How do political and economic systems of different countries affect your company business and the strategies they use to operate effectively with these different systems?
Impact of External Environment on the business
There are many environmental factors that affect our business. The management needs to analyze these factors and makes the better decision for the organization.
The external environment includes political, economic, social, technological, Environmental, and Legal Factors.
Answer and Explanation:
Impact of Political and Economic system on the business:
- Policial environment brings risk to the business. The government policies including increase or decrease in tax impact the business organization.
- Political factors that affect a business are tariffs, trade control, regulation, and deregulation, corruption, tax policy, etc.
- The political Situation affects the economy and the economy affects the business firms.
- Government interventions in the form of foreign trade policy, tax poly, and trade restrictions affect the business houses.
- Economic factors like economic growth, interest rates, exchange rates, inflation, disposable income have a significant impact on how the business organization is doing its business.
- Both micro and macroeconomic factors impact the business organization.
Learn more about this topic:
fromChapter 14 / Lesson 11
Laws attempt to create fairness and a sense of predictability so that people know what is morally right and how to act in society lawfully. Learn more about how legal factors affect business and their types.