Political Factors That Affect A Business

Impact in the economy

The political nature of a country is crucial for any thriving business venture (Rodriquez, 2009). They usually affect the economic position of the area leading to changes in the business cycle. In the US for example, there are differences that are seen in the operations of the democrats and the republicans. Such changes have occurred due to their different policies and ideologies. With such differences there are different implications that occur in the government arena leading to changes in the business cycle. Policies that encourage high spending in any economy, lead to improved economies and increased business participation.

 Changes in Regulations in the Government

Any change made in the government regulation is recipe for business changes. When the rule of law changes there is usually a change in the economy and this may affect businesses positively or negatively. Corporate compliance has become a rule in the US because of the accounting scandals that have been witnessed in the 21st century. Public companies have been forced by the Oxley-Sarbanes compliance to be more responsible in their acts. Such regulations lead to increased or decreased business operations in the economy as a whole.

Political Stability

Political instability usually affects business operating internationally. This is also true for all local businesses as consumers usually change their way of shopping towards favorable products. Overthrowing a government for example, may lead to looting and other vices that reduce the desire for people to start new ventures in their regions. Most business people operate well in politically stable nations as they are able to operate without any interference.

Mitigation Risks

There are many risks that are encountered in most businesses around the globe. This has been mitigated by various methods like buying insurance policies. Buying insurance policies can assist a business to operate fully and avoid any uncertainties in the event of providing products and services to various players.

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