Question

1. Why are the Political-Legal and the Regulatory separated in general and task environments?
2. How can a "Made in the USA" promotional effort become effective for a US company?
3. In what ways does SR benefit or harm businesses?

Answer 1

Political-legal factors are external factors just as the regulatory norms. However between them political and legal factors have a higher degree of variability compared to the regulatory system. For example, FDA regulation may provide strict guidelines that are stable and long term. However, political situations can change every 4-5 years. Also every time a different political party comes in power it is possible that they will bring legislation that will affect the legal system. Thus it has a higher degree of risk. This is why these two are divided into general and task environment.

At present, every country is undergoing a phenomenon of nationalism and protectionism. In USA, the narrative from media and experts have created an opinion among people that the country should produce goods and services within the border in order to boost their economy. Thus the sentiment of national products may ride high for quite some time. Using this sentiment, marketers and businesses can sell products labeled as “Made in USA”.

Social responsibility (SR) has its own share of benefits and drawbacks for a company. The benefits include the reputation upgrade that the company receives in the public eye. This can improve their customer base, investor relations, and share price. However, on the other active SR activities mean that some of the resources needs to be spent for them. Due to this, the company does not operate on an optimum level of profitability.