Unit Title: The Business Environment

Level: Diploma
Learning Outcome:
1.

Unit Code: TBE

Assess the significance of the market upon business activity

Indicative Content:
1.1 Explain the different market structures: there are two extremes of
economic systems:
The fully-planned economy is one in which the basic decisions
about the production and distribution of goods and services are all
determined by the political machinery of the State. It is the State
which has to match production and consumption.
The pure market economy is one in which the basic decisions about
the production and distribution of goods and services are all
determined by the interaction of the forces of demand and supply in
unregulated markets. This means that competition between suppliers
becomes a key element in the market. It should be noted that in
practice a completely pure or unregulated economy in a modern
community is a virtual impossibility.
1.2 Discuss the role of competition and its limitations.
The function of the market is to enable buyers and potential buyers of a
good to communicate with suppliers and potential suppliers of that
good.
A good, in this context, can be taken to be any available physical
goods or services.
This will ideally result in competition between suppliers that permits
demand to be met at a price which satisfies both buyers and suppliers of
the good.
The incentive for efficiency in a competitive market is the desire to
survive in the face of competition.
A major disadvantage of a competitive situation is that equilibrium is
difficult to achieve or, if achieved, to maintain. Thus there may be either
over- or under-production which can, at various times, allow suppliers to
make excessive profits or alternatively may mean they are unable to
make sufficient profit to survive.

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1.3 Identify the potential types of failure of the market mechanism and their
impacts on business.
If demand is greater than supply, i.e. if people are trying to buy more
than can be supplied, the market price will rise. If suppliers are trying to
sell more than buyers are prepared to buy then the market price will tend
to fall.
There is also a critical need for reliable market intelligence to enable
suppliers to continue to develop. If they become inefficient and
unprofitable they will not survive. In practice it is the firm which can make
above-average profits which has the best chance of survival and growth.
Examiners Tips:
Pay particular attention to the role of the State in the economy. Understand
the importance of achieving a balance between supply and demand, and how
competition plays a role in this process. Be able to discuss why profit is so
necessary to a business and the broader economy.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:

Unit Code: TBE

1. cont. Assess the significance of the market upon business activity

Indicative Content:
1.4

Discuss the role of the regulatory authorities and the principal effects of
regulation upon business.
Regulation is normally the responsibility of governments. Regulation is
one of four broad areas of likely government involvement in an economy
and is likely to take one of the following forms: establishing agencies to
discourage monopolies and restrictive trade practices, or the introduction
of laws and the imposition of taxes.
With the inevitable blurring of the distinction between economic and
social policies there will inevitably be disagreement as to efficiency and
fairness of the measures employed, not least given the need for
governments to be re-elected and a changing political landscape.
Regulation can be a strategy used by governments to boost
consumption for goods or services that are deemed socially desirable.

1.5 Discuss how the interests of stakeholders can be protected through

good corporate governance and practice.
Most organisations have many different people who feel they have an
interest in its activities. Stakeholders are individuals or groups of people
whose interests are affected by the activities of the business. Given the
breadth of interests, most organisations do not recognise a responsibility
to all potential stakeholders. Those commonly recognised in a public
company are shareholders, banks and creditors, managers and other
employees; customers and government may also have some say.
The extent to which obligations to these groups are recognised is a
major issue of corporate governance and each organisation will seek to
recognise and embed industry good practice within its own policies and
procedures, often using external bodies to benchmark against national
standards.
1.6 Appreciate potential ethical dilemmas and decisions the organisation
may face in relation to potential opportunities to gain competitive
advantage.
The core dilemma that an organisation will face is whether in employing
strategies which create/maintain competitive advantage, these strategies

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fit with the corporate culture and avoid ethical dilemmas. Typical ethical
dilemmas include green issues, fairness in trade with Third World
countries, health-related issues and impact upon local communities.
Ethical dilemmas are not legal questions. They involve situations where
there are no right or wrong decisions; instead there are alternative
choices, each of which may be equally valid depending on the
perspective of the decision-maker.
Examiners Tips:
Central to an understanding of economics is how, why and when a
government might intervene in a national economy. Does this intervention
always achieve the intended outcome?
Consider the ethical implications of seeking competitive advantage both in
local and international markets.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:
2.

