Political environment comprises the elements relating to government affairs. It serves as the regulatory framework of business. The main constituents of a country’s political and legal environment are as follows:
i. The constitutions of the country.
ii. Political organization – organization and philosophy of political parties, Ideology of the Government, nature and extent of bureaucracy, influence of primary groups, business donations to political parties, political consciousness, etc.
iii. Political stability – structure of military and police force, election system, law and order situation, President’s Rule, foreign infiltrations, secessionist activities, etc.
iv. Image of the country and its leaders.
v. Foreign policy – alignment or non-alignment, relations with neighboring countries.
vi. Defense and military policy.
vii. Laws governing business, and legal system.
viii. Flexibility and adaptability of laws – constitutional amendments and direction of public policies.
ix. The judicial system – implementation and effectiveness of laws.