Definition

The political environment is the state, government and its institutions and legislations and the public and private stakeholders who operate and interact with or influence that system. Government actions which affects the operations of a company or business. These actions may be on local, regional, national or international level. Business owners and managers pay close attention to the political environment to gauge how government actions will affect their company

Elements
Political System Political Industry Political Philosophy Political Risk

Political System
It consists of ideological forces. Political , election procedures and power center .A stable , efficient and honest political system is essential for the growth of organization. Political system in India takes place within the framework of a federal Westminster-style Parliamentary democratic constitutional republic, in which the President of India is head of state and the Prime Minister of India is the head of government. Federal and state elections generally take place within a multi-party system, although this is not enshrined in law.

 For most of the years since independence, the federal government has been guided by the Indian National Congress (INC). The two largest political parties have been the INC and the Bharatiya Janata Party (BJP). Although the two parties have dominated Indian politics, regional parties also exist National political parties:
Party Name Indian National Congress National Congress Party Bharatiya Janata Party Communist Party of India Communist Party of India(Marxist) Bahujan Samaj Party Abbreviation INC NCP BJP CPI CPI(M) BSP Party Leader Sonia Gandhi Sharad Pawar Rajnath Singh Suravaram Sudhakar Reddy Prakash Karat Mayawati

Political Industry
They consists of legislature, executive and judiciary. The legislature enacts laws that guide organizational activities. Legislative power is vested in both the government and the two chambers of the Parliament of India, the Lok Sabha and the Rajya Sabha. The executive implements the decisions of the legislature. It lays down policies , regulations and procedures that influence the of organization. Nominally executive power is exercised by the President and is independent of the legislature. The judiciary service as a watching . Its rulings influence organizational practices. It settles disputes and carries out judicial review. The judiciary is independent of the executive and the legislature, the highest national court being the Supreme Court of India. India is the world's largest democracy in terms of citizenry.

Political Philosophies
The political ideology can be Democratic Totalitarian Mix of both Democracy vests power in the hands of people. Democracy is a form of government in which all eligible citizens have an equal say in the decisions that affect their lives. Democracy allows eligible citizens to participate equally either directly or through elected representativesin the proposal, development, and creation of laws.

 It encompasses social, economic and cultural conditions that enable the free and equal practice of political self-determination. Democracy provides greater role to private sector. Totalitarian vests power in the hands of the state. Totalitarianism (or totalitarian rule) is a political system where the state holds total authority over the society and seeks to control all aspects of public and private life wherever necessary. Totalitarianism provides greater role to state.
Political philosophies influence organization's activities. Mixed philosophies provide roles to both private sectors and state.

 Risk of change in political environment or government policy that would adversely affect a companys ability to operate effectively and profitably . When perceived political risk is high, a country will have a difficult time attracting foreign direct investment.
Situation War Social unrest Business Environment Risk Intelligence World Political Risk Forecasts

Political Risk

Fractionalization of the political spectrum

Fractionalization by language, ethnic, and/or religious groups Restrictive/coercive measures required to retain power Mentality (xenophobia, nationalism, corruption, nepotism)

political turmoil probability

Equity restrictions local operations restrictions Taxation discrimination

Orderly political transfer

Politically motivated violence

Positives
The political environment in which the firm operates (or plan to operate) will have a significant impact on a company's international marketing activities. Bearing in mind that a foreign company operates in a host country at the discretion of the government concerned, the government encourages foreign activities by offering attractive opportunities for investment and trade. A democratic country will accord freedom to its people to vote for a government which has their interests at heart, and thus business will thrive - owing to the good policies the government implements. Nearly all governments today play active roles in their countries' economies More investment opportunities will be realized, thus attracting more and more investors. This will reflect positively and directly on local businesses, as citizens will be able to have full confidence in them.

Negatives
The greater the level of involvement in a foreign markets, the greater the need to monitor the political climate of the countries business is conducted. Changes in government often result in changes in policy and attitudes towards foreign business. Discourage the activities of foreign corporation by imposing restrictions such as import quotas, excess duties etc. Although evident to a greater or lesser extent in most countries, government ownership of economic activities is still prevalent in the former centrally planned economies, as well as in certain developing countries which lack a sufficiently well developed private sector to support a free market system.

Opportunities
Alliances Governments working together

Foreign Direct Investment

Trade Negotiations Tourism

Threats
Terrorism Political Unrest Dictatorship Recession Unemployment