government and judiciary in a nation on International business. Political environment includes factors such as ideology and policies of the government , nature and type of economic system , relation with other nations , political stability etc. Economic policy of ruling party has serious economic and business implications. Main components:
Political ideology of the government
Political stability in the country relations of government with other nations Defense and military policy Welfare activities of government centre-state relationship Approach of opposition parties towards business. Regarding Working of MNCs ,political environmentis of three types: Political Environment of Domestic country in which MNC operates Political Environment of Foreign Country to which MNC belongs International Political environment Political Institutions in a Democratic Country
Legislature: whose role is to make the laws.
Executive: Responsible for implementing the laws. Judiciary: Responsible for interpreting the laws and setting disputes.
Legislature: It refers to our elected representatives.It
comprises parliament at the centre and state legislature at the state level. It frames policies ,enacts laws , frames budgets etc. Executive: It executes the rules and regulations framed by legislature. It compromises government which includes ministers , govt. officials etc. Judiciary: It refers to the system of courts in the nation . It comprises courts like supreme court , High court etc . It ensures that legislature is making laws within the framework of constitution. Legal Environment
It refers to rules and regulations framed by
government to regulate business units. The main Indian economic legislations are discussed below: 1. Indian contract Act,1872 2. Negotiable Instrument act,1881 3. Sale of Goods act,1930 4. Partnership act,1932 5. Labour laws 6. Companies act,1956 7. Foreign Exchange Regulation act,1973 8. Consumer Protection act, 1986 9. SEBI Act 1992 10. MRTP act,1969 Critical evaluation of Political and Legal environment
Failed to check concentration of economic power
Inefficient Public sector Units Failed to achieve Balanced Regional Development Failed to eliminate poverty Exploitation of consumers Failed to check Black Money Failed to protect Interest of workers. Causes of Failure
Unstable governments Corrupt Political leaders Corrupt administration Manipulation of Funds Ineffective enforcement of Laws Inefficient working of PSUs Inefficient political leaders