Political-Legal Environment Affecting the Economy of an Industry

Political Legal Environment

Political- legal environment is one of the economic environment that its development has strongly impacts on the marketing decisions of the company. The political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.

Each factors of political environment has its own functions and impacts on the economic activities of the industry. The economic systems work best with at least some regulation. When an industry with well-conceived regulation, it can have more opportunities in competition and ensure fair market for goods and services.

The public policy is a set of laws and regulations that the government makes to guide commercial or to limit business for the good of society as a whole. Almost marketing activites requires a wide range of laws and regulations to stable the system and help to make true marketing decisions.

Legislation affect business around the world and it has increased steadily over the years such as local-content laws, import restrictions, tax controls, price controls, labor problems. .etc…China is one of the Samsung market and it has many laws relates to some issues such as custom import and trading, foreign investment, information technology, pricing and etc…. to regulate the activites or the development of Samsung electronics industry in China, for example:

Provisional Regulations on Trade Administration of Technology Introduction and Equipment Importation 1- 1996, Implementation Rules on Small-Volume Frontier Trade of Importing Machinery and Electronic Products, Notice on Policies for Reform and Adjustment of Import Tax , Regulation on Administration of Organizations in Charge of Import or Machinery and Electronic Products in Localities and Departments at the Central Level…etc… and through those laws, Samsung enterprises located in China must comply with all the articles of Chinese laws and all the regulations that they sign together.

The regulations are constantly changing and the marketer must work hard to keep up with changes in regulations and their interpretations.. . .Another example is the activites of Samsung electronics VietNam (SEV) in export and paying tax. According to some regulations and laws on taxes, the contributions to the budget through taxes including import or export taxes, value added tax (VAT) and environmental protection taxes. The political sanctions, which protect the companies from each other.

Although business executives may praise competition, they sometimes try to neutralize it when it threatens them, so laws are passed to defined and prevent unfair competition. For example, Korean companies have been increasingly subject to the extraterritorial reach of foreign antitrust laws, in 2005, the US department of Justice(DOJ) imposed fines of $300 million on Samsung electronic, a Korean manufactuer of dynamic random access memory(DRAM) and its US subsidiary, Samsung semiconductor, for participating in an international conspiracy to fix prices in the DRAM market.

In addition, according to local reports, the Japan fair trade commission will fine affiliates of Samsung electronics an unprecented amount of several billion yen for price fixing.

This was because their sale to subsidiaries of Japanese companies indirectly affected the Japanese market. The Japanese sanctions also protect the right of their authorities and consumers.

Another example is the patent infringement between Samsung and Apple. According to US infringement law, US Court ordered Samsung to pay $1.05 billion damages, after ruling that the South Korean firm infringed on some Apple patents in patent infringement trial between Samsung and Apple. And after that, Samsung’s entire line of galaxy were banned in Europe such as the Galaxy S II the Galaxy Tab 7.7… The government regulation also help to protect the interests of society against unrestrained business behavior.

For example, Samsung had been accused by China Labor Watch of countenancing illegal and even inhumane conditions at its factories in China, and the group noted that the workers' overtime at the facilities could reach or often times exceed 100 hours a month. Under current Chinese law, overtime is limited to 36 hours a month. After that, Samsung quickly moved to address the problem also further suggests that Samsung is taking this very seriously.