cultural team. This is because cross-border mobility has become widespread, which forces managers to form multi-cultural teams. MBA program has thought me to encourage businesses to develop effective communication strategies that will allow them to communicate effectively with different teams and departments. The communication process should be two-way to make sure that every activity in the business and avoids duplication of responsibilities.

Globalization is another principle that I believe with my MBA program, I will be able to encourage businesses to adopt. It has a reality that business should go past their boundaries to global arena through expansion strategies to reap the full benefits of markets. The business will realize the benefits of going global since they will increase their market share and diversify their businesses, thus reducing potential risks. When businesses move to global environments, they will gather more experiences, because they will meet diverse persons form different cultures. In addition, through the MBA program I will be in a position to encourage the business world to create and adopt multi-cultural environment. Multi-cultural environment will allow the business to have diverse workforce that will allow the company to increase productivity through diversity.

MBA stresses the importance of technology and information systems in the present business environment and in future. The present business environment demands businesses to adopt latest technologies in business in order to survive. It is no doubt that technology and information systems play a vital role to the success and future of the business .MBA programs demands that business should be at par with technologies to remain relevant in the market. Technology has emerged to key drivers in the world that business should become part of this changing trend. I will ensure that I stress the importance of technology wherever I will work and in business forums and workshops. The managers should be equipped with better ways of managing employees through technology and information systems in a business to realize the full potential of the business. Technology should integrate with the element of creativity and innovation. I believe that encouraging businesses to adopt innovation and creative strategies are important towards fashioning an enabling environment that enhances problem-solving skills and developing outstanding strategies to pursue business strategies.

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Essay: Business environment

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POLITICAL ENVIRONMENT

Political factors, in the context of the external environment in which a business functions, are a type of external constraint acting upon a business. They’re related to actions of governments and political conditions in the location where the business conducts business or seeks to conduct business. Government actions and political realities influence the success of the business.

Political environment can also affect government policies at local to federal level. Companies should be ready to deal with the local and international outcomes of politics. Changes in the government policy make up the political factors. The change can be economic, legal or social. It could also be a mix of these factors.

Change in the political factors can affect business strategy. The stability of a political system can very well decide about the appeal of a particular local market because Government is a major consumer of goods and services. Government is liable for protecting the public interest and thus it views business organizations as a vehicle for social reform. Government pass legislation, which impacts the relationship between the firm and its customers, suppliers and other companies.

Below, is a list of political factors affecting business:

§ Bureaucracy

§ Corruption level

§ Freedom of the press

§ Trade control

§ Education Law

§ Anti-trust law

§ Employment law

§ Discrimination law

§ Data protection law

§ Environmental Law

§ Health and safety law

§ Competition regulation

§ Regulation and deregulation

§ Tax policy (tax rates and incentives)

§ Government stability and related changes

§ Government involvement in trade unions and agreements

§ Import restrictions on quality and quantity of product

§ Intellectual property law (Copyright, patents)

§ Consumer protection and e-commerce

§ Laws that regulate environment pollution

ECONOMIC ENVIRONMENT

A business has many decisions to make – what to produce, how to produce, for whom to produce. However, these decisions will be affected greatly by the economy in which the firm operates. Even if the economy is quite stable, the business always has to monitor its own operations, those of the opposition and any changes to customers’ habits or even lifestyles. Where there is instability in the economy the decisions of the business will be even harder and difficult and even more important.

Economic environment refers to the aggregate of the nature of economic system of the country, the structural anatomy of the economy to economic policies of the government the organisation of the capital market, the nature of factor endowment, business cycles, the socio-economic infrastructure etc.

When the economy becomes unstable, that’s when problems will occur, when services and goods start to become in short supply or the price of the goods and services go so high that people are not able to afford them anymore. A rise in unemployment could mean that the production and supply of goods decrease and the amount of money to purchase the available goods decreases as well – due to wages being reduced. As there are less people in employment, the taxes being paid to the government are less (they need the taxes to fund services such as housing, health e.g. and education, etc.).

Economic factors that affect the business environments are as under:

· Government economic policies

· Rate of interest set by the central bank of any country

· Per capita Income which has a huge impact on business environment by changing their consumption behaviour

· Privatization policy by the government

· Instability in the economy due to bad political conditions in the county affects the business environment

· Customs duty structure

· Airline air freight charges

· Foreign investment in the country

SOCIAL ENVIRONMENT

Social environment of business means all factors around the business which affect it socially. It refers to the nature of social organisation and development of social institutions like caste, religion, customs, and socio-economic factors like class structure, social mobility, women employment etc.

Society is ever changing. The tastes and continuously changing trends are a part of it. It is highly affected by social media and social networking sites.

A business has some responsibilities towards society as it uses resources from society, so it has to return something to the society. Corporate social responsibility (CSR) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms.

