Political environment can affect a business either positively or negatively depending on the prevailing situation in a country.

It mainly forms the external factors which are part of the macroenvironment and whose control is beyond the ability of human beings.

These factors touch on the way politics are conducted in a country, which directly reflects on what is happening within the government. This means that a democratic country will accord freedom to its people to vote in a government that has their interests at heart thus business will thrive owing to the good policies implemented.

On the other hand, a dictatorial government will not earn the respect of its citizens leading to economic as well as political instability and uncertainty. Even though such a government will go, businesses suffer a lot since they are not sure of their future underlining the importance of a democratic government to a country and business.

It is needless to say, that once a country is stable, more investment opportunities will be realised thus attracting more and more investors. This will reflect positively and directly to the local businesses, as even the citizens will have full confidence with them.

In the politics of the day, business success depends on politics by a great percentage and in many ways. Politicians are usually the people controlling the operations of a government and will decide which countries to trade with as well as the trading conditions.

This means that if a certain business or its owners are not in good terms with the politicians then they will have to suffer. Furthermore, the rules that govern and regulate the manner in which trade is conducted are enacted by the politicians thus it will call for good relations between stakeholders in the business sector and politicians even if it's impossible just for success.
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