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How to Political Environment and its Component can impact You Business

Today, we are going to study the Political environment and components of the Political environment. Let’s start with the Introduction of the Political environment.

Introduction to the Political environment.

Political Environment refers to the influence of government institutions, strategies of political parties, policies of state and local government and the relationship between government and business. Political Environment is the component of the Business Environment so if you do not know about the business environment Please read. Here is the link to Business Environment. Lets back to our Topic. Managers must know about the political environment because:

  • It imposes certain legal constraints on the business.
  • It establishes a market atmosphere that maybe pro-business or anti-business.
  • It has the potential to provide the stability needed for long-term planning.

For a systematic study of the political system, a business firm should, first of all, analyze the national constitution, major political parties, form or structure of government, the mechanisms designed to guide a transition of power from one leader to the next, key power blocks, and the extent of popular support.

Let’s talk about the Components of Political environment.

Components of Political Environments

  • Political Ideologies
  • Constitution
  • Political Parties
  • Government and Its Branches

Political Ideologies

They refer to the set of ideas ‚ principles and philosophy which are concerned with the allocation of power and offer political and cultural outlook. The major political ideologies are democratic and totalitarian.

  1. Democratic: The political ideology under which the nation is governed by the people representatives. The power lies in the hand of people. There is always the freedom to speak, political rights, civil liberties. Besides, there is the existence of multiparty and private sectors has a greater role in the national economy.
  2. Totalitarian: Totalitarian is an ideology under which total power is vested in a single person, or a group or a government. Totalitarianism aims at regulating all aspects of public and private life. Freedom, political rights and civil liberties are restricted. Only one party system exists.

Constitution

It is a fundamental guideline or law under nation functions. It affects the development of business in the country directly. The major directive principles stated by the constitution are:

  • The political objective of the state is to establish a federal democratic republican system to ensure the use of democratic rights by keeping sovereignty‚ independence and integrity at the highest level.
  • The socio-culture objective of the state is to end all forms of discrimination ‚ exploitation and injustice based on religion‚ culture‚ custom‚ tradition and usage by respecting cultural diversity.
  • The economic objective so the state is to develop sustainably through equitable distribution of resources and promote the participation of the public cooperative and private sectors.
  • The international relations of the state are directed towards enhancing the dignity of the nation in the international arena.

Political Parties

Political parties are the building blocks of a democratic system. They act as representatives of people and address their problems. Through legislation‚ they attempt to form a government and rule the nation according to their ideology and policies.

Government and Its Branches

  1. Legislative: Legislative is formed by the representative of people. It is also called a parliament. Its main responsibility is the formulation and enactment of the law. According to constitution ‚the legislature is divided into three levels:
    1. Federal Legislature: It is the legislature at the central level.  It consists of the houses‚ namely the House of Representatives and the National Assembly.
    2. State Legislature: Each state has legislation called state assembly. Unlike federal legislation‚ it has a single house.
    3. Local Legislature: The legislative rights at local levels are entrusted to the village council and municipal council. They can make laws according to state laws.
  2. Executive: It refers to the organ of the state that is responsible for the overall administration of the nation. It is composed of the government and its organs as bureaucracy‚ army‚ police etc. According to constitution ‚the executive consists of the following:
    1. Federal Government: It is the central government. The form of governance will be a multiparty competitive federal democratic republican parliamentary system based on pluralism. The Council of Ministers led by the Prime Minister has the executive power of Nepal. It is responsible for issuing general directives ‚controlling and regulating the administration.
    2. State government: The executive power of the state shall be inherent in the council of ministers of the state led by the chief minister.
    3. Local government: Village council and municipality and district assembly will remain under the local government.
  3. Judiciary: It refers to the court of law. It is responsible for settling disputes and interpreting the rules and laws if required. It serves as the watchdog of law and constitution. According to the new constitution‚ the judiciary of Nepal is divided into four levels:
    • Supreme Court: Supreme Court is an apex court in the judicial hierarchy. It may inspect‚ supervise and give directives to its subordinates courts and other judicial institutions.
    • High Court: There shall be one High court in each state.
    • District Court: There shall be one district court in each district. It has jurisdiction over local level cases.
    • Specialized courts: They are established for the purpose of hearing special types of cases. They may be judicial bodies or tribunals.

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