Below is a list of social factors which impact customer needs and size of markets:

§ Lifestyles

§ Buying habits

§ Education level

§ Emphasis on safety

§ Religion and beliefs

§ Health consciousness

§ Sex distribution

§ Average disposable income level

§ Social classes

§ Family size and structure

§ Minorities

§ Attitudes toward saving and investing

§ Attitudes toward green or ecological products

§ Attitudes toward for renewable energy

§ Population growth rate

§ Immigration and emigration rates

§ Age distribution and life expectancy rates

§ Attitudes toward imported products and services

§ Attitudes toward work, career, leisure and retirement

§ Attitudes toward customer service and product quality

TECHNOLOGICAL ENVIRONMENT

Technology has revolutionized the world. It is changing rapidly with newer innovations. It has influenced operations of the business over the world. Its influence is felt in practically all aspects on the day-to-day operations of businesses, both large and small.

Technology has also changed the face and the pace of how business functions. Business processes have been modified and organizations are now working much more efficiently than ever. At the same time, technology has opened a new way of communication, allowing businesses to communicate and collaborate beyond borders.

The growing use of IT and its tools, smartphones and various smart devices have taken the business to a next level. Today, it’s seen that those organizations are higher ranked are usually more advanced in technology. Technology has, in fact, made organizations to go digital.

The rapid development of technology requires quick reaction by businesses in order to survive in an emerging competitive environment and keep up with new trends and innovative services which other competitors might be offering.

These technological factors can include both products and processes and can present opportunities and threats but it is vital for competitive advantage and is a successful driver in globalisation. Products can be marketed in new ways and processes present immense Value to the business.

LEGAL ENVIRONMENT

The legal environment refers to the principles, rules and regulations established by the government and applicable to people. These regulations come through various legislations. The government has passed and enacted various Acts. Now due to globalization of economy, it became necessary to make changes in these Acts.

The legal environment plays a very crucial role in determining the success of a business. The government imposes taxes among other regulatory measures to promote economic growth and to cushion consumers from exploitation. Therefore, before establishing or when running a business, it is imperative to understand the role of regional tax measures and regulatory measures to determine how they affect business.

An understanding of the legal environment of business is relevant—indeed, essential—to functioning well within disciplines like accounting, finance, management and marketing. Additionally, a solid understanding of the legal environment can help avoid liability or at least minimize risk. In business, it is not enough to comport one and one’s business ethically. Business must also ensure that it understands the legal environment in which it is working. Therefore, it is important for the organization, for its employer, and for all the other people who may be relying on business expertise—such as employees and their family—to understand the legal environment. Such an understanding will help to avoid or lessen the likelihood of liability exposure, enabling organization to manage business affairs successfully, unhampered by unmanaged legal liability risks.

Most of the countries have consumer protection laws aimed at making sure that business act fairly towards their consumers. A few examples are

· Weight and Measures Act, 1976: This Act was enacted to establish standards of weights and measures, to regulate inter-State trade or commerce in weights, measures and other goods which are sold or distributed by weight, measure or number, to provide for matters connected therewith or incidental thereto. Goods sold should not be underweight. Standard weighting equipments should be used to measure goods.

· Trade Description Act, 1968: It means deliberately giving misleading impression about the product is illegal. The Act makes it a criminal offence to apply a false trade description to goods. The Act covers descriptions given both verbally and in writing. It covers any factual statement about the physical qualities of the product, e.g. size, capacity, performance, place of manufacture and previous history.

· Consumer Credit Act, 1974: According to this Act, consumers should be given a copy of the credit agreement and should be aware of the interest rates, length of loan while taking a loan. The Act also regulates what may be taken as security, limits the ways in which credit organisations can advertise and gives the county courts the ability to intercede in the case of unfair or unjust credit agreements. It also gives additional rights to the debtor, including certain limited rights to cancel concluded agreements.

· Sale of Goods Act, 1979: According to the Act, it is illegal to sell products with serious flaws or problems and goods sold should conform to the description provided. The Act applied to contracts where property in ‘goods’ were transferred or agreed to be transferred for a monetary consideration, in other words: where property (ownership) in personal chattels was sold.

NATURAL ENVIRONMENT

Business is interconnected with nature in two ways. Firstly, business gets its raw materials from the nature, whose quality and availability can affect the business to a large extent. Secondly, natural calamities which are uncontrollable and uncertain, can bring disaster for the business.

The analysis of the mega environment must also cover aspects like extent of endowment of natural resources in the country, ecology, climate, etc. These constitute the natural environment.

In today’s nature disturbances, upcoming of global warming and other hazardous issues to the environment, companies around the world are integrating environmental interest with business and are becoming proactive in finding ways to reduce environmental impact. Additionally, consumers are favouring businesses that contribute to protecting natural resources. These interconnections are explicit domains where business is heavily implicated.

There are no hard and fast rules with regard to location of plant. In practice, a large number of factors have to be considered while choosing a suitable location. Moreover, these factors differ from situation to situation and from time to time.

ENVIRONMENT SCANNING TECHNIQUES

It is essential for a company to understand the environment in which it is working, in order to stand and survive in the market. The understanding of environment can be meant as environmental scanning. This environmental scanning is used by the companies to judge its position among its competitors. It helps to identify positive points and negative points, that is, strengths and weaknesses of the company. It provides knowledge about the upcoming opportunities and threats to the company. Thus, environmental scanning gives a proper base to the company for looking its current position and improving for the better. It shows the scope of betterment in future.

There are various techniques of environmental scanning, each having its own usefulness but having some drawbacks at the same time.

