NATURE & POLITICOLEGAL ENVIORONMENT

BY- Somesh Nayak Sandeep Mandal

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POLITICAL ENVIRONMENT AND ITS EFFECT

Political environment includes the political system, the government policies and attitude towards the business community and the unionism. All these aspects have a huge implication on the strategies adopted by the business firms. The stability of the government also influences business and related activities to a great extent.

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Changes in government often result in changes in policy and attitudes towards business environment. A foreign company operates in a host country -the government concernedcan either encourage foreign activities by offering attractive opportunities for investment and trade, or discourage its activities by imposing restrictions. Political risk is determined differently for different companies, as not all of them will be equally affected by political changes. For example, 5/6/12 industries requiring heavy capital

LEGAL ENVIRONMENT AND ITS EFFECT

This refers to set of laws, regulations, which influence the business organisations and their operations. Every business organisation has to obey, and work within the framework of the law. The important legislations that concern the business enterprises include: 1)Companies Act, 1956 2)Foreign Exchange Management Act, 1999
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3) The Factories Act, 1948

5 )Industries (Development and Regulation) Act, 1951 6)Trade Marks Act, 1999 7)Consumer Protection Act, 1986 8)Environment Protection Act 9)Competition Act, 2002

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