Political Environment

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Definition: Political Environment

Political Environment is the state, government and its institutions and legislations and the public and private stakeholders who operate and interact with or influence the system. The political atmosphere should be good and very stable for a firm to operate successfully. Political Environment forms the basis of business environment in a country. If the policies of government are stable and better then businesses would get impacted in a positive way and vice versa.

Changes in government often results in changes in policy.

Example: -

  • The policies made by the government have a significant impact on any company’s international market
  • Also the tax rates decided by the government impact the firms in different ways
  • Promotion of self-business by the government

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