SWOT ANALYSIS

SWOT analysis is an acronym of Strengths, Weaknesses, Opportunities, Threats. It is the simplest technique of all because it does not take much time and doing it forces the management to think about the company in a whole new way. SWOT analysis is calculated by a SWOT matrix.

SWOT analysis, as per the name suggests, helps company to identify its strengths and weaknesses, understand and grab the opportunities on the way and taking precautions against threats that may harm it.

Strengths and weaknesses are the internal factors of the company which can be changed from time to time but not without some work. Opportunities and threats are the external factors which cannot be changed nor there is any control over them.

Areas typically considered in the internal factors include financial resources, human resources, physical resources, access to natural resources, and current processes.

Some example of strengths, as an internal factor, that a company can consider are patents, strong brand names, good reputation among customers, cost advantages from proprietary know-how, exclusive access to high grade natural resources, favourable access to distribution networks. Some example of weaknesses, as an internal factor, that a company can consider are lack of patent, weak brand names, poor reputation among customers, high cost structure, lack of access to the best natural resources, lack of access to key distribution channels.

Areas typically considered in the external factors include market trends, economic trends, funding, demographics, relationships with suppliers and partners, and, political, environmental and economic regulations.

Some example of opportunities, as an external factor, includes an unfulfilled customer needs, arrival of new technology, loosening of regulations, removal of international trade barriers. Some example of threats, as an external factor, that a company can face include shifts in consumer tastes away from the firm’s products, emergence o f substitute products, new regulations, international trade barriers.

It is important to study SWOT analysis to determine the status of the company and providing for better future.

ENVIRONMENT THREAT AND OPPORTUNITY PROFILE(ETOP)

ETOP is the acronym of Environment Threat and Opportunity Profile. It is an environmental scanning technique in which environment is divided into different sectors and then impact of each sector is analysed separately. The impact is measured on three measures of scale: positive, negative, neutral, marked as +,-,0 respectively.

ETOP considers the environmental information and determines relative impact of threats and opportunities, for the systematic evaluation of environmental canning. It helps organization to identify opportunities and threats and to consolidate and strengthen organization’s position. It provides the strategists of which sectors have a favourable impact on the organization.

Some of the environmental factors that can be covered while undergoing ETOP analysis includes political factors, legal factors, economic factors, social factors and alike.

The strategic managers must keep focus on following dimensions:

· Issue selection

Focus on issues which have been selected, should not be missed as there is a probability of landing at incorrect practices. Some of the important issues may be related to market share, competitive pricing, customer preferences, technological change, economic policies, competitive trends, etc.

· Accuracy of data

Data should be collected from good sources otherwise the entire process of ETOP may fail. The relevance, importance, manageability, variability, and low cost of data are some of the important factors to be kept in focus.

· Flexibility in operations

Due to uncertainty in business situations, a company will be benefited by devising proactive and flexible strategies in their plans, structures, strategy, etc.

· Impact study

It should be conducted focusing on the various opportunities and threats and the critical issues selected. Efforts must be made to make the assessment more objective.

ORGANIZATIONAL CAPABILITY PROFILE(OCP)

OCP is the acronym of Organizational Capability Profile. It is summarized statement which provides overview of strengths and weaknesses in key result areas likely to affect future operation of the organization. Information in this profile may be presented in qualitative terms or quantitative terms.

The organizational capability profile is drawn in the form of a chart. The strategists are required to systematically assess the various functional areas and subjectively assign values to the different functional capability factors and sub factors along a scale ranging from values of -5 to +5.

After the preparation of OCP, the organisation is in a position to assess its relative strength and weaknesses vis-a-vis its competitors. If there is any gap in area, suitable action may be taken to overcome that. OCP shows the company’s capacity. OCP tells about company’s potential and capability. OCP tells what company can do.

STRATEGIC ADVANTAGE PROFILE(SAP)

SAP is the acronym of Strategic Advantage Profile. It is a summary statement, which provides overview of the advantages and disadvantages in key areas likely to affect future operations of the firm. It is a tool for making a systematic evaluation of the strategic advantage factors, which are significant for the company in its environment. The preparation of such a profile presupposes detailed analysis and diagnosis of the factors in each functional area.

SAP describes the organisation’s competitive position in the market place. It indicates what the organisation has done or is doing in comparison to its competitors to generate competitive advantage for itself. It is external-oriented.

INTERACTION MATRIX – PORTER’S FIVE FORCES OF MODEL

Source: www.tutorialspoint.com

The mix, character and power of the competitive forces operating in a company’s industry varies from one industry to another. The most powerful tool used for systematically diagnosing the basic competitive pressures in a market and assessing strength, weakness, opportunities and threats, is the five-forces model of competition.

Five forces model of competition was developed by Harvard Business School’s Michael E. Porter in 1979. It emphasizes on the five important factors that help determine whether or not a business can be profitable on the basis of the present strategy it is following. The strategy the business follows is what ultimately drives competition and profitability and not on what product or services it is providing.

RIVALRY AMONG EXISTING COMPETITORS

In today’s cut-throat market, competitors are prone to use whatever weapons they have in their business to attain better market positions and earn good profits as well as brand loyalty. The challenge is to adopt a competitive strategy that produces competitive edge over rivals. This strategy consists of offensive and defensive moves, action and reaction patterns, adjust and readjust process. Thus, the current leaders of the market cannot be very sure of their continued leadership in future.

