There are many factors that can make an impact on your business. Managers usually carefully evaluate each factor. Our goal is always to make better decisions for the company’s development. Some common factors are politics, economy, society, and technology (pest analysis).
Regardless if you are in the retail industry selling sanders online, your business will feel the effect of abrupt decisions on trade and commerce. It’s a domino effect.
The political factors that affect a business are usually very important. Several aspects of government policy can affect your business. All companies must obey the law. Managers need to find out how upcoming regulations affect their activities.
PESTEL analysis Political factors
The political environment can affect business organizations in many ways. It increases risk factors and may cause huge losses. It should be understood that political factors have the power to change results. It may also affect the federal government policies of the province. Companies must be prepared to respond to political results at home and abroad.
Changes in government policy are an integral part of politics. Changes can be economic, legal, or social. These elements may also be mixed together.
Increasing or decreasing taxes may be an example of political factors. The government can raise taxes for some companies and lower taxes for others.
Political decisions can directly affect your business. Therefore, you should always understand these political factors. Government intervention (such as changing interest rates) may affect the company’s demand patterns.
Some elements create cross-links in several ways. Some examples are:
- Political decisions affect the economic environment.
- Political decision-making affects the country’s social and cultural environment.
- Politicians affect the rate at which new technologies are introduced.
- Politicians can influence the acceptance of new technologies.
The political environment may be one of the most unpredictable factors in the business environment. The cyclical political environment develops because democratic governments must be re-elected every few years. The external business elements include the influence of stress groups. Pressure groups tend to change government policies.
Different regions have different political systems and therefore different political influences. The country’s demographically democratic open government system. In a totalitarian system, government power comes from certain groups.
Corruption is an obstacle to economic development in many countries. Some companies survive and grow by bribing government officials. The success and growth of these companies is not based on the value they provide to consumers.