BU111 Lecture Notes - Lecture 23: Environment And Climate Change Canada, Amazon Cooperation Treaty Organization, 18 Months

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BU111–Lecture23–PoliticalFactors
PEST–Political–legalenvironment
Elements:Laws,regulations,taxes,tradeagreementsorconditions,politicalsystem,political
stability
Businessimplication:Affectsuncertainty,riskandconstraints/costsfacedbyfirm
Why?Protectionofconsumers,supportforandprotectionandregulationofdomestic
businesses,opportunitycreationinforeignmarkets
UnlikeotherfactorsofPEST,politicalfactorscanbemoreinfluencedbythebusinessitself.
Howgovernmentinfluencesbusiness
Customer–buyproductsandservices–justlikeanyotherbuyers
oGovernmenthasalotofnegotiationpower–largescalepurchases
Competitor–Canadapost,CBC
oHardtocompeteagainst,theydon’tputprofitaspriorityandhavelargeinfluence
inenvironment
Regulator/lawmaker
oRegulatesbusinessactivity;influencestechnologystandards–CRTC
oPurpose:
Promotescompetition–competitionact,smallbusinesssupport
Promotesinnovation–intellectualpropertyrights
Protectsconsumers–i.e.hazardousproductsact
Achievesocialgoals–i.e.universalhealthcare,education
Protecttheenvironment–Canadawateract,fisheriesact
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Publicgood–cannotrestrictaccessbutcanplacelegislationsto
stopdamagingtoit
Taxationagent
oCollectedbyallthreelevelsofgovernment
oTypes–business,personal
Businesstaxesarefixedrates–muchlowerthanindividuals
Businessesprovideemploymentandiftaxarehighertheycanstartupin
othercountries
oApproaches–progressive,regressive,restrictive
Progressive–percentageincreasesasdollarsincrease
Regressive–regardlessofincome–taxpaidissameexHST
Restrictive–meanttorestrictconsumption–liquor,carbon,Tabaco
Providerofincentives&financialassistance
oSubsidies,taxbreaks,supportservicesforsmallandlargebusinesses,research
funding
Subsidiesstimulatedemandforcertainproductsexhighefficiencygoods
Taxbreakencouragesbusinessstartup
oBailouts
Helpinghandtoallowbusinessestonotgetoutofmarketastheir
existenceisbetterforeconomythaniftheystopped
Providerofessentialservices
oHighways,armedforces,police&firedept.,hospitals,education
IntellectualPropertyRights
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