Rivalry gets stronger when competitors are active in making strategies against strategies, moves after moves. Competition increases as the products of rival sellers become more standardized and diminishes as the products of industry rivals become more strongly differentiated. Competitors to stand in market, thus, should have diverse strategies and objectives.

THREAT OF NEW ENTRANTS

Val Renault, Section 14. SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats, Retrieved from http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/main

Tim Berry, What is a SWOT Analysis?, Retrieved from http://articles.bplans.com/how-to-perform-swot-analysis/

SWOT Analysis, Retrieved from http://shodhganga.inflibnet.ac.in/bitstream/10603/59535/7/07_chapter%201.pdf

Smriti Chand, Environmental Threat and Opportunity Profile, Retrieved from http://www.yourarticlelibrary.com/organization/environmental-threat-and-opportunity-profile-%D0%B5%D1%82%D0%BE%D1%80/23557/

ETOP Analysis, Retrieved from http://www.bbamantra.com/etop-environmental-threat-and-opportunity-profile/

BMS Team, Organizational Capability Profile, Retrieved from http://www.bms.co.in/organizational-capability-profile-ocp/

Strategic Management – Environmental Scanning Techniques – Notes – Business Management, Study notes for Business Administration. Banaras Hindu University,Business Administration, Retrieved from http://www.docsity.com/en/strategic-management-environmental-scanning-techniques-notes-business-management/52577/

Jim Makos, Political factors affecting business, Retrieved from http://pestleanalysis.com/political-factors-affecting-business/

Alex Pirouz, The Impact of Technology in Business, December/January 2012 issue of Business Review Australia magazine

Andrew J. Hoffman and Susse Georg, INTRODUCTION TO BUSINESS AND THE NATURAL ENVIRONMENT A history of research on business and the natural environment: conversations from the field, Retrieved from http://webuser.bus.umich.edu/ajhoff/pub_academic/2013%20Routledge%20Intro-2.pdf

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Environmental Law: Regulations Every Business Should Know

24-03-07 Replacement Blog Post Image

When starting your business, there is a long checklist of tasks that you need to complete before opening your doors. After choosing the proper business entity form, registering your business, obtaining your federal tax identification number and determining your state tax obligations, you’ll need to consider what federal and state licenses and permits your business needs. 

Among these necessary licenses and permits are those that will ensure you are in compliance with federal environmental regulations. From substances regulated under Resource Conservation and Recovery Act (RCRA) to National Pollutant Discharge Elimination System (NPDES) permits, the alphabet soup of environmental law can be overwhelming!

Environmental Regulations for Businesses

The Environmental Protection Agency and state environmental agencies enforce the environmental regulations that apply to businesses. Although it may be obvious that businesses involved in automotive services, metal work, paints and coatings, agricultural services, and chemical production are subject to environmental regulations, other more innocuous ones, such as dry-cleaners and printers, are as well.

It is best to talk with a lawyer to ensure your business complies with any relevant regulations and avoids environmental legal pitfalls. For example, establishing practices to prevent waste generation or improper disposal is the most cost-effective way to achieve environmental compliance, as you will save your business the expenses associated with tracking waste streams, costly disposal methods, and, in the worst case scenario, significant fines.

This blog post will review the categories of regulations that may be applicable to your business, so you can avoid costly problems down the road.

Commonly Required Federal Permits

Before you can engage in certain regulated activities through your business, such as discharging a pollutant, you may be required to obtain a permit . Permits may be required under the following federal environmental laws:

Clean Air Act (CAA):

Some smaller sources of air pollution are required to obtain operating permits under Title V of the Clean Air Act. These sources include businesses that involve incineration units, chemical manufacturing, glass manufacturing, and various types of metal processing, among others. Most permits are issued by state and local permitting authorities , and are legally-enforceable documents that clarify what facilities have to do to control their air emissions. You can find more information about who has to obtain a Title V permit and how the Clean Air Act works on the EPA’s website. A lawyer can help you decipher what type of source your business is, what emissions threshold you need to meet, and how to acquire any necessary permits. 

Clean Water Act (CWA):

If your business emits water pollution or operates near wetlands, you may need to meet specific federal, state, and local permit requirements. 

  • Section 404 - Wetlands The Army Corps of Engineers regulates the discharge of dredged or fill materials into U.S. waters. State environmental agencies may also regulate activities affecting water pollution, shoreline management, and forest management. You should also be mindful of any local zoning ordinances regulating your business’s proximity to a wetland. 
  • Section 402 - National Pollutant Discharge Elimination System If your business discharges wastewater to surface water or a municipal sewer, or if you experience stormwater runoff from your facility during rain events, you may need to apply for an NPDES permit.

You can find more information about the Clean Water Act on EPA’s website, but working with an attorney will help you navigate the multiple levels of ordinances and permit requirements that apply to your business’s activities

Endangered Species Act (ESA):

If the activities of your business affect threatened or endangered species, you may need a permit from the U.S. Fish and Wildlife Service (FWS), the National Oceanic and Atmospheric Administration’s (NOAA) National Marine Fisheries Service (NMFS), or your state’s wildlife agency. You can find more information about complying with the ESA on the FWS website . An environmental attorney can also assist you in understanding what locally listed species could mean for your company. 