Unit Code: TBE

Understand the importance of international markets to organisations

Indicative Content:
2.1

Appreciate the importance of the European Single Market to UK

businesses and also to organisations based outside the European
Union.
The development of the European Single Market has been characterised
by an on-going tension between those supporting the free-market
principles of increasing competition and deregulation and the politically
and/or nationally motivated interventionists. For UK businesses there
are clear opportunities provided they have the ability to maximise them.
More difficult to manage is the potential danger that the increasing power
of such large trading blocs will do little to stimulate international trade,
particularly in the context of developing countries.
A growing European Union has been the key to unlocking business
potential. Further challenges exist, including closing the technology gap
with the United States of America. The aim continues to be to invest in
people in order to grow and become a more dynamic, growth-orientated
knowledge-based economy.

2.2

Identify and discuss potential opportunities and threats to the

organisation arising from the European Union.
Opportunities include: increased levels of overall economic activity,
economies of scale and increased efficiency, better service to the
consumer, concentrations of European industrial activity leading to
improved competitiveness in global markets, stimulation of
specialisation.
Threats include: technical barriers (imposed by individual countries)
often under the auspices of consumer or health and safety legislation,
fiscal barriers such as different regimes for VAT and excise duties.
The European Union had a nominal gross domestic product of US$16.6
trillion (in 2007), representing 31% of the worlds total economic output.
The EU is the worlds biggest exporter and second biggest importer. 163
of the worlds 500 largest corporations are registered in the EU.
With the power that this size engenders comes responsibility. The EU
aim is free, but fair, world trade. The EU wants a level playing field for
all countries and clear rules for all to follow. Thus a role is the
development of a set of internationally agreed rules.

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EU trade policy works on two complementary levels:

Multilateral working to rules agreed by the World Trade
Organisation
Bilateral and regional this relates to trade between the EU and
individual trading partners or other trade blocs.
The EU played a major part in setting up the WTO and takes a very
active part in its activities.
The EU has made a commitment to trade-related technical assistance
for African, Caribbean and Pacific countries.
Examiners Tips:
Use the EU as an example of how trading blocs function. Be able to discuss
the relative merits of the EU and similar groups.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:

Unit Code: TBE

2. cont. Understand the importance of international markets to organisations

Indicative Content:
2.3

Discuss the possible advantages and disadvantages to the organisation

when presented with opportunities to outsource activities overseas.
By outsourcing, an organisation can reduce the degree to which it is
vertically integrated and therefore the overall amount of specialist skill
and knowledge it must possess. This can lead to lower risk and greater
flexibility since there is less need to invest in equipment and buildings. It
is also freed from the need to recoup large research and development
investment.
Dangers include reduced control over quality and/or the need to put in
place costly quality procedures, the danger of outsourcing a good or
service which proves to be central to the organisations competitive
advantage and the risk of local upheaval or political intervention causing
costs to rise or supply to be reduced.

2.4

Describe possible ways in which the organisation might investigate and

appraise overseas market opportunities.
An international market assessment involves a series of analyses based
upon: basic need and potential, financial and economic conditions,
political and legal forces, socio-cultural forces and competitive
environment. These will take the form of a series of screening activities
enhanced by visiting on-site and talking to trade representatives and
officials. This may involve using local specialists to gather information
and offer advice, screening and visits.

2.5

Identify key steps in planning and preparing for market entry into an
overseas market.
Some questions to ask before an organisation commits to international
business are:
Are you ready to go international are you successful at home, is
there sufficient volume in the proposed market?
Have you a thorough understanding of your product do you know
how to make the most of your products strengths?
Is your internal activity strong enough is the necessary infrastructure
in place and effective?
Do you have an overall strategy into which international business will
fit?

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 Have you a sufficiently robust and detailed strategic plan which details
the time and money commitments that will be required?
Examiners Tips:
Pay particular attention to the risks and opportunities of entering international
markets. Be able to discuss the approaches used, and sources of information
available, when considering a new market.
Focus on the strategies that can be adopted and the need for careful planning
before committing to a new market.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:
3.

Unit Code: TBE

Understand key economic concepts and principles which underpin the

operation of the market

Indicative Content:
3.1

Explain the interaction of supply, demand and price, and the concepts of
elasticity and equilibrium.
For a market system to operate there must be two distinct forces:
Demand derived from the wants of the consumers (organisations,
households, and individuals).
Supply derived from the intentions of the agencies of production
organisations concerned with producing and distributing goods and/or
services.
A further key element is money. Money impacts in terms of wages to be
paid, spending power of consumers and profits to an organisation. Most
specifically it will provide the third element of the supply and demand
cycle price.
Price often determines the viability of the good (product or service) in
the marketplace.
However the concept of elasticity must also be considered.
Elasticity is a measure of change. We want to be able to measure and
compare the effects on demand of changes in price, but price and
quantity are measured in different units, and also the unit prices for
different products vary a great deal. To overcome this problem, elasticity
uses proportional changes so that we can compare the effects of a given
proportional or percentage price change.
The more elastic demand is said to be, the more it appears to be
influenced by changes in price. An inelastic demand suggests there is
little or no impact made by a change in price.

