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Costs and profits

Businesses must comply with government legislation, but this means that they incur a range of additional costs in terms of time and money. Some of these costs are incurred because of the time required to produce documents, follow procedures and make sure legal obligations are met. Additional costs come from:

• supply training and safety equipment
• test products to ensure that they meet minimum safety standards
• pay staff higher wages
• provide product warranties
• employ additional staff to cover hours required
• make financial contributions to employee pensions
• quality assurance procedures

Additional profits can be made through an enhanced brand image, giving the business a better reputation and increasing the amount of sales they make. In addition, if a business is acting ethically and within the law, employees are likely to work harder and stay working for the business for a long period of time.

Marketing and sales

There are a number of advantages and disadvantages of legislation to marketing and sales:

• ensures a strong brand image
• less risk of impersonation by other brands and products
• less returns
• less chance of being sued by customers
• higher sales

Issues for marketing and sales caused by legislation include:

• the branding and IP must be original
• any issues with products could negatively impact sales
• conforming to all laws can be expensive, increasing the importance or generating more sales

Production

There are a number of advantages and disadvantages of legislation to production.

Advantages of legislation include:

• having high quality products may lead to more sales
• customers may have more confidence in the products
• employees may have higher productivity if they have good working conditions

Disadvantages of legislation include:

• all products and services must be produced to satisfactory levels
• using high quality materials is more expensive
• productivity may be reduced by conforming to the working time requirements

Human resource act

There are a number of advantages and disadvantages of legislation to human resources.

Advantages of legislation include:

• lower staff turnover, reducing recruitment costs
• happier employees, meaning better productivity
• lower level of complaints

Disadvantages of legislation include:

• can be expensive to ensure that all legal requirements are adhered to
• any mistakes can lead to expensive legal action
• employers have to be very flexible with employees