Resource Conservation and Recovery Act (RCRA):

RCRA establishes a federal program to manage hazardous waste from cradle to grave, and includes regulations for generation, transportation, treatment, storage, and disposal of hazardous wastes. If your business involves hazardous waste, you will need a RCRA permit from your state or EPA regional office. For more information about RCRA, consult the EPA guide for small businesses on managing your hazardous waste or EPA’s website on RCRA Guidance, Policy and Resources . Again, a legal expert can guide you in understanding how to implement the appropriate architecture of documentation and record keeping to keep your company in compliance with permit requirements.

Compliance Assistance Resources

The EPA website is a great resource if you have general questions about environmental regulations, or need guidance on how to bring your business into compliance.

However, federal environmental law is extremely complex. An attorney will easily break down dense legal jargon into clear tasks for your company and help you ensure your business’s compliance. Useful EPA references to get you started include: 

  • EPA’s Laws & Regulations page includes links for more information about laws, regulations, compliance and enforcement, and policy and guidance. You can also search for regulatory information by topic or by sector.
  •   EPA’s Small Business Programs page provides useful links to support for small businesses, including the Asbestos and Small Business Ombudsman.
  • EPA’s Retail Industry Portal provides resources to help prevent and resolve environmental issues at retail establishments.

Remember that you will need to be in compliance with both state and federal regulations. Consult your state’s environmental agency to verify that you have the appropriate permits and have taken any necessary environmental precautions. State departments of the environment, such as New York’s , will provide state-specific guidance and policy documents to help you understand your business’s legal needs. Each state’s regulations may be slightly different, so take care to check your specific state’s requirements.

To be sure you are satisfying every requirement of any applicable environmental regulations, it is best to work with a lawyer with strong experience in this area. Protect your business and get started with a Priori attorney today. 

If you’d like to move beyond compliance and investigate opportunities to green your workplace , EPA’s website also provides access to many resources for corporate environmental stewardship . A lawyer can help you formalize your actions into a company sustainability policy, as well as explore various national green certification programs.  

Photo Credit:

Nick Stanley via Compfight cc

Cyron via Compfight cc

FlyingSinger via Compfight cc  

priori_team_0000_valerie

Valerie Pinkerton, Customer Community Manager at Priori Legal, works to transform how small businesses find a lawyer and can afford high-quality legal services in NY, CA, and more. Valerie graduated from Columbia University in 2012 with a triple concentration in Environmental Biology, Economics, and Political Science. She spent the past two years as a Research Associate at the Environmental Law Institute where she focused on judicial education and capacity-building programs on environmental law for government officials around the world.

business environment legislation essay

Republican Officials Weigh In Against Corporate Transparency Law

By John Woolley

John Woolley

Republican attorneys general from 22 states urged a US appeals court to not resurrect an anti-money laundering statute they say exceeds Congress’ constitutional authority to regulate interstate commerce.

The AGs filed their amicus brief in support of National Small Business United, an association that convinced an Alabama federal court to invalidate the Corporate Transparency Act. The law would require businesses report their “beneficial ownership” to the Treasury Department, and was designed to curb tax evasion and money laundering done via anonymous shell companies.

“The district court got it right when it recognized that the CTA takes an unprecedented swipe at ...

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DeSantis, amid criticism, signs Florida bill making climate change a lesser state priority

FILE - Florida Gov. Ron DeSantis speaks at the Governor's Day luncheon, Feb. 8, 2024, in Tampa, Fla. Climate change will be a lesser priority in Florida and largely disappear from state statutes under legislation signed Wednesday, May 15 by Gov. DeSantis, which also bans power-generating wind turbines offshore or near the state's lengthy coastlines. (AP Photo/Chris O'Meara, File)

FILE - Florida Gov. Ron DeSantis speaks at the Governor’s Day luncheon, Feb. 8, 2024, in Tampa, Fla. Climate change will be a lesser priority in Florida and largely disappear from state statutes under legislation signed Wednesday, May 15 by Gov. DeSantis, which also bans power-generating wind turbines offshore or near the state’s lengthy coastlines. (AP Photo/Chris O’Meara, File)

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TALLAHASSEE, Fla. (AP) — Climate change will be a lesser priority in Florida and largely disappear from state statutes under legislation signed Wednesday by Florida Gov. Ron DeSantis that also bans power-generating wind turbines offshore or near the state’s lengthy coastline.

Critics said the measure made law by the former Republican presidential hopeful ignores the reality of climate change threats in Florida, including projections of rising seas, extreme heat and flooding and increasingly severe storms.

It takes effect July 1 and would also boost expansion of natural gas, reduce regulation on gas pipelines in the state and increase protections against bans on gas appliances such as stoves, according to a news release from the governor’s office.

DeSantis, who suspended his presidential campaign in January and later endorsed his bitter rival Donald Trump , called the bill a common-sense approach to energy policy.

“We’re restoring sanity in our approach to energy and rejecting the agenda of the radical green zealots,” DeSantis said in a post on the X social media platform.

