Chapter 6 External factors are beyond the control

Chapter 6 • External factors are beyond the control of the business • They are constraints as they limit the nature of decisions • eg. minimum wage • But opportunities exist/ competitive advantage. Some businesses will go beyond their legal requirements

The doctrine of vicarious responsibility • Employers are legally bound by the actions of their employees • Damages underline and know

4 main legal constraints/ controls • Employment law • Consumer law • Competition Law • Legislation concerning location

Employment law • Purpose – protects both sides • Worker exploitation • Employer loss of output and productivity

Employment • How are worker rights protected • • • Contracts – discuss Minimum age Working week No discrimination on the basis of race, age, gender, religion, ugly people Termination of employment • The employer must not leave himself open to allegations of unfair dismissal. The employee can seek redress at an employment tribunal

Impact of employment laws • How do they add to costs page 86 • Benefits to be gained from going beyond

Consumer Protection Law • Why do we need this • Unscrupulous business owners will exploit • The individual consumer is weak compared to the resources of an organisation • See 87 • Fit for purpose • No misleading or deceptive conduct • Do laws help or damage the business

Monopolies • By merger or takeover – a possible breach of market power • Air NZ and Jetstar • It may be in breach of Competition Commission legislation or a Fair Trading legislation

• How do monopolies develop • Name 3 ways • Some drawbacks to the consumer • Higher prices, limited choice • Restrictive practices • Price fixing, collusion, see Richard Pratt youtube • Predatory