3.2

Discuss the possible impacts and interaction of the perceptions and

actions of customers, under- and over-supply, cost structures and
pricing strategies and the supply and price of labour and finance.
This requires consideration of the impact of value judgements, i.e.
judgements that depend on opinion or attitude and which are not matters
of fact which can be proved true or untrue. This requires us to take on
board the concept of equity.

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Equity has two major aspects:

Horizontal equity requires identical treatment of identical people, thus
eliminating the impact of differences in sex or culture.
Vertical equity aims to accord the same economic treatment to
different people.
A consideration of equity should also take on board its practical impact
and the business reality that most organisations adopt an approach of
profit maximisation.
In practice, organisations may need to adjust strategies to respond to
competition, economic downturns and the outcomes of wages
negotiations, both with their own organisation and in the marketplace as
a whole.
Examiners Tips:
Initial focus for attention is an understanding of elasticity and the interplay of
money and price in determining the degree of elasticity. Next it is important to
understand the role of customer perception and, leading from this, why
businesses take on board the concept of equity.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:

Unit Code: TBE

3. cont. Understand key economic concepts and principles which underpin

the operation of the market
Indicative Content:
3.3

Explain the attributes of the different types of market: perfect

competition, monopoly and oligopoly.
Perfect competition can be described as the belief that consumers
have a choice between different goods or services or different suppliers
of these, and that they are free to exercise choice according to our
perception of what will provide the most satisfaction or the greatest utility
in relation to the money a consumer is prepared to pay.
For perfect competition to exist, the following features must be present:
the good traded is homogenous, price is the result of the interaction
between supply and demand, there is perfect knowledge throughout the
market and conditions are the same, no barriers to entry exist, market
decisions are only based on economic motives.
Candidates need to be aware of the implications of perfect competition
for organisations operating in markets approximating to these conditions.
Similarly the impact of monopoly and oligopoly.
Monopoly: This is the other end of the range from perfect competition
and implies a market with only one supplier. Arguments for it include
economies of scale and against it that it leads to excessive profits.
Oligopoly: In practice this is often a typical market structure where
supply is controlled by relatively few firms. Thus an increase in sales by
one impacts on the sales of the others. This results in a high degree of
interdependence in what are mainly very large organisations operating in
world markets with a number of products.

3.4

Describe the concept of competitive advantage.

Broadly, businesses can have two types of advantages over their
competitors. These may be manifested in lower costs or product
differentiation.
Competitive advantage may be a country-specific advantage (CSA) or a
firm specific advantage (FSA). Michael Porters work on strategies for
competitive advantage is very helpful in guiding organisations in how to
maximise their opportunities.

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There are four generic strategies that businesses can adopt. These may
be summarised as:
Differentiation strategy: this entails offering a wide variety of
products at a premium price.
Cost leadership strategy: when employing this strategy organisations
will offer lower quality and cheaper products in the marketplace.
Focused differentiation: with this approach an organisation will offer
specialist products at a premium price.
Cost focus: the choice made in this strategy is to offer simple,
standardised products at low cost.
Examiners Tips:
To tackle this section the starting point is to be realistic about the likelihood of
perfect competition. This will then allow a balanced consideration of monopoly
(in particular) and oligopoly. It is essential to think of these as working
systems rather than just learning the definitions of the terms.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:
4.

Unit Code: TBE

Understand key aspects of the macroeconomic environment as they

apply to business

Indicative Content:
4.1

Discuss the factors which may influence the levels of expenditure and
investment in a national economy.
Major influences in an economy are government spending (influenced by
the extent of market failure, ability of the State to correct this, the
demands of the electorate and the level of activity in the economy).
Investment in the production of capital goods, i.e. those which are
created to be used in producing goods and services rather than being
consumed for their own sake (influences include volume of disposable
income, expectations, levels of profit, corporation tax rate of interest,
changes in technology and the cost of capital goods).