Florida is already about 74% reliant on natural gas to power electric generation, according to the U.S. Energy Information Administration. Opponents of the bill DeSantis signed say it removes the word “climate’ in nine different places, moves the state’s energy goals away from efficiency and the reduction of greenhouse gases blamed for a warming planet.

FILE - A family uses a canoe after fleeing floodwaters that wreaked havoc in Ombaka Village, Kisumu, Kenya, April 17, 2024. The impact of the calamitous rains that struck East Africa from March to May was intensified by a mix of climate change and rapid growth of urban areas, an international team of climate scientists said in a study. (AP Photo/Brian Ongoro, File)

“This purposeful act of cognitive dissonance is proof that the governor and state Legislature are not acting in the best interests of Floridians, but rather to protect profits for the fossil fuel industry,” said Yoca Arditi-Rocha, executive director of the nonprofit Cleo Institute, which advocates for climate change education and engagement.

The legislation also eliminates requirements that government agencies hold conferences and meetings in hotels certified by the state’s environmental agency as “green lodging” and that government agencies make fuel efficiency the top priority in buying new vehicles. It also ends a requirement that Florida state agencies look at a list of “climate-friendly” products before making purchases.

In 2008, a bill to address climate change and promote renewable energy passed unanimously in both legislative chambers and was signed into law by then-Gov. Charlie Crist, at the time a Republican. Former Gov. Rick Scott, now a Republican U.S. senator, took steps after taking the governor’s office in 2011 to undo some of that measure and this latest bill takes it even further.

The measure signed by DeSantis would also launch a study of small nuclear reactor technology, expand the use of vehicles powered by hydrogen and enhance electric grid security, according to the governor’s office.

This story has been updated to correct the spelling of Yoca Arditi-Rocha’s first name.

business environment legislation essay

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Florida Gov. Ron DeSantis signs a bill that strikes climate change from state law

The Associated Press

business environment legislation essay

Florida Gov. Ron DeSantis speaks at a Feb. 8 luncheon in Tampa, Fla. Climate change will be a lesser priority in Florida and largely disappear from state statutes under legislation signed Wednesday by DeSantis. Chris O'Meara/AP hide caption

Florida Gov. Ron DeSantis speaks at a Feb. 8 luncheon in Tampa, Fla. Climate change will be a lesser priority in Florida and largely disappear from state statutes under legislation signed Wednesday by DeSantis.

TALLAHASSEE, Fla. — Climate change will be a lesser priority in Florida and largely disappear from state statutes under legislation signed Wednesday by Florida Gov. Ron DeSantis that also bans power-generating wind turbines offshore or near the state's lengthy coastline.

Critics said the measure made law by the former Republican presidential hopeful ignores the reality of climate change threats in Florida, including projections of rising seas, extreme heat and flooding and increasingly severe storms.

It takes effect July 1 and would also boost expansion of natural gas, reduce regulation on gas pipelines in the state and increase protections against bans on gas appliances such as stoves, according to a news release from the governor's office.

More than 200 million seniors face extreme heat risks in coming decades, study finds

More than 200 million seniors face extreme heat risks in coming decades, study finds

DeSantis, who suspended his presidential campaign in January and later endorsed his bitter rival Donald Trump, called the bill a common-sense approach to energy policy.

"We're restoring sanity in our approach to energy and rejecting the agenda of the radical green zealots," DeSantis said in a post on the X social media platform.

Florida is already about 74% reliant on natural gas to power electric generation, according to the U.S. Energy Information Administration. Opponents of the bill DeSantis signed say it removes the word "climate' in nine different places, moves the state's energy goals away from efficiency and the reduction of greenhouse gases blamed for a warming planet.

"This purposeful act of cognitive dissonance is proof that the governor and state Legislature are not acting in the best interests of Floridians, but rather to protect profits for the fossil fuel industry," said Yoca Arditi-Rocha, executive director of the nonprofit Cleo Institute, which advocates for climate change education and engagement.

Their batteries hurt the environment, but EVs still beat gas cars. Here's why

Their batteries hurt the environment, but EVs still beat gas cars. Here's why

The legislation also eliminates requirements that government agencies hold conferences and meetings in hotels certified by the state's environmental agency as "green lodging" and that government agencies make fuel efficiency the top priority in buying new vehicles. It also ends a requirement that Florida state agencies look at a list of "climate-friendly" products before making purchases.

In 2008, a bill to address climate change and promote renewable energy passed unanimously in both legislative chambers and was signed into law by then-Gov. Charlie Crist, at the time a Republican. Former Gov. Rick Scott, now a Republican U.S. senator, took steps after taking the governor's office in 2011 to undo some of that measure and this latest bill takes it even further.

The measure signed by DeSantis would also launch a study of small nuclear reactor technology, expand the use of vehicles powered by hydrogen and enhance electric grid security, according to the governor's office.

Ethical Practice in Business Environment Essay

Introduction, the spa issue, works cited.

The business environment is faced with multiple ethical issues that need to be resolved. This paper reviews the ethical issues that arise from a spa in Singapore, Wellness Village spa, closing down without notice. The spar disappears while owing customers’ money in the form of pre purchased packages and credit card bills. This paper applies various ethical theories so as to solve the ethical issues.

