Legal factors in a business environment are defined as legal issues and procedures that the owner of a business must take into account in order to run the business transparently. Laws affecting businesses include federal regulations, state laws, and standards imposed by customs. These are implicit structures of authority that entrepreneurs must adhere to. Otherwise, they could face legal harassment in the future. Also known as socio-cultural factors, are the areas that affect the common faith and attitudes of the population. These factors include population growth, age distribution, health awareness, professional attitudes, etc. These factors are especially interesting because they have a direct impact on how marketers understand customers and what motivates them. When a company hires employees, it must provide them with safety and health facilities. Health and safety regulations contain legal attributes that help employees take legal action if the company fails to provide the necessary safety and health facilities. These standards include the following. At the time of writing, the U.S.
and China are negotiating a new trade deal. One of the key factors in the deal is the violation of U.S. intellectual property laws by the Chinese, who do not recognize U.S. patent laws. This considerable disagreement affects both political factors (trade policy) and legal factors (copyright and patent law). Product transportation, profit margins and the viability of certain markets are examples of legal factors that can be affected. If you want to analyze the situation a company is in, environmental analysis is a good place to start. This combines a number of different techniques – PESTLE analysis is one of them – to identify and evaluate the different external factors that influence a company.
Organizational law is the first type of business law that we will discuss here. Any company organized as a legal entity is subject to the law of the State that governs its operation and conduct. There are different types of business units. For example, corporations, limited partnerships, partnerships, limited liability companies, limited liability companies and limited liability companies, all of which have different legal forms and problems. There are federal regulations to protect the interests of workers in companies. This is an important legal factor that affects the economy. These health, safety and labour laws determine the following parts. Visit our Marketing Theories page to see more of our blogs on marketing buzzwords. If it is intended to conclude a contract with another natural or legal person, contract law is binding. This also has a special area that is directly related to factors that affect companies, for example, public procurement, also known as the Public Procurement Act.
Economic factors have a significant impact on the way an organization does business and its profitability. Factors include economic growth, interest rates, exchange rates, inflation, disposable income of consumers and businesses, etc. We all know how quickly the technology landscape is changing and how this affects the way we market our products. Technological factors influence marketing and its management in three different ways: It is imperative to understand the role of regional tax measures, legal factors that impact the business, and regulatory measures in determining the impact on your business. Another measure that will help your business adapt to the legal issues of its environment is to understand regulatory actions and consider all your regional economic analyses. It is now illegal for companies to fire workers because they join unions or are expecting a baby unless you ignore the new legal factors in the economy that will affect your business. Before firing an employee, a warning must be issued with appropriate reasons, otherwise the matter may be treated as unfair dismissal. However, there are some important legal aspects that you need to consider before contacting clients or potential clients. The three main areas of law you need to consider are privacy and data collection, intellectual property issues, and the rules and regulations of the FTC and other consumer protection agencies.
Let`s look at each of these macro-environmental factors one by one. This is perhaps the most important legal factor affecting the economy. The right to organize is implemented when a company is in the planning phase. This law determines the operational structures of a company that has not yet been established. When a business is structured, it must obtain a legal entity that must comply with state laws. These legal entities can be of the following types. In the business environment, these are the reasons why an understanding of the law is required for an entrepreneur. About the author: Leah Hamilton is a qualified lawyer and author who works at TermsFeed, where companies can use the generator to make legal deals in minutes. It may seem too simple to point out that before you can send emails or marketing messages, you need to collect contact information from your customers or prospects.
However, the actual process of collecting information is much more complex than it seems, especially if you`re trying to collect it in a manner that complies with the law. When considering legal factors in your PESTEL analysis, it`s important to remember that laws are generally not meant to restrict your business. Instead, they are there to help. According to Businesslawbasics.com, the purpose of laws is to set standards, maintain order, resolve disputes, and protect freedoms and rights. As a business owner, you don`t have to like all laws. However, it is imperative that you are aware of the laws that apply to your business and how they affect it today and tomorrow. The government, through its contractual rules and procedures, dictates how companies work with them. Not only does he actively encourage small businesses to participate in the expression of interest when purchasing products and services, but he also goes to great lengths and spends a lot of money on outreach programs to find good qualified small businesses as suppliers to avoid legal factors that would affect their business.
Typically, it provides information that helps small businesses bid with minimal risk, thereby managing the company`s legal factors. The following table lists some of the laws that may be considered when analyzing legal factors: When sending marketing emails or contacting people with flyers or advertisements, the first thing you need to do is protect your brand or logo. Political factors tend to be overarching issues such as tax policy, trade policy, or foreign trade policy, while legal factors tend to be more specific and relate to issues such as discrimination laws, antitrust laws, or intellectual property laws. However, they overlap. Take, for example, labour law, which we see as a political factor, and occupational health and safety laws, which we see as a legal factor. Intellectual property laws protect the patents and copyrights of a particular company. This is one of the most important legal issues for companies. Violating these laws can result in serious legal risks. A company`s intellectual property includes logos, domain names, company names, symbols or certain illustrations. If a company uses one of these intellectual property rights of another company without prior legal proceedings, the latter company can file copyright infringement charges against the first company. If you have an online store, or if you market online to people in the United States, you are very likely to have customers or potential customers in California, so you need to make sure you comply with this law. Legal factors are external factors related to how the law affects the way companies work and customer behavior.
If you use marketing language or original text in emails on your website, you may want to protect that text.