How does Political factors affecting international business?

Answer 1

HOW DOES THE POLITICS AFFECT BUSINESS IN SOUTH AFRICA

The political system affects all organisations and determines the context within which businesses operate. Deregulation and privatisation have created more competition and a need for new bodies to oversee the affected industries. Central government and local authorites are major employers; in many towns they are the biggest employers. A change in policy can have major effects on the local economy and on the firms that serve it, for example ending a defence contract or closing a military base.

Pressure groups exist to influence government and politicians. Their activities can also have a major impact on industries and individual firms, for example the attempt by animal rights activists to prevent live exports of cattle. Government departments frequently consult pressure groups about new regulations and legislation. Business have to be prepared to deal with the effects of pressure group campaigns and to counter Propaganda.

The national political environment must be seen more and more as part of a wider international context. An example can be seen in the European Union, which often has more a different political bias from that of its member countries. Obligations under international treaties must also be met, such as compliance with trade rules.

Note that there are numerous different influences on any business, most importantly PESTEL, which is the Political, Economic, Social, Technological, Ecological and Legal environments.

Answer 2

Political aspects effect international business because what is going on politically will determine if one is able to do business with companies overseas or not. Many of the time there are cultural differences and if we are in poor political standing with a country then those trying to do business will suffer until issues are resolved between dignitaries.

Answer 3

Business and politics affect each other in a 'chicken & egg' relationship. Politicians need healthy economies with happy voters to get elected and re-elected, while business needs a stable town-state-country regulated by rule of law in order to have their best chance to turn a profit.

Answer 4

Political factors often come into play in the field of international business. For example, tensions between the United States and Cuba have long affected trade between the two nations.