Essay Example on Political Environment

Date:  2021-07-02 23:10:02
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What is the political environment?

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According to Dahl (1976), is a system of governance by a body of systems composed of the public and private stakeholders who form a government which is mandated to formulate legislations and policies of a country. The political environment represents the actions by the government which has an influence on the operations of a company or business. The political atmosphere encompasses the political culture which is characterized by widely held views, beliefs, and attitudes concerning what governments ought to try to do and how they ought to operate as well as the relationship between the citizens and the governments.

Why does it matter for policy makers and business advisors to understand the political environment?

There is need to understand the political system as it directly appeals to the local market. Through government actions. Notably enough, the government is the primary consumer of goods and services (Pandey & Wright, 2006). Businesspersons are interested in evaluating the means by which change in government policies and legislations affect their business operations. Political factors always take preeminence. Managers assess political factors with the aim of taking advantage of the opportunities that arise. Additionally, business enterprises, as well as investors, are keen to follow the political environment for the purpose of ascertaining how federal government actions will impact business operations as well as the organization at large (Kuklinski, Quirk, Jerit & Rich, 2001). Nike Company, for example, has earned massive profits out of investment in growth-oriented policies advanced by the US government.

When the political environment and the government are stable, the mental health policy, as well as other policies, are influenced as well as the time frame with which other programs are developed and realized. A hostile takeover, for example, could overthrow the government resulting in riots, looting, civil wars as well as the general disorder in the environment.

According to Noble & Irwin, (2009), the political process is indispensable when it comes to policy development, implementation as well reforms. The government has a public duty of protecting the public interest.It is impossible to talk about politics without mentioning reforms. Policy changes are aimed at redistributing resources among the nationals in the society (Pandey & Wright, 2006). Given the fact that decision makers might not be in a position to address the political environment in a mental health system, it is paramount that the political atmosphere in which a mental health plan is to be formulated and implemented is critically taken into consideration if at all policy implementation and reform is to be made a success.

How does it stimulate business enterprise?

The political environment has the potential of affecting business organizations in diverse ways. Through enactment of policies by the government, the political climate can either introduce risk, profit or cause a major throwback to the business enterprise. Change in the government policies is the basis of political factors which significantly influence the business environment. Nevertheless, the political context has an incentive to stimulate and spike growth of business enterprises (Dahl, 1976). A decrease in the corporate tax, for example, is a great incentive to business operations since it relieves businesses from the burden of paying high taxes out of profits or retained earnings. A reduction in tax by 5 percent, for example, will increase business income which can afterward be invested or plowed back by the firm thereby bringing growth to the industry and the nation at large.

The political environment through actions by the government can significantly influence business activities through the imposition of tariffs, import duties, regulations as well as trade permits acquisition (Kuklinski, Quirk, Jerit & Rich, 2001). Federal actions affect the price level of goods and services in the country whereby a subsidy in the prices of inputs as well as the increase in the sale price of final outputs can stimulate business enterprises. When inputs and raw materials are available and affordable to the business people, they can invest in production which produces an output which when traded brings about growth and development.


Dahl (1976). Modern political analysis. Englewood Cliffs, N.J. : Prentice-Hall.

Kuklinski, J. H., Quirk, P. J., Jerit, J., & Rich, R. F. (2001). The political environment and citizen competence. American Journal of Political Science, 410-424.

Noble, C., & Irwin, J. (2009). Social work supervision an exploration of the current challenges in a rapidly changing social, economic and political environment. Journal of Social Work, 9(3), 345-358.

Pandey, S. K., & Wright, B. E. (2006). Connecting the dots in public management: Political environment, organizational goal ambiguity, and the public manager's role ambiguity. Journal of Public Administration Research and Theory, 16(4), 511-532.

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