How legal and political environment affect the functioning of Business organisation? Explain with the help of an example.

Impact of Legal Environment: Many Acts are passed from time to time in order to control and regulate business activities. For example, by removing control on the capital market, the huge amount of capital was collected by using various new issues in the primary market. This has increased the availability of funds with the business houses and promoted large scale production, expansion and growth of business.

Impact of Political Environment: Its effect on the functioning of business organisations, is explained below through this example: It was only because of the political interest that Hyderabad came to be known as Cyberabad. In other words, it came to be known as Cyberabad because the IT companies were established there.