The critical concern Political environment has a very important impact on every business operation no matter what its size, its area of operation. Whether the company is domestic, national, international, large or small political factors of the country it is located in will have an impact on it. And the most crucial and unavoidable realities of international business are that both host and home governments are integral partners. Reflected in its policies and attitudes toward business are a governments idea of how best to promote the national interest, considering its own resources and political philosophy. A government control's and restricts a company's activities by encouraging and offering support or by discouraging and banning or restricting its activities depending on the government.

International law recognizes the right of nations to grant or withhold permission to do business within its political boundaries and control its citizens when it comes to conducting business. Thus, political environment of countries is a crit

Economic nationalism that exists to some degree in all countries is another factor that affects international environment. Nationalism is intense feelings of national pride and unity, an awakening of nation's people to take pride in their own country. This pride can take an anti-foreign business bias. One of the central aims of economic nationalism is the preservation of national economic anatomy where national interest and security are more important than international considerations.

International companies are often faced with many economic risks most of which arise without any prior warning. Economic risks are an important and a recurring part of political environment that a few companies can avoid. Exchange controls stems from shortage of foreign exchange held by the country. When this happens, controls may be placed upon all movements of capital or selectively against most politically vulnerable companies. Exchange controls are extended to cover products by applying a system of multiple exchange rates to regulate trade. Local-content laws- companies often require a portion of any product sold in a country to have a local content. Import restrictions- selective restrictions on import of certain raw materials, machines and spare parts are common strategies used to force foreign companies to purchase more materials within host country creating markets for local products. Tax controls- taxes are a classified risk when used as a means of controlling' foreign investments. They are often raised without warning and in violation of formal agreements. Price controls- essential products that command considerable public interest are often subject to price controls.

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Approximate Word count = 1339
Approximate Pages = 5 (250 words per page double spaced)