Sample Essay on Political Factors Affecting Business

Political Factors Affecting Business

Running a business comfortably depends on a number of factors including political environment in a country. Therefore, as a business person, it is imperative to understand your political environment. It enables you to adapt to it and run your operations smoothly and successfully. This is because political environment can determine whether you will run your business successfully or not.

Government stability

The state of the government is very important for any business. A government that is stable creates a favorable environment for businesses. What’s more, it builds confidence in existing and potential investors. Without confidence that a business will grow based on a governments political status, investors and business persons will shun off.

Government system

The type of government in a specific country plays a crucial role in determining the prevailing business environment. A government based on dictatorship cripples many businesses. A democratic government allows business persons to run their operations smoothly and profitably. Additionally a monarchial government is known to create a favorable business environment for all.

Therefore, before establishing any form of business, it is imperative to understand the type of government in place. This enables you to take appropriate measures and establish a business in an environment that will allow for its growth and success.

Economic policy of the government

The government uses economic and trade policies to control trade and to promote economic growth. However, there are policies that favor businesses and there are those that do not. For this reason, it is essential to understand government policies in place and determine whether it favors the business you are running or note.

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Trade policy

Trade policy is one of the factors that also play a crucial role in determining the success of a business. A government that allows free trade enables many businesses to grow. However, a government that imposes restrictive policies prevents growth of businesses.


Politics also affects businesses. A stable political environment is known to create a favorable environment for different types of businesses and vice versa.

Political groups can also influence the government to allow for establishment of certain businesses or cripple them. Therefore, before establishing or when running a business, it is imperative to consider the role of politics in the location. This will enable you to employ necessary strategies to cushion your business from political influences.

Diplomatic events

Diplomatic events in a country also play a crucial role in determining the success or downfall of a business. There are diplomatic events that promote businesses especially in developing countries. The events also can change the current and future trends of a business.

Government legislation

Government legislation also affects businesses. It can create rules and regulations that promote specific businesses. In other cases, the legislations can prevent specific business for special reasons or consumer interests.

Therefore as a business person or a potential entrepreneur, it is essential to consider these factors before and when running a business. It will enable you to make wise and informed decisions at all times. What’s more, understanding these factors enable you to adapt well to your business environment and run your operations without any form of interference.

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