Fundamentals of Management, 8th ed

political–legal

dimension

The government

regulation of

business and the

relationship between

business and

government

38

Part 1: An Introduction to Management

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first one and then another industry began to stumble, critics began to point to lack of

regulation and oversight as contributing factors. As a result, lawmakers began to take a

much more pronounced interest in adopting new and stricter regulations for business.

3

Finally, political stability has ramifications for planning. No business wants to set up

shop in another country unless trade relationships with that country are relatively well

defined and stable. Hence, U.S. firms are more likely to do business in England, Mexico,

and Canada than in Syria and Afghanistan. Similar issues are relevant to assessments of

local and state governments. A new mayor or governor can affect many organizations,

especially small firms that do business in only one location and are susceptible to deed

and zoning restrictions, property and school taxes, and the like.