Assess the Impact of a Political Environment on International Business Essay

Assess the Impact of a Political Environment on International Business - Essay ExampleThe significance of politics is practically more in international traffic because the policy-making system varies from country to country.Purpose of the study According to (Batler 1998), a business entity should always take into news report political risk because it is directly related to the investment, cost, tax structure and the return from that country. Keillor et al (2005) also have similar opinion. They admitted politics as a little terror to international operation.Background of the study A look study on Bangaladesh, a developing country can be cited here. The World Bank has forecasted the gross domestic product growth of Bangladesh at 5.7 percent for the fiscal year 2014.This is way below the growth forecast 7.2 percent, done by the Bangladesh government itself. According to World Bank, the reasons stooge the slower growth are political unrest, remittance crisis and problem in garment s sector. Remittance is a political issue and garments is outsourced business, so again a political issue)1. General political uncertainty Though the normal political instability is not considered as a serious problem but if the uncertainty increases it harms the business growth. Giving the example of Africa Frynas (1998) mentioned that, political instability of Africa is the main barrier for economic development.2. Ownership risk If the government takes over a private business or goes for expropriation then the private owners might lose its ownership. These situations are termed as nationalization or protectionism of business.3. Operational Risk Government policies of the country where the business is operating matters a lot. The availability of finance, cost structure, tax structure, buying of property, human resource strategy, marketing technique everything is dependent on the government policy. Korrin (1979) expressed his concern in the case of political influence in business de cision making process pr planning. In much