The document discusses several political factors that can affect business, including corruption, trade controls, bureaucracy, and changes in laws/regulations. It notes that political instability can negatively impact investment and economic growth by creating uncertainty. Political instability arises from issues like disrespecting citizens' rights, corruption, unfair elections, unemployment, suppression of opposition, and leaders holding onto power for too long. Businesses should monitor the political environment because changes can influence strategy through impacts on markets, regulations, and the overall economic situation.

1. POLITICAL FACTORS AFFECTING
BUSINESS
Issues in Contemporary Business

2. GROUP MEMBERS
Maryam Fayyaz
Neelam Javed
Tehmina Kouser
Saiqa Ramzan
Memoona Maqsood
Sana Shehzadi
MC15236
MC15201
MC15205
MC15033
MC15218
MC15236

3. CONTENTS
Contemporary Business issues
External factors affecting business
The importance of observing the political environment
Political environment effects
political factors affecting business
Political instability
Political instability and economic growth
Causes of political instability

4. CONTEMPORARY BUSINESS ISSUES
A contemporary business issue can be defined as any event, idea, opinion or
topic affecting business that is relevant to the present day.
For example
 Political factors
 Environment
 CSR
 Child labour
 Energy crisis etc.

5. EXTERNAL FACTORS AFFECTING BUSINESS
There are many external factors that can affect your business. The aim
is always to take better decisions for the firm’s progress. Some
common factors are political, economic, social and technological
(known as PEST Analysis).

6. Business Decisions
Social
Factors
Economic
Factors
Technologic
al Factors
Political
Factors
Demograph
ic Factors
Legal
Factors

7. THE IMPORTANCE OF OBSERVING THE
POLITICAL ENVIRONMENT
Firms should track their political environment. Change in the political
factors can affect business strategy because of the following reasons:
The stability of a political system can affect the appeal of a particular
local market.
Governments view business organizations as a critical vehicle for social
reform.
Governments pass legislation, which impacts the relationship between the
firm and its customers, suppliers, and other companies.
The government is liable for protecting the public interest.
Government actions influence the economic environment.
Government is a major consumer of goods and services.

8. POLITICAL ENVIRONMENT EFFECTS
Political decisions affect the economic environment.
Political decisions influence the country’s socio-cultural
environment.
Politicians can influence the rate of emergence of new technologies.
Politicians can influence acceptance of new technologies.

9. POLITICAL FACTORS AFFECTING BUSINESS
 Corruption level
 Trade control
 Bureaucracy
 Tariffs
 Freedom of the press
 Competition regulation
 Regulation and deregulation
 Education law
 Discrimination law
 Antitrust law
 Employment law
 Health and safety law
 Environmental law
 Tax policy
 Government stability and changes
 Government participation in trade unions
 Import limitations on quantity and quality
of the product
 Legislation that manages environment
pollution
 Consumer e-commerce and protection
 Intellectual property law
 Data protection law

10. EFFECTS OF POLITICAL FACTORS ON BUSINESSES
Government changes in their rules and regulations could have an
impact on business.
The political condition of a country affects its commercial setting.
The economic environment affects the business presentation.
The absence of political stability affects business operations, most
especially for those companies who operate internationally.
Obtaining political risk insurance is a method to manage political
risk. Firms that have international operations uses this kind of
protection to decrease exposure to risk.

11. POLITICAL INSTABILITY
Political instability is a situation where by a country is currently
going through political turmoil.in many cases the country
deteriorate in terms of its economic progress
Political instability is when there is unconstitutionally changed of
government. it can be regular or irregular change of government

12. POLITICAL INSTABILITY AND ECONOMIC
GROWTH
On the one hand, the uncertainty associated with an unstable political
environment may reduce investment and the speed of economic
development. On the other hand, poor economic performance may
lead to government collapse and political unrest.

13. CAUSES OF POLITICAL INSTABILITY
Rights and freedoms of the people are not
respected
Corruption and mismanagement of the
wealth of a country by the leaders.
When elections are not free and fair
Mass unemployment and poverty can
easily trigger political instability in any
country.
Suppression of opposition parties by the
ruling government.
The government decides not to be open
and transparent.

14. CONTINUED
Intolerance for the views and opinions of others
High level of prejudice in a country
Holding on to power for too long by heads of states