By use of the consequentialist, social contract and stakeholder theories, it is proposed that the bank has an obligation to cover some of the costs covered by the customers. Application of the deontological ethics reveals that the bank is under no obligation since it has performed all the duties expected of it. While the directors of the spa are pinpointed as the major culprits, this paper shows that they should not be punished alone since they were working for the interests of shareholders.

Collective punishment is seen as the best manner to obtain justice. From the ethical theories applied in this scenario, it has been seen that the interest of the society at large should ideally take precedence over individual or business interests. The paper concludes by restating that knowledge of ethical theories is essential in solving ethical issues that arise in the business environment.

Ethical behavior has throughout human civilization been supposed to be a major building block for a productive and well functional society. For this reason, ethical behavior has been applauded and taught to be superior to unethical dealings. However, ethics have not been given much relevance in businesses and so long as businesses stay within the law, businesses been given much consideration and businesses have been subjected to little criticism for their ethical behavior so long as they did not break the law.

Ethics can loosely be defined as a system of moral principles by which social conduct is judged as either “right” or “wrong”. As relates to business, ethics are moral principles which prescribe what is legitimate behavior in varied business dealings (Chryssides and Kaler 3). This paper shall analyze the ethical issues that surround the closing of the Wellness Village spa. The paper shall make use of various ethical theories so as to demonstrate the most effective way to deal with the ethical issues.

The ethical issues surrounding the Wellness Village Spa closure is who should pay for the credit card bills charged to cardholders by the bank for services that the cardholders did not receive. In the scenario, the spa closed down without informing the clients some of whom had purchased expensive packages from the spa.

Notably, the Wellness Village spa used misinformation to deceive the customers. This was by claiming that they were overbooked while in reality the company was preparing to close operations abruptly. Another underlying concept in the case are secrecy whereby the company directors failed to divulge vital information about the company being closed in the near future since the information would had affect the company’s profitability.

Ethical theories are the criteria that we use to make judgment as to the fairness or unfairness of actions undertaken regarding problems (Crisp, Potter & Perry, 2005). The theories provide support to decision making and shed some light the thought process behind a conclusion.

The first theory that can be applied on this case is the consequentialist ethics theory holds that actions can be judged as right and/or good only on the basis of the consequences they produce with no consideration for their intentions or motives. Based on this theory, the actions of Wellness Village Spa were hugely unethical.

The management of the Wellness Village Spa is no doubt the major culprit since they are the one’s who closed down the spa without giving their clients any notice. In addition to this, they proceeded to take money from clients for services that they had no intention of offering.

The Social Contract theory holds that actions carried out by someone are morally permissible if they increase the benefits of an individual or indeed, the society at large. The actions of Wellness Village were evidently did not benefit the majority of the people. As a matter of fact, there are 7000 customers who are affected by the credit card liability issue as a result of the spa closing down. The spa should therefore be sued and held accountable so as to benefit the majority of the individuals.

One of the theories that guide manager’s behavior in an organization is the stakeholder theory which states that “managers should make decisions so as to take account of the interests of all the stakeholders in the firm” (Jensen 299).

According to the stakeholder theory, the stockholders are not the only legitimate claimholders and as such, the needs of other stakeholder entities such as customers, employees, supplies and community should be taken into consideration. By following this theory, the banks should cover some of the bills of the customers since they are stakeholders to the banking institutes.

Deontological ethics place emphasis on the assumed duty. This implies that duty is the basis of all moral actions regardless of the consequences. By applying this theory, it can be seen that the banks in question do not require to foot the bill for the cardholders. This is because the banks have fulfilled their duties to all parties as the theory stipulates.

The banks have paid for the customer’s purchases and therefore, the card holders should fulfill their obligation to settle the charges incurred by the bank. As such, the offer by the bank to support the investigative efforts of the customers to dispute the charges is more than enough.

Another theory that can be used is Utilitarianism which is considered to be the most influential ethical theory. This principle dictates that the collective welfare of the people overrides the individual’s right and as such, the theory advocates the maximization of happiness for the greatest number of people (Johnston 76).

In this approach, the net benefit is calculated and the net consequences evaluated. By use of the Utilitarianism the bank should take some liability and incur some cost on behalf of the cardholders. This is because the principle dictates that that the collective welfare of the people overrides the individual’s right and as such, the maximization of happiness for the greatest number of people is advocated for (Crisp, Potter and Perry, 20).

Being unethical inevitably leads to loss and damage for some of the people involved in the issue. This is the case in the spa scenario where the customers to the spa have lost money as well as been denied services they had a right to.

For this damage to be undone, the guilty parties must be held accountable. In an attempt to redress the clients of the misdeeds of the spa, it has been proposed that the directors be held personal accountable. This is because the directors of the company are no doubt the major culprits since they made the actual decisions to close the company but keep it “live” therefore causing lose to the customers.

However, it should be taken into consideration that the management was only acting in the interest of the shareholders who were the major benefactors of the profits obtained from the business dealings. It would therefore be unjust to personally hold the management responsible since they were only protecting the interests of the company (Fredrick 405). A better means of seeking justice would be to collectively punish all the stakeholders.

