The impact a political-legal environment can have on business can cause so many craters so as to make that business look like the moon. It was a political-legal environment that gave birth to the corporate personhood doctrine and that gave rise to the corporate world we live in today. Political-legal environments can only hope to regulate markets, and market regulations will most certainly have profound impacts on business organizations. An example of the kind of bone headed impact a political-legal environment can have on a business one need look no further than American auto makers, the electric car and California. For whatever reasons, several of the auto manufacturers in the United States began developing electric cars which they leased to satisfied customers. Then, California decided it would be a good idea to mandate to American auto makers that if they expected to sell their cars in California they would have to invent some new technology reducing carbon dioxide. Presumably, California expected to see an increase of electric cars being sold by auto makers. What happened is quite the opposite and the auto makers took a hard look at their electric car program, uncertain how to market a "clean vehicle" without admitting the piston engine vehicles are dirty, realizing that much of the profit from a piston engine vehicle comes with the replacement of parts and not so with electric cars and finally, realizing that a State, not even the State of California can make them build technology they don't have, nor can any state even make them keep building the technology they do have, and so, the auto makers killed their own electric car program and this was the impact of a political-legal environment.
Monitoring, understanding and adapting to the political environment is absolutely essential for any business, because it significantly affects every business, some of the factors are 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 Furthermore, political context can change for the foreseeable future. For example future gov legislation may adversely chocolate
The Political / Legal / Regulatory Environment can be simply described as the laws and regulations that business has to follow in order to make sure the business owners do not get arrested, or have the business fined for noncompliance of some regulation. The Political / Legal / Regulatory environment is often a direct consequence of the political parties in power, which represents the popular opinion of the citizens of the region. If the citizens are, for example, pro-Big Business then probably taxation will be modest and there will not be a lot of stringent rules about environmental considerations.If the citizens are very concerned about safety issues, for example, then there will be a lot of rules and regulations governing things such as transportation safety, which will make it more expensive for some companies that have big shipping costs. The rules and regulations created by the politicians, have significant influence on the cost of running a business and the way it can market products and services - for example in India there are severe regulations about advertising for alcohol and tobacco.
The political environment of business is one that deals with the concepts of politics and the way they influence how business operate. Its key to understand laws are the outcome of the political process, therefore they are fundamentally a core issue concerning business managers. Specific strategies for managers can take are having a proactive approach (one that improves performance in an industry and avoids political attacks and government intervention). Businesses also need to focus on the areas of financing, lobbying, and building. Lastly, never forget that more and more there is continued personal and legal accountability for managers in the fall out of Enron and the global recession of 2008-present.
As for small businesses this environment is the same as a larger company, except small businesses tend to have smaller and less lobbying power. In this cases small businesses should seek to build in their industries and build PAC's if possible.
The impact on smaller can be quite large and even more impactful then larger The reason for this is the smaller they have less power in the political process, unless they coalition build and configure a reasonable lobbying strategy.
The business environment consists of political and legal barriers that affect the activities of the business organization. Political and legal environment means a certain set of rules and regulations that are rigid, and a business organization has to follow in order to establish its business organization. These rules and regulations are developed by the government and judiciary of the country, and a business organization must abide by these rules. If the organization fails to obey the land rules, it may have to face consequences such as the dissolution of the business firm or may have to pay heavy fines.
The political legal environment is a threat because regulations can hurt a business. It is also an opportunity because regulations can improve a business' position in the market.
PEST
Every business is affected. The bigger the business, the greater the influence. For any business of significant size, regulatory and legal issues are the most important factor in determining survival and profitability.
1. Economic environment 2. Technological environment 3. Cultural environment 4. Political environment 5. Legal environment 6. Natural environment 7. Internal environment
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These include customers,competitors, suppliers, government, and the social, political, legal and technological factors etc.
A 'political legal environment' is the system of government instituted by each country's central government. Think of the differences between the US-UK-German governments; all are democracies, but their governments are elected, govern, and are replaced in different ways.
* Describe the basic environments (legal, social, economic) in which a business operates.
There are more than four elements of the international business environment. Some of them are economic development, monetary and fiscal policies, the legal environment, and cultural concerns. Others include the political environment, and ecological issues.
The legal environment is important to business so that a business runs smoothly. If a business, especially a large one, has no legal department, they are much more open to problems.
Political environment is where the government bodies intervene in situations where society does not adhere to the governmental Acts, so therefore politically there always have to be some form of governance.