Politics refers to the competition of methods and ideas around the decision-making process within an organizational structure. Although the term can be applied precisely to situations such as office politics or social group politics, it usually refers to decision-making and legislation at the governmental level. This state of competition between voters and decision-makers has a number of advantages, but is not without drawbacks. These factors mainly concern the impact of the environment and the influence of ecological aspects. These include waste disposal laws, environmental protection laws, energy consumption regulations. Everything has both sides, just like a PESTLE analysis. Let`s look at both the pros and cons. The same applies to the importation of illegal substances, which can also be prevented by appropriate laws and regulations. The political situation of a country influences its economic environment. The economic environment influences the development of enterprises.
In a dominant environment with no competing political factions, the ruling party simply does what it wants. While this can be effective, it means that sections of the population that disagree with the way the government governs have no legal recourse within the system of government. Dissenting political parties force compromise on government issues through a peaceful process of government. By providing a place for political competition within government, it prevents citizens from having no alternative to government ideas with which they disagree, but potentially violent competition outside government. According to Wikipedia, the term political correctness implies “language, ideas, policies, and behavior.” In this blog, we will discuss the same tool. We will discuss everything related to PESTLE analysis. What does that mean? What are these different factors? How do I perform a PESTLE analysis? What are its advantages and disadvantages? What is it used for? Since we live in a “global village”, everything that happens around us has an impact on us. The same goes for an organization.
In general, in marketing theory, we separate a micro and macroeconomic business environment, where the microenvironment is mainly the internal factors that influence a particular industry, including the stakeholders and competitors of a particular company, and the macro environment are the external factors that influence a company, factors that it cannot control. Changes in government policy are the political factors. Change can be economic, legal or social. It could also be a mixture of these factors. Below is a list of political factors impacting businesses: The political environment is perhaps one of the least predictable elements of the business environment. A cyclical political environment develops as democratic governments seek re-election every few years. This external element of the business includes stakeholder impact. Interest groups tend to change government policy.
An example of this is his membership in the Clinton administration`s apparel industry partnership in 1997. Nike appreciated the changes in political factors in many ways. However, political pressure has had a negative impact on Nike`s employment practices. Companies may view certain environmental laws in a negative light if they have to adjust their practices and increase spending to comply with regulations. Individuals may also feel bothered by certain laws, such as a new law against fishing in a favorite place. Conducting a cost-benefit analysis of environmental laws is often difficult, as the negative impacts of non-enforcement – such as death, disease and destruction of ecosystems – cannot always be easily quantified in monetary terms. (See footnote 2) However, becoming more environmentally friendly can save businesses and individuals money in the long run, including reducing waste and energy consumption, despite the cost of the initial investment. Not only do internal affairs decide the fate of a company, but many external factors also have the same effect. A country`s political situation, technological developments, environmental factors, legality of actions, economic and social factors all play an important role. Companies are aware of this fact, so they use an economic tool – PESTLE analysis. Political risk insurance is one way to manage political risk.
Companies operating internationally use such insurance to reduce their risk exposure. Benefit-cost analysis, despite its limitations, is the best tool for understanding regulatory consequences and ensuring that regulations provide social benefits that outweigh their social costs.29 There has long been a bipartisan consensus on this point: every president since Ronald Reagan has issued an executive order requiring regulators to conduct a benefit-cost analysis. As the Clinton administration said, the same is true for the importation of illicit substances, which can also be prevented by introducing appropriate laws and regulations. It is therefore important that policymakers design these regulatory frameworks in such a way as to ensure maximum benefits for the public while minimising the negative impact of these rules. I am not sure that this question would elicit a different answer in terms of benefits. The political environment can affect business organizations in several ways. This could add a risk factor and result in a significant loss. They need to understand that political factors have the power to change outcomes. It can also have an impact on government policies at the local and federal levels. Companies must be prepared to deal with the local and international results of the policy. Stricter environmental laws tend to encourage innovative environmentally friendly technologies, writes Frank Wijen in “A Handbook of Globalization and Environmental Policy.” (See footnote 5, page 216) The demand for sustainable technologies is increasing as businesses and individuals have to comply with stricter environmental regulations, prompting clean energy researchers and entrepreneurs to focus on developing such technologies.
Ultimately, this increases the importance of sustainable technologies and makes them more accessible. Environmental laws protect the health and safety of people and the environment. For example, the Clean Air Act limits pollutant emissions, and the Marine Protection, Research and Sanctuaries Act prohibits dumping waste into U.S. marine waters without a permit. (See references 1 and 4) Without such laws, businesses and individuals would be able to do what works best for them or what is most profitable for them, rather than acting in the interests of society and the environment. In addition, there are also regulations in the economy and in all kinds of political systems. Raising or reducing taxes could be an example of a political element. Your government could raise taxes for some businesses and cut them for others. The decision has a direct impact on your business.
So you should always keep abreast of these political factors. Government interventions such as changes in interest rates can have an impact on the demand behaviour of businesses. Companies should monitor their political environment. Changes in political factors can affect the company`s strategy for the following reasons: In addition, governments could also set maximum levels of pollution, which would benefit our environment in a variety of ways. For example, an aggressive takeover could topple a government.
