The Political-Legal Environment

The political and legal environment consists of laws, government agencies, and pressure groups that influence organizations and individuals.

Sometimes the political-legal environment can create new business opportunities. Mandatory recycling laws boosted the recycling industry and launched dozens of new companies making products from recycled materials. On the other hand, overseas governments can impose laws or take actions that create uncertainty and even confusion for companies. Two key trends are the increase in business legislation and the growth of special-interest groups.

Increased Business Legislation
Business legislation is intended to protect companies from unfair competition, protect consumers from unfair business practices, protect society from unbridled business behavior, and charge businesses with the social costs of their products or pro-duction processes. Each new law may also have the unintended effect of sapping initiative and slowing growth. The United States has many consumer protection laws covering competition

Growth of Special-Interest Groups
Political action committees (PACs) lobby government officials and pressure business executives to respect the rights of consumers, women, senior citizens, minorities, and gays and lesbians. The consumerist movement organized citizens and government to strengthen the rights and powers of buyers in relationship to sellers.

Consumerists have won many rights, including to know the real cost of a loan and the nutritional quality and freshness of food.

Privacy issues and identity theft, which are key public policy issues, will remain hot buttons as long as consumers are willing to swap personal information for customized products—from marketers they trust.

Many companies have established public affairs departments to formulate policies and deal with important issues.

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