1. Unit 1 Business Purposes
P4- outline the role of government in creating the
business climate

2. Aim of this presentation
Understand the business context in which organisations operate

3. Business Context
Understand the business context in which organisations operate
Things outside the business that influence the decisions that it makes.
One component of this business context is:
The way in which government affects business through its handling of the economy.

4. Government Who are they?
Groups of people who have been chosen by voters to represent them.

5. Role of Government
There are 3 main layers of government which affect businesses in this country
European Union government - consists of 3 main decision making bodies
European Commission
Council of Ministers and
European Parliament
National Government
Decisions made by the government of this country and approved by the House of Commons
Local Government
Local Council in your area

6. European Union 27 countries or member states
They have the power to pass laws and make decisions which affect businesses in every EU country. Some rules made by the EU allow some countries to opt out.
Countries in the EU
Britain has chosen not to join the Eurozone – the single currency

7. The European Union

8. National
The British government makes laws about what businesses can and cannot do.
In Wales, Scotland and Northern Ireland, there are regional assemblies that also make important decisions that affect businesses in these countries.

9. Local
Local representatives or councillors are chosen. Local councils pass laws which affect local businesses.

10. Role of Government Government European National Local Makes decisions
Regulations and other rules are created by European Union decision-making bodies
Laws created by Parliament
Local rules created by local councils
that affect businesses
Example, setting a minimum wage that businesses must pay their employees
setting out pollution controls and environmental standards that must be met
Example, setting out how businesses and charities must register and the paperwork they have to create
Example, covering opening hours of nightclubs and discotheques

11. Government Policies
Government policies and actions affect businesses in many different ways:
Growth – the number of units produced. The more goods are produced, the more people are employed, they earn more, they spend more and so on.
Growth is measured by GDP = gross domestic product ie the total value of goods produced in a country in a given year.