Legal environment

The legal environment refers to the frame work of laws, regulations and court decisions intended to encourage, guide and control business activities. Some are designed to protect workers, consumers, and communities. Other are designed to regulate the behavior of managers and their subordinates in business and other enterprise. Still others are designed to make contracts enforceable and to protect property rights. Business legislation thus has three main purposes (a) to protect business firms from unfair competition, (b) to protect consumers from unfair business practices and (C) to protect the interests of society from unbridled business behavior. Law and regulations are enforced to govern the conduct of individual and institutions in a society. Such laws govern the relationships between or among individuals and also the relationships between individuals or institutions and the society as a whole. Though the legal system provides the legal rights and freedoms to each individual or institution, it also sets limits or boundaries that may not be trespassed in such relationships. Violation of these boundaries results in penalties to the individuals or institutions. The managers should use their awareness of the growing complexity of the legal environment in the country to avoid situation that might results in conflict, misunderstanding, or outright violation of national laws.