Political environment

The political climate in a country in which a business firms operate is a very important factor. A hospitable and stable government can encourage business investment and growth n spite of scarcity of natural and other resources. The business firms also have to cope with a large number of other tensions like ideological conflicts, terrorism, traditional hostilities, government interventions, labour activism, and so on. The management of a business firm, therefore, should undertake political risk analysis prior to investing in a new project or in expansion of its existing business. For a systematic study of the political system, a business firm should, first of all, analyze the constitution, major political parties, form or structure of government, the mechanisms designed to guide a transition of power from one leader to the next, key power blocks, and the extent of popular support. In addition, a firm should also analyze how politicians finance their campaigns- what standards of honesty and /or conflict of interest apply. Political situation in Nepal is being very poor day by day. Due to unstable political systems and their policies, business organization are facing many problem and those who can manage such changes exists in the market and those who cannot are already root out from the market. These all external environment plays vital role in smooth running of the business. So every business firm should analyzed them properly and such factor are uncontrollable and business organization them self should formulate such strategy which easily cope with such uncontrollable factors.