Being unethical inevitably leads to loss and damage for some of the people involved in the issue. This is the case in the spa scenario where the customers to the spa have lost money as well as been denied services they had a right to. For this damage to be undone, the guilty parties must be held accountable. From the above discussions, it can be seen that most of the ethical theories support the notion that the bank should at least foot part of the bill incurred by the customers.

In addition to this, the theories support the taking of legal action against the directors of the Wellness Village Spa for their wrongdoings. However, a more collective punishment is proposed since the directors only acted with the interests the company at heart. From this paper, it can be authoritatively stated that knowledge of ethical theories can greatly assist in solving ethical issues that arise in the business environment.

Chryssides, D.G and Kaler, H. J. An Introduction to Business Ethics , Cengage Learning EMEA. 1993. Print.

Crisp, J. Potter, P. A. and Perry, G. A. Potter & Perry’s Fundamentals of Nursing. (2nd ed). Australia: Elsevier Australia. 2005. Print.

Frederick, R. A Companion to Business Ethics, Wiley-Blackwell. 2002. Print.

Jensen, M. “Value Maximization, Stakeholder Theory, and the Corporate Objective Function”. European Financial Management, Vol. 7, No. 3, 2001, 297-371.

Johnston, George. An Introduction to Ethics, for Training Colleges. BiblioBazaar, LLC, 2009. Print.

  • Introduction to the Global Spa Industry
  • PMU Salon & Spa (Business Plan)
  • A Spa: Business Scenario
  • Ethical and Social responsibility issues in IHRM
  • Utilitarianism and Deontology: The Case of Coca-Cola
  • Social responsibility and ethical analysis of Darden
  • Ethical considerations of Executive compensation
  • Dealing With Ethical Issues in the Workplace
  • Chicago (A-D)
  • Chicago (N-B)

IvyPanda. (2019, February 20). Ethical Practice in Business Environment. https://ivypanda.com/essays/ethical-practice/

"Ethical Practice in Business Environment." IvyPanda , 20 Feb. 2019, ivypanda.com/essays/ethical-practice/.

IvyPanda . (2019) 'Ethical Practice in Business Environment'. 20 February.

IvyPanda . 2019. "Ethical Practice in Business Environment." February 20, 2019. https://ivypanda.com/essays/ethical-practice/.

1. IvyPanda . "Ethical Practice in Business Environment." February 20, 2019. https://ivypanda.com/essays/ethical-practice/.

Bibliography

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business environment legislation essay

West Virginia Environmental Agency Joins Water Toxicity Lawsuit

By Shayna Greene

Shayna Greene

The West Virginia Department of Environmental Protection was given the greenlight by a federal court to intervene in a suit claiming the Environmental Protection Agency must set water toxicity standards for the state.

The state agency established it has the right to intervene because the EPA and environmental groups that filed the suit negotiated a proposed consent decree—which has yet to be filed with the court—that would affect WVDEP, Judge Robert C. Chambers of the US District Court for the Southern District of West Virginia said Wednesday.

  • The Sierra Club, West Virginia Highlands Conservancy Inc., and West Virginia Rivers Coalition ...

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COMMENTS

  1. The Effect of Business Laws

    Rules and regulations have been implemented to control how businesses operate. These laws protect consumers and also preserve competition between businesses. Businesses that do not obey with any of the business laws will face fines or penalties. Dr. Henry R. Cheeseman, past researcher, is a lawyer and economist.

  2. 1.2 Understanding the Business Environment

    Business owners and managers have a great deal of control over the internal environment of business, which covers day-to-day decisions. They choose the supplies they purchase, which employees they hire, the products they sell, and where they sell those products. They use their skills and resources to create goods and services that will satisfy ...

  3. Understanding the Business Environment

    The external business environment consists of economic, political and legal, demographic, social, competitive, global, and technological sectors. Managers must understand how the environment is changing and the impact of those changes on the business. When economic activity is strong, unemployment rates are low, and income levels rise.

  4. Legal Environment of Businesses

    The business needs to have a legal contract or partnership deed besides tax identification number, certification, and necessary licenses. The law requires a partnership agreement to have a firm and all partners' names and addresses, the nature of their business, and the decision-making process (Skripak, 2016).

  5. Why It Matters: Legal Environment

    You set yourself up as a house-painting business and hired your college roommate to help you out. One fine summer day, the two of you were putting a coat of Misty Meadow acrylic latex on the exterior of a two-story Colonial. You were working on the ground floor around the door of the house while your roommate was working from scaffolding over ...

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  15. The Business Environment, Essay Example

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    Europe: New EU due diligence law governing big business is a landmark advance for human rights. A vote by ministers of the 27 EU member states today to pass a law requiring big businesses to identify and address negative human rights and environmental impacts in their operations marks one of the most significant advances of international business and human rights legislation in recent years ...

  20. The Legal Environment of Business

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  21. Republican Officials Weigh In Against Corporate Transparency Law

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  22. Biden Power Plant Rule Draws Narrow Attack From Utility Group

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  24. DeSantis, amid criticism, signs Florida bill making climate change a

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    Under the new law, climate change will largely disappear from state statutes. Critics say the move ignores the risks of climate change facing Florida, including rising seas, flooding and extreme heat.

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  27. West Virginia Environmental Agency Joins Water Toxicity Lawsuit

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