The Politico-Legal Environment of Business

In this sub-unit, the politico-legal aspects of the business environment are discussed. The government is a political institution. As discussed earlier it also has a social purpose, it enacts and executes social policies and exists with social consent, providing ways and means of maximizing social benefits and minimizing social costs. In other words, the government and its structure and style have a definite impact on business, and is on immense social value.

More so in the modern world, where business of any type and size is affected by the government policies, programmes, and legislation. We see that, very often, depending on the nature of the government at work, businessmen define and reorient their business strategy and tactics.

Quite a few of the government policies are executed through legislations. These legislations enactments, rules and regulations, directives and guidelines, issued by the government, constitute the politico-legal environment of business. For a successful manager it becomes necessary to take stock of the relevant politico-legal environment of business and then capitalize on the opportunities offered by it.