Political issues have a great impact on businesses. Consumers tend to want to buy and take their business to places that have a like mindset with their beliefs. We are seeing that happening in the country right now with the Black Lives Matters movement.
The killing of George Floyd sparked protests all over the world. It was impossible to ignore the movement that was occurring, and because of this, it shed light on many businesses who spoke up for the movement and those who remained silent. For those businesses who chose not to speak on the movement, they were highlighted, and social media posts were created to encourage those not to shop there. This example shows that political issues have impacts on businesses for the good and the bad.
There are some things that can get affected when there is political risk. There is a higher chance that interest rates will become higher. There are also more social issues that will arise because the government is not really secure. People can panic and cause even more problems.
There are also some actions that can be done by the government that will affect businesses. For example, there are some companies that can acquire the company’s assets for various reasons. It can be difficult for businesses to get financing, especially if they are not making enough sales or if they do not have enough assets anymore.
Political issues have great impact on global businesses. Business is highly influenced by political decisions taken by the governments in different countries. These issues have implications on investment, consumption and economic growth.
Increase or decrease in tax could be an example of a political issue. Government can increase tax for some companies and decrease tax for others, the decision will have a direct impact on the company.
Political issues on bureaucracy, corruption, tariffs, trade control, competition regulation, regulation and deregulation, import restrictions, consumer protection and e- commerce, government involvement in trade union and employment laws always have effects on global businesses.