In the wake of worldwide economic turmoil and efforts toward recovery, understanding the interdependence of government and business is more important than ever. Monitoring, understanding and adapting to the political environment absolutely essential for any business, because it significantly affects every business. Economic growth and the development of a stable, competitive environment for businesses is a top priority for local and national administrations. Politics and business are interrelated, as one of the most important success factors for a government is its economic policy.
However, political decisions can have serious effects on the world of business. The political environment in a country affects business organizations and could introduce a risk factor that could cause them to suffer a loss. The political environment could change as a result of the actions and policies of governments at all levels, from the local level to the federal level. Businesses need to be prepared to deal with the fallouts of government politics. Global economic trends and local political pressures are forcing cities into competition for economic development. This phenomenon is now visible in Europe. In the United States, Britain, and France, local politics is being reconstituted, with the emergence of interclass, place-based development coalitions. These do not correspond to a single growth machine model but take differing forms in different national contexts.
Some of political factors that effect the business?
1. Stability of the government
2. Government type (dictatorship, democratic, monarchy, etc) 3. Economic policy of the government
4. Trade policy
5. Diplomatic events in surrounding countries
Changes in Regulation
Governments could change their rules and regulations, and this could have an effect on a business. For instance, after the accounting scandals of the early twenty-first century, the United States Securities and Exchange Commission...
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