Very significant effects of politics on business are possible. For instance, a company’s ability to conduct business or reap the benefits of international expansion may depend on local rules and regulations. The influence of politics on the industry is significant enough that aspiring business owners, managers, and strategists in highly regulated sectors should study it.

Business and the Government

To appreciate the government’s impact on commerce, one must first appreciate its function in a nation. Professor Forest Reinhardt from Harvard Business School outlines these four roles for government in his MOOC Global Business.

  • The prevention of harm from the outside to the populace.
  • Safeguarding the populace from internal dangers.
  • Security of private property.
  • Methods of conflict resolution need to be developed.

Problems in Political Government

Politics has the potential to both help businesses and hinder their efforts to create value. Corruption, government subsidies for indigenous firms, and the internationalization of competitors are only a few threats to a company’s survival.

The Value of Learning About International Politics

Even if you don’t want to extend your business overseas, knowing about international politics is essential. The chance to expand internationally into new markets exists at all times. Foreign corporations present a global competitive threat, making it necessary to understand international politics.