Political Environment

1. Political Environment

2. INTRODUCTION • The fact is that it is politics that determines economic and business policies, highlights the critical importance of the political environment to business. The political environment refers to those factors & condition in political arena that effect the business decision. For the development of business in the country it is very important to have stable, honest, Efficient & dynamic political system .

3. MEANING • A stable yet dynamic political environment is essential for the growth of business. Political environment provides a framework within which the business is to function and its existence depends upon the success with which it can face various challenges. Political environment mainly include Political ideology towards business, stability, Relation of government, Form of government. There are some factors which may cause political instability: • Civil war • Declaration of emergency in the country • Changes in the form or structure of Administration

4. Democratic & Totalitarianism • Democratic:- • Pure • Republic • Totalitarianism • Theocratic • Secular • Tribal

5. Political Institutions • Under the democratic set as in our country, the political environment consist of three institutions i.e. • Legislature • Execution • Judiciary

6. The main powers vested with legislature are: • Policy making • Law making • Approval of budgets • Executive control • To act as a mirror of public opinion

7. Execution • Government is the Executory body of law framed by legislation. • The role of government is to direct and control the business. Indian constitution provides for a federal setup with powers being divided between central and state governments. The powers and functions of central and state government are described in the constitution.

8. Judiciary • It sees that the exercise of authority by the executives is according to the general rules laid down by the legislature. Judiciary have the power to settle the disputes among employer and employees.

9. State intervention: • Govt. does not interfere in commerce &industry, the role of govt. was just to maintain law & order. But due to market fluctuations ,unfair trade practices and the great depression in 1929, govt. realize the need of state intervention in economic activities.

10. Reason for Govt. intervention • Balanced Growth • Maintenance of law • Future development of Industry • Failure of markets

11. Relationship between business and government

12. Relationship Between Business And Government • The relationship between government and business is complex, with both positive and negative aspects in terms of what can be called the "public good." To make things even more complex, notions of the public good change depending on a person's ideology. • Responsibilities of business towards government- • Responsibilities of government towards business

13. Responsibilities of Business Towards Government • Pay Taxes • Follow Environmental Regulations • To Provide information • Voluntary Programme • Abide By Labor Laws • Avoid Restrictive Trade Practices • Financial Disclosure • Avoid Corruption

14. Responsibilities of Government Towards Business • Government is the most powerful and sovereign authority in the country. It can do or undo anything. The government can use that power to regulate and to stimulate business.

15. Responsibilities of Government Towards Business • To pass and execute proper laws • Maintenance of law and order • Providing Money and Credit  • Building Infrastructure • Basic Research • Protections from Foreign Competition • Provision of Information

16. THANK YOU