Legal Environment of Business

Legal Environment of business

Prepared By Manu Melwin Joy

Assistant ProfessorIlahia School of Management Studies

Kerala, India.Phone – 9744551114

Mail – manu_melwinjoy@yahoo.com

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What is business?

• Development• Provide things to enjoy life• Productive utilization of wealth

producing resources. • Leads to innovation and

improvements in production process- enriches the life.

• Today Business Enterprises dominate our lives.

Power of business

• The wealth of a country is, to

great extent, is created and

controlled by BUSINESS.

• This gives business and

executives thereof the

‘enormous power’ to affect the

lives of different segments of

society, such as customers,

employees, shareholders , etc.

Business environmentBusiness environment means the

sum of all external forces and

conditions that influence business

and potentially affects its

performance which includes

economic factors, socio-cultural

factors, politico-legal factors,

technical factors and international

factors .

Relationship b/w Business and its Environment

• Various interest groups: Consumers , Employees, Owners, Creditors, Suppliers, Distributors, Competitors, the Governments, etc.

• Survival and Growth of business will depend upon its relations with all these interest groups.

• Law and business are closely related disciplines (complementary)

Importance of law

People living in an organized

society have to follow certain

common rules and the state has

to enforce these rules. Law is the

sum of these rules which

regulate the life of people.

Otherwise, peaceful living is

impossible.

Definition of law

According to Holland,

“Law is a rule of external

human action enforced

by a sovereign political

authority”.

Elements/Characteristics of law

This definition states that,

following elements should be

available in a law

– A body of rules.

– External acts of human being

governed by rules.

– A sovereign political authority

enforcing rules.

• What is business?• Power of business.• Business environment.• Relationship b/w business and environment.• Definition of law.• Characteristics of law.