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Political Environment[1]


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Published in: Business, Economy & Finance
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Political Environment[1]

  1. 1. Business Environment Political Environment
  2. 2. Political Environment of Business <ul><li>Man is a social animal </li></ul><ul><li>Therefore, Social groupings form the essence of a political grouping. </li></ul><ul><li>Politics by definition is “Social relations involving authority or power” </li></ul>
  3. 3. Accountability and Politics <ul><li>Ideally, all are politically equal. But that does not exist in reality. </li></ul><ul><li>Policy Makers are stronger than the people. </li></ul><ul><li>Providers Lobby is more powerful than the policy makers. </li></ul>Policy Makers Providers People
  4. 4. Anatomy of Corruption Political Enterprise Level Petty Level
  5. 5. Effect of Politics on Business Environment <ul><li>Politics directly affects the Business Ethics </li></ul><ul><li>The framework of politics determines the function of the business environment. </li></ul><ul><li>A typical bureaucratic political system: Long process to start business. No empowerment to people or business. Loss Making companies etc. </li></ul><ul><li>An efficient Government on the other hand ensures economic development. </li></ul>
  6. 6. Business Ethics <ul><li>Any injustice results in creation of law. </li></ul><ul><li>The law lays the foundation of customs. </li></ul><ul><li>If a business can bypass the law due to the political structure, then customs/morality would not exist. </li></ul>Injustice Law Ethics Morality Customs
  7. 7. Corporate Social Responsibility Customers Government Employees Suppliers Society Shareholders Company
  8. 8. Principles of Social Responsibility in Business Yourself Law Shareholder Employees 1 2 Local Community Ad Agency Suppliers Auditors
  9. 9. Examples of Politics affecting Businesses <ul><li>Recent Scams that have arisen due to the political system </li></ul><ul><li>Telgi Scam: 30,000 crore rupees that could have been introduced in economy disappeared. </li></ul><ul><li>CAT Paper scam: Many well prepared next generation minds were deterred from achieving their goals. </li></ul><ul><li>Ketan Parekh, Harshad Mehta scams: 1000’s of crores of investors money lost in stock market. </li></ul><ul><li>Bofors/Fodder – thousands of crores of development money swindled. </li></ul><ul><li>Best Bakery: Business confidence/FDI in Gujarat has been shaken due to this event. </li></ul>
  10. 10. Conclusion <ul><li>Politics defines the business environment. </li></ul><ul><li>They form the foundation of Ethics and CSR </li></ul><ul><li>The economic environment of the economy can flourish on more empowerment given to the people. </li></ul><ul><li>The greater good can be balanced efficiently. </li></ul>