4.2 Explain the ways in which governments use fiscal and monetary policies
to boost or slow the rate of economic growth and control inflation.
Fiscal measures are the use of the governments own expenditure and
powers to raise revenue. This involves the use of government spending
and revenues, especially taxation, as an instrument for manipulating the
level of real national product. Monetary measures are the use of the
governments power and influence over the supply of money and credit
and their cost. Policy based on monetary measures involves influencing
the supply and/or price of money, and through this the level of economic
activity. Options available to governments are credit creation and control
of interest rates through the banking system.
4.3 Explain how key economic indicators might influence the preparation of,
and be used in preparing business plans and forecasts.
Gross domestic product (GDP) is the key measure of the economys
overall output from quarter to quarter. Other indicators include:
employment, price indices, housing, personal income and consumption.
These give a guide to businesses as to how the economy has been
performing, and provide trend data and therefore an indication of how
the economy might perform in the future. For example, a growing
economy means more jobs, consumers confidence and therefore
increasing spending power. Thus investors can select where and when
to invest and firms can make commitments to expansion if the indicators
are positive.

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4.4 Discuss the possible impacts of Regional Development policies and

planning and development controls on business.
The EU regional policy supports transport, innovation, environmental
and urban development in Europe's regions and cities. This approach to
regional policy is designed to build the capability of regions, putting
greater emphasis on growth within all regions, strengthening the building
blocks for economic success and boosting regional capacity for
enterprise. Such policies will seek to maximise potential in the
workplace, strengthen regional economies, and encourage enterprise
and business growth and investment. To achieve this, regulations and
controls will be put in place which may limit some business activity, but
encourage others.
Examiners Tips:
Think carefully about the role of government spending. Understand the
difference between fiscal and monetary policies. Be able to discuss GDP in a
practical way and find examples of the impact of regional development
policies.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:
5.

Unit Code: TBE

Understand the importance and effects of taxation on business

Indicative Content:
5.1

Describe the economic principles, objectives and typical structures of

national taxation systems.
Tax is how the government raises money to spend on public services,
such as education, health and the social security system. Taxes can be
classified as either direct or indirect taxes. Direct taxes are levied on
income and can be used to increase or decrease spending power.
Indirect taxes are levied on spending, an example being VAT. A typical
system will be a combination of both types of taxation. Note that tax
systems will also have exemptions, relief, thresholds and allowances
all of which can make the system difficult to understand.

5.2

Evaluate the potential impacts on businesses of changes in direct and

indirect taxes.
Changes in taxes levied by governments will influence aggregate supply
and aggregate demand. For example higher taxes might allow
governments to spend more with a resultant effect on businesses
supplying goods or services into markets the government wishes to see
grow. Thus if government wants to see an improved education system,
businesses supplying goods or services to the education sector will see
their market opportunities increase. In practice there are two types of tax
direct and indirect. Look at examples of each, and use the examples to
consider where the burden for each will fall and why both forms of taxes
are likely to be employed.

5.3

Discuss the potential opportunities and threats to a business of

differences in both the types and levels of taxes between nations, with
specific reference to location, costing and pricing decisions.
A national government will attempt to protect its own tax base, aiming to
keep its tax system competitive. There will be concerns that tax systems
in other countries will give their companies an unfair advantage or may
offer a favourable tax regime which attracts investment, for example
from large multi-national corporations. From the perspective of a
business, any tax benefits will strongly influence location and
employment decisions. An interesting development is the EU-wide
code of conduct against harmful tax competition. This is good news for
EU-based companies, which today increasingly identify EU tax law
issues as one of their three biggest challenges for the years ahead.

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Arguably this initiative will boost cross-border activity and

competitiveness in Europe.
The issue of differences in taxation between countries, particularly within
the same trading bloc, can be a particularly sensitive one for partner
countries to deal with.
Examiners Tips:
Dont get bogged down in trying to understand the detail of tax systems.
Instead concentrate on forms of tax and how taxation can be used by
governments. Be able to distinguish between direct and indirect tax and why
each might be employed.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:
6.

Unit Code: TBE

Understand common marketing strategies and techniques available to

businesses

Indicative Content:
6.1

Discuss psychological, socio-psychological, sociological, economic and

cultural factors influencing customer behaviour and needs.
Markets are increasingly segmented, resulting in marketing effort being
aimed at specific groups. The basis for this segmentation will be cultural,
although the ability to pay and whether there is an actual need must also
be considered. Differences between cultures and societies will impact on
patterns of product or service adoption. Marketing, however, has the
opportunity to use these differences when promoting products or
services. Thus aspirations to a better lifestyle, are a consideration when
promoting products and services, and producers may try to create a
market (e.g. the teenage market).

