Political FactorsWhen it comes to influence,political factors seems to take the lead but I'll argue out the case for socio-cultural factors when we reach there.Political factors are indeed powerful and do affect most aspects of our lives as well as the other components in the PESTEL framework and here are some important aspects that a venture can consider:
1.GovernmentAt the heart of most nations is government.Since they hold a substantial amount of wealth,resources and authority,their actions have an impact on a nation's citizens,corporations as well as other nations.What should the enterprise look out for:
a.Government direction - What are the intentions,plans and actions of the government.This can either be locally or in foreign nations depending on the exposure of your venture.
A good broad example is
Kenya vision 2030.It outlines the governments intentions,plans and accomplishments thus far in its development programme.How can this and other plans that a government has be useful to an enterprise?
To achieve its objectives, the government will have to collaborate with the private sector and therein lies the some of the opportunities and threats.It might also adopt/modify new policies,laws and even incentives to move the nation towards the intended direction.
On the surface a few opportunities present themselves.Firstly a venture can choose to capitalize on the governments interaction with the private sector i.e. position the venture to benefit from government spending.Secondly, industries will benefit from reforms enacted by the government which can lead to growth and avenues for diversification in addition to benefits derived from incentives.Even if a venture doesn't currently have the capacity to take advantage of the situation,it has time to acquire that capacity as the plan is implemented in stages.
Government plans can also bring about new threats through the same actions.A change in policy,laws or incentives can be a detrimental to whole industries while beneficial to others.For example if the government is focusing on shifting the reliance of the economy from one or more industries,those industries will be affected as resources might be diverted in support of other industries or projects.
An example of the effects of government actions can be found in this
thread.There are vibrant discussions from the investor section to the politics section that one can tap for information.
Government communication and transparency in its plans and actions is not only good for its citizens but corporations as it gives them a chance to plan for their future and reduce uncertainty.Information can be found in the various government agencies websites.An interesting development is the
Kenya Open Data Initiativeb.Government structure and governance - Kenya is beginning its path towards devolution.Each county will have its own agendas and consequently different priorities.This difference can be spotted in laws,policies and services offered by the county governments.Thus to a certain extent,doing business in one county might be different from doing business in another county.The same principle can be applied to understand how governance is achieved in foreign nations.
As government directly affects your venture,getting acquainted with its functioning and activities will help in avoiding conflicts.
c.Elections - With elections comes a change in leadership and/or a shift of power within the government.This change can lead to instability and uncertainty over the new governments direction.Will they continue with a previous regimes plans or introduce their own?
Due to the periodic nature of elections,cyclical opportunities and threats arise and in varying degrees.What works one time might not work the same way or to the same degree the next time.Some industries clearly benefit from electioneering periods such as advertising and media firms while the nation itself might experience a slowdown in business and investment,scarcity of products and fluctuation in currency rates.
The world is getting 'smaller'.We are getting more connected and interdependent.Elections and other developments in other nations can have an effect on your venture.In recent years this has been reaffirmed as developments in the Eurozone and US have been seen to affect the financial state of the globe.Being aware of developments in other nations is thus beneficial.
Although taxation falls under the government,it is better addressed under economical factors.This cannot begin to cover the extent of a government's influence on a venture but I hope it can offer a place to start or supplement your existing knowledge.