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Political Environment in International Business Essay on presentation prepared for International Business Environment seminar 14 December 2001 The critical concern Political environment has a very important impact on every business operation no matter what its size its area of operation Whether the company is domestic national international large or small political factors of the country it is located in will have an impact on it And the most crucial and unavoidable realities of international business are that both host and home governments are integral partners Reflected in its policies and attitudes toward business are a governments idea of how best to promote the national interest considering its own resources and political philosophy A government controls and restricts a companys activities by encouraging and offering support or by discouraging and banning or restricting its activities depending on the government International law recognizes the right of nations to grant or withhold permission to do business within its political boundaries and control its citizens when it comes to conducting business Thus political environment of countries is a critical concern for the international marketer and he should examine the salient features of political features of global markets they plan to enter THE SOVEREIGNTY OF NATIONS From the international laws point of view a sovereign state is independent and free from external control enjoys full legal equality governs its own territory selects its own political social economic systems and has the power to enter into agreements with other nations It is extension of national laws beyond a countrys borders that much of the conflict in international business arises Nations can and do edit specific aspects of their sovereign rights in order to coexist with other countries Like the European Union North American Free Trade Agreement NAFTA are examples of nations voluntarily agreeing
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