Political Environment - Case Study Example

Macroeconomic Politics is considered as the macro environment of a business. A business can thrive or fold depending on the environment it is in. Agood political environment such as political stability is conducive to business because it meant that business can operate unhampered. Its factories can work without disruption and its employees can go to work any issue therefore business can operate smoothly when there is a political stability. A bad political environment such as political instability on the other hand is a bad macroeconomic environment for business.

We can take the recent issue about Egypt’s coup’d etat where the military took over the government and the people protesting it. News of military crackdowns is everywhere and conflict happens every day. This is bad for business because it cannot operate smoothly. Moreso when it is in the Middle East where majority of the oil in the world is produced. In the case of political instability in Egypt, oil prices rose up above the $100 because Egypt controls the Suez Canal where most oil cargo passes through such as what is reported in the article “Oil prices rise above $100 post Egyptian militarys coup detat” (Business Standard, 2013).

This uncertainty that oil may not reach their destination or may be entangled in the conflict sends anxiety in the market that its price shot up. And this price hike in oil has ripple negative effect in business in general and for us consumers because all industry are dependent on power which needs oil. When the input of the price of oil shots up, the price of the products and services will naturally increase making everything expensive. Reference Oil prices rise above $100 post Egyptian militarys coup detat. (n.d.). Business Standard: News & analysis on economy, business and market.

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