THE POLITICAL ENVIRONMENT Flashcards
What is the political environment
The decisions and actions that are taken in relation to the governance of a sovereign nation. In other words: The decisions and actions that are taken in order to govern a nation.
This is a way of identifying what: strengths, weaknesses opportunities and treats a business has
What are Different government policies that can have an impact on businesses:
Education and training
Transport policies
Health policies
What is education and training
Education & Training - Impact on workforce skills and international competitiveness - Most developed economies will provide some sort of education for their people - This will impact businesses by workfull skills and international competitiveness - The more trained a workforce is, the more attractive the company is for FDI, better products/ services will be created, the less businesses have to spend on training, the better educated the workforce will be, a higher potential for better products from having a highly skilled workforce - Impact on workforce skills and internal competitiveness
What are transport policies
Transport Policies - Road, rail - Transport policies have an impact on costs of production, as you need to be following the regulations to be transporting goods - For example is a new rail way have been made going from a supplier straight to the business selling the products, then that will allow the business to save money, as their will be less manual labour involved. It will also have an impact on mobility of the labour force and customers (is it easy for people to get to you )
What are health policies
Health policies - Will have an impact on the productivity of the workforce. The creation of support industries.
What is public order
Public order - Safety of the community (police, justice system etc). The impact on the night time economy - do people feel safe to do out (for example you own a club, or any evening entertainment businesses)
What is welfare policy
Welfare policy - Benefits for jobless and disabled people etc will have a big impact on the consumers of the business - How much disposable income do people have - For example in Covid the government were paying people grants, and as we were in lockdown, a lot of people started spending more money online. Another example is that some people with disabilities are entitled to a new car every few years via Mobility to help them transport themselves in a safe manner.
What is the importance of political stability
Creates faith in the government’s ability to make reforms and maintain law and order
Allows the public sector to run - education, healthcare, transport network etc.
Usually leads to economic stability
