How Political Factors Affect Business Activities in Asian Countries
. Contents .
1. Introduction………………………………………………………………………..……..3
2. Political Factors That Affect Business………………………………………...4
1) The Case of Toyota Motor Corporation………………….….……..5
2) The Case of Taiwan………………………………..…………….…….…….8
3. Conclusion…………………………………………………………..…………………..…9
4. References……………………………………………………………………………..….10
Introduction
For every business, internal factors, such as the company’s culture, vision, and its own products are extremely important for their success. However, the external factors are also so important that every business should pay special attention to them. A model has been invented to describe those external factors that influence business activities. This model is called the “PESTLE Analysis”, which is formally known as “PEST”, and was first invented by Francis Joseph Aguilar, in his book “Scanning the Business Environment”. PESTLE Analysis is a model to analyze external factors that may have impact on business activities. P stands for Political, E,S,T,L,E, stand for Economic, Social, Technological, Legal and Ecological.(Francis, 1967)
In this model, the first factor, the political factor, can impact most aspects of our society, whether for individuals or organizations, in developing countries or developed countries. The reality is that any strict policies, tense political situations, or even a little transformation may cause the business to suffer a lot, and even go bankrupt. Such as the sovereignty dispute of South China Sea in 2013-2014, the anti-foreign riot in Vietnam in 2013, and the controversial election in Indonesia and India in 2013, in recent years, political factors do affect in Asian business activities in many aspects.
This project will first explore what political factors are and why political factors could affect business activities. In the second section, I will analyze the specific case of the Toyota Motor Corporation, and prove how political factors influence business activities. Some solutions and evaluations will also be given for the Toyota Motor Corporation in this section. Then I will give a study case of Taiwan to describe how political factors affect a third-party country. In the last part of the project, I will give some other examples of political factors influencing business activities, and provide several suggestions to avoid negative influences. By doing this, I aim to analyze the results that political factors bring to business activities and give some advice for other businesses.
Political Factors That Affect Business
There are strong arguments to support the idea that political factors have a strong impact on business activities. First of all, there can be little question that government policies can directly affect business activities. Positive policies, such as open policies and trade policies, will definitely encourage the development of business activities while negative policies, such as government control policies or trade protection policies, will be very big obstructive factors for business activities. Second, the inter-country relationships or attitudes can also affect business activities a lot. In such a buyer’s market, customers can freely choose products from their own needs, which will vary unexpectedly among different countries. Third, political situations, such as wars and conflicts, elections, terrorism, and government change, cannot be ignored when doing business. From the huge economic bust during the Second World War, to the unbalanced trade situation during the cold war between the United States of America and the Union of Soviet Socialist Republics, there is never lack of cases to prove that specific political situations have a tremendous and lasting impact on business activities. Besides that, other political factors also play important roles in business, such as internal or international pressure groups, funding, grants and
