How Business is Affected by Politics?

A business like Gilbert plumbing is affected by countless of external factors. For managers, it’s part of their job to review each on a microscopic level. The goal is to lead the business or company to the best decisions resulting for continuous progress and growth. On a business standpoint, being able to enumerate these factors affecting their operation is crucial.

All You Need is 4 Letters

Fortunately, these are easy to recall. You just need to remember PEST analysis. PEST is an abbreviation for Political, Economic, Social and Technological analysis. Furthermore, commercial establishments and investors are studying legal, demographical, ethical and environmental factors.


But among these factors, political factor receives the most attention. There are varying aspects of policies set by the government that if taken for granted, will negatively affect a business’ performance. All firms should abide by the law. Managers, on the other hand, ought to find out how upcoming and recently passed legislation will affect their operations and activities.

Political environment may bring a huge impact to the business in all directions. It may add risk factor and even result to major loss. It is critical to understand that political factors have the capability of changing the results. It can influence government policies starting from local to the federal level. In regards to this, companies should always be prepared and ready to handle both local and international outcome of politics.

Any changes made in government policy make up these political factors. These changes can be anything from social, legal or economic.

Perhaps, political environment is an unsurprising element in the corporate world. Cyclical political environment will likely develop as democratic governments need to pursue reelection every few years. Corruption is a massive wall to the development of any economy. Of course, there are firms that are benefiting from it by bribing government officials to do it their way.

What Hindrance Success?

If this won’t be stopped, it can bring chaos to the business’ operations. Below is just a short list of how corruption is committed by the people in power in the government:

  • Corruption level
  • Freedom of the press
  • Tariffs
  • Data protection law
  • Health and safety law
  • Regulation and deregulation
  • Tax policy (tax rates and incentives)
  • Government stability and related changes
  • Government involvement in trade unions and agreements
  • Intellectual property law (Copyright, patents)

These are few of the things that Gilbert plumbing and other businesses in their respective industry are fighting.

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