BUSINESS ENVIRONMENT

Chapter 5
POLITICAL AND
GOVERNMENT
ENVIRONMENT
 Chapter 5
Political And Government
Environment

 The political environment includes factors such as the characteristics

and policies of the political parties, the nature of the Constitution and
government system and the government environment encompassing
the economic and business policies and regulations. These factors
may vary very considerably between different nations, between
different provinces of the same nation and also over time.

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 5
Political And Government
Environment

Functions of State
 In most modern economies the state’s regulatory role is now
broader and more complex than ever before, covering such areas as
the environment and the financial sector, as well as more traditional
areas such as monopolies. The design of regulation needs to fit the
capability of state regulatory agencies and the sophistication of
markets, and give greater emphasis to personal responsibility.

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 5
Political And Government
Environment

Functions of the State (Adopted from World Bank, World

Development Report, 1997)

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 5
Political And Government
Environment

Table: Impact of State

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 5
Political And Government
Environment

The Constitutional Environment

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 5
Political And Government
Environment

Business Environment
Himalaya Publishing House Francis Cherunilam