Chapter: 2
Political Environment
# Concept of Political Environment
The Political Environment of business
may be defined as the sum total of the political events and condition that have
direct or indirect bearing on its growth development of business. All the
business activities are influenced by political activities. So, the manager/management
should deeply study, the politics environment to achieve the organizational
goals.
# Components of Political Environment
Political Environment is wider in
nature. It includes various components which are mentioned below:
1) Political Ideology: The political environment refers to the government actions
which affect the operations of a business. These actions may be local,
regional, national or international level. The important types of political
ideology that exist in the world are:
a) Democratic: Democratic political
ideology creates a favorable political environment in the country which helps
to growth the business environment.
b) Totalitarian: In this ideology, the
government attempts to control the whole economy. The private sector does not
flourish under such
ideology.
2) Constitution (Political Structure) : The constitution of Nepal 2072 was
endorsed on Asoj 3, 2072 B.S. The constitution of Nepal has the policy of
strengthening the national economy through the participation of public,
co-operative and private sector.
3) Political Parties: Political Parties are regarded as the pillars of democratic system. They
try to win the support of the people to elect their representative in
legislation. Through the legislation, they can form government and rule the
nation according to their ideology and policies. So, the business environment
influences by political parties by their ideology and policies.
4) Government and it’s branches:
a) Executive: It refers to the organ of the state that is responsible for
the overall administration of the nation. It is composed of the government and
it’s organs as bureaucracy army and police.
The executive of Nepal, according to the Constitution of Nepal consists of
the following:
-
Federal
government: It is the central government.
-
State/
Provincial government: The executive power of the state shall be inherent in
the council of Ministers of the state led by the chief of state.
-
Local
government: Rural Municipality, Municipality and district assembly will remain
under the local level.
b) Judiciary: It refers to the court of law. It
is responsible for settling disputes and interpreting the rules and laws if
required.
According to the constitution of Nepal, the following courts will remain
in Nepal.
-
Supreme
Court: It is known as the main court of Nepal. It has the final authority to interpret
the constitution and laws.
-
High
Court: There shall be one High Court in each province.
-
District
Court: There shall be one District Court in each district.
c) Legislative: It is formed by the representatives
of people. It is also called the parliament. Its main responsibility is
formulation and enactment of law.
According to the constitution of Nepal, 2015, the legislature
of Nepal is divided into three levels:
-
Federal
Legislature
-
State/
Provincial Legislature
-
Local
Legislature
d) Other Judicial Bodies: In addition to the above courts,
Judicial Bodies maybe formed at the local level or other bodies as required to
pursue alternative dispute settlement methods.
#
Business Government Relationship
The relationship between the
government and business creates an opportunity for the overall development of a
country. The government efforts are directed towards development of trade and
industries. The relationship between the government and business maybe
explained through the following points:
1) Role of the Government towards the Business Sector
i.
Infrastructure and Manpower Development:
The government develops fundamental infrastructures for the
development of trade and industry in the country. They are transportation,
electricity, communication. Government ensures the education and training system
for manpower development.
ii.
Formulation and enactment of regulations and policies:
It is the responsibility of
the government to formulate necessary regulations for the development of
business sectors. Regulations protect the rights of the business as well as
consumers. They also encourage the business to follow rules and regulation as
well as social responsibilities. Some business regulation act in Nepal are:
· Private Firm 2014 Act
· Partnership Act 2020
· Company act 2074
· Industrial Enterprises Act
· Income Tax
· Value Added Tax
Likewise, some important
policies are:
· Monetary Policy
· Fiscal Policy
· Industrial Policy
· Trade Policy
iii.
Provide a stable environment
iv.
Source of information
v.
Financial assistance
vi.
Subsidies, incentives and grants
vii.
Security
viii.
Promotion of business
ix.
Training
2) Role of the business towards the
government
i.
Tax Payment
ii.
Execution of contracts
iii.
Rendering of advice
iv.
Source of information
# Nepalese Political Environment Issues and Problems
· Belongings to the New Constitution
· Governance
· Political Instability
· Lack of Broader Vision on Political
Parties
· Poor understandings among the
Political Parties
· Lack of Democratic Thought
· Labor Force as Political Force
· Over- dependent Private Sector
· Employer’s Associations
Comments
Post a Comment