6.2

Select methods of market research (MR) appropriate to the business

and its market.
Market research is the objective gathering, recording, analysis and
retrieval of data relating to the marketing of goods and services for
problem solving and improvements in decision-making and control.
Research can be used to improve decisions on pricing, products,
communications such as advertising and sales promotion, or distribution.
Choice of method will be dependent upon factors such as: time available
for research, budget, internal capability and access to specialist
consultancies.

6.3

Identify and describe common MR techniques used by businesses,

including the use of primary and secondary data and MR, analysis of
competitor and customer data and the use of support from external MR
consultancies.
Research can be divided into desk and field research. More recently online research has been introduced which claims to cut overheads,
achieve better focus, gain intelligence quicker and in a form that can be
more easily analysed. All can and should be utilised. Often cost and time
available will determine what balance is adopted. Similarly with the
decision when to use a consultancy who may offer specialist skills but
are likely to be expensive.

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6.4

Discuss the reliability of research including issues around sufficiency of

sample size, and sample and interview bias.
A number of sampling techniques are used to assist reliability. These
may be summarised as: random sampling (simple random sampling,
systematic sampling, stratified sampling and cluster sampling) and
non-random sampling (judgement sampling, convenience sampling and
quota sampling). These will help to reduce bias in selection of samples.
To reduce interview bias effort must be put into questionnaire design, to
produce questions free from bias, and training staff to reduce the
likelihood that researchers will introduce bias during interviews. Followup interviews can also help as a means of testing reliability of responses
received.

Examiners Tips:
Start by being clear as to how and why markets are segmented. Be able to
discuss different research techniques and when to use each. Know the
relative merits of field and desk research and be able to assess the value of
different sampling techniques.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:

Unit Code: TBE

6. cont. Understand common marketing strategies and techniques available

to businesses
Indicative Content:
6.5

Identify and discuss key implications for the business arising from data
such as that relating to competitor analysis, market size, value and
volume, market trends and market share.
Companies must continuously assess the value of the markets open to
them. By having information about markets it can be decided which offer
the best opportunities for development. Business success will depend on
being well-enough informed to identify actions which enable a company
to effectively meet future customer needs.

6.6

Describe the nature and process of conducting a SWOT analysis.

SWOT analysis stands for strengths, weaknesses, opportunities and
threats. The aim of SWOT analysis is to match external environmental
changes with internal capability. Building on this the organisation can
determine how to make the most of opportunities and defend itself
against threats.

6.7

Describe possible growth strategies available to the organisation in a

competitive environment.
Strategic direction will be based upon two factors: the market and the
product. If a company decides that it wishes to increase sales then the
following strategies are available: market penetration, new product
development, entering new markets and diversification.

6.8

Describe the key elements of a marketing plan and the types of

strategies and tactics that it might contain.
A marketing plan will contain the following elements: a mission or
purpose statement, a financial summary, a market overview, key market
segments (with a SWOT analysis for each), a summary of the SWOTs
assumptions, objectives and strategies, resource requirements. A
marketing strategy must define the broad approach a company plans to
take to exploit its opportunities and achieve its objectives. It will include:
strategic options, medium term strategy, key results areas, resource
requirements, longer-term implications.

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6.9

Describe how marketing performance can be monitored and reviewed.

A key element of any marketing plan is being able to identify progress.
Key aspects of performance can be monitored if the necessary
management information is made available regularly. This needs to
cover: overall performance (e.g. sales and marketing costs), promotion
performance (e.g. number of leads generated and followed up), field
sales (e.g. number of new accounts and average selling cost), internal
sales performance (e.g. number of enquiries received and quotations
given), and customer service (e.g. number of deliveries by due date and
number of complaints).

Examiners Tips:
The most important area to focus on is SWOT analysis. What is SWOT
analysis, why is it so helpful and how do you carry it out? This will help
understanding of market planning and strategy. Make sure you can talk
through the stages in developing a marketing plan.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:
7.

Unit Code: TBE

Understand the legal framework in which business organisations

operate

Indicative Content:
7.1

Explain how key legal principles can affect the legal form chosen for the
business.
Potential business owners must first decide how the business should be
structured and operated. The legal form chosen helps to determine the
legal requirements of a business. Trading as a sole trader, a limited
company, or as a partnership will have different implications, e.g. tax
regulations. Each has advantages and disadvantages, choice will
depend on which one suits the businesss circumstances. It is essential
to obtain specialist legal advice.

7.2

Explain the essential elements of a legally-enforceable contract for the

provision of goods and services.
The word agreement is often used to mean a contract. However, an
agreement will only be a legally-binding contract if the following elements
of contract exist: an offer, acceptance, consideration (both parties must
give something and receive something in return), an intention to create
legal relations. Remember that that jurisdiction of the contract, i.e. under
whose rules it is legally enforceable, is also a consideration (e.g. doing
business in the EU).

7.3

Identify and discuss the impacts of the vitiating factors on the

enforceability of contracts.
A number of factors can impact upon a contract with the result that it
becomes invalid. For example is the contract tainted with illegality (e.g.
fraud) and if so were the parties aware? Others include: were conditions
of the contract met? were requirements imposed by statute met, is there
a lack of contractual capacity (or authorisation)?

7.4

Explain the ways in which a contract can be discharged or

terminated.
A contract will be terminated when the parties to the contract are
released from their contractual obligations. Contracts can be terminated
by: breach of contract, agreement between the parties, performance of
the party's contractual obligations (discharge in this way takes place

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when performance of the contract is complete and exact, with reference

to the terms of the contract) and frustration.
7.5

Explain the various types of terms: express and implied, conditions,

warranties, innominate.
The following key terms need to be understood: express and implied
(express terms will be specifically mentioned, implied are of two main
types implied by the courts or by statute), conditions (notes and
information contained within the contract explaining what the contract
requires, i.e. the terms of the contract), warranties (the underlying
matters or facts as they are being presented in terms of the contract),
innominate (to nominate someone to act on your behalf, such as a subcontractor).

Examiners Tips:
You must understand the legal terms used and be able to understand what a
contract is, know when a contract can be terminated, what entering into a
contract implies and how you can end a contract.

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Unit Title: The Business Environment

Level: Diploma
Learning Outcome:

Unit Code: TBE

7. cont. Understand the legal framework in which business organisations

operate
Indicative Content:
7.6

Describe the types, and appropriate use of, negotiable instruments by

businesses.
A negotiable instrument of business is a specialised type of agreement
for the payment of money. It is unconditional and can be transferred by
negotiation. Examples include cheques and banknotes. It is not a
contract per se (it doesnt have the four key elements of a contract), as
contract formation requires an offer, acceptance, and consideration,
none of which are elements of a negotiable instrument. The right to the
performance of a negotiable instrument is linked to the possession of the
document itself (with certain exceptions such as loss or theft).

7.7

Explain the key statutory protection that is given to consumers in relation

to the sale and supply of goods and services.
Key legislation in the UK that impacts on the sale of goods includes:
Consumer Protection Act, Data Protection Act, Sale of Goods Act,
Sunday Trading Act, Supply of Goods and Services Act, Trade
Descriptions Acts.

7.8

Explain the liabilities placed on businesses by health and safety

legislation and the duty of care owed to consumers, employees and any
visitors to premises.
The legislation (includes Health & Safety at Work) prescribes a range of
duties in the prevention of harm to employees and others in or about
places of work. These cover safety, health and welfare at work where
negligence (see Law of Tort) is probably the issue with greatest impact
on running a business. Six duties of care are identified in the UK
(Common Law) requiring a safe workplace, system of work, and
equipment. Also competent employees, information on dangers and
enforcement of rules of conduct.

7.9

Explain the legal protection available to employees relating to

recruitment, termination of employment and their treatment while at
work.
Legislation (Contract of Employment) is in place in the UK to protect
employees against unlawful dismissal. This protection is further

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extended by additional legislation that includes laws relating to

discrimination at work. Industrial tribunals exist to provide the right of
appeal and further support comes from the European Unions courts.
Note should also be taken of UK legislation relating to redundancy.
Within the workplace grievance and disciplinary procedures help to
clarify the employees rights and responsibilities (see ACAS).
7.10 Explain the key provisions of environmental (green) regulations as they
apply to businesses.
Green regulations cover a wide range of issues including: air quality,
chemicals, contaminated land, energy, noise and nuisance, planning,
waste and water. It is also important to recognise that it is not simply a
matter of compliance, but also a need to recognise customers interests
and concerns.
Examiners Tips:
Dont try to learn the full details of the legislation. An awareness of impact and
key issues is enough. Be able to refer to the legislation in the context of
business situations that you may meet. A number of websites exist which can
provide both summaries and examples of situations that have arisen. A good
way to remember the key issues is to consider them in the context of an
organisation with which you are familiar.

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