Political Environment Org

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  • 8/14/2019 Political Environment Org



    By: Sayad Rashid

    By: Sayad Rashid

    Business PoliticalEnvironment


  • 8/14/2019 Political Environment Org


    Political Structure in India

    The country attained freedom on 15 August

    1947. The Constitution of the Republic came

    into effect on 26 January 1950.

    Free India's first Prime Minister, Pandit

    Jawaharlal Nehru .

    The Constitution was made flexible enough to

    adjust to the demands of social and economicchanges within a democratic framework.

    Adopting the path of democracy, the country

    held its first general elections in 1952.By: Sayad RashidBusiness Political


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    Parallel state structure

    Formal political structure of thestates parallels that of the national

    governmentNational state

    President Governor

    Prime Minister Chief Minister

    Parliament Assembly

    Supreme Court High CourtBy: Sayad RashidBusiness PoliticalEnvironment 3

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    Political system and business

    The political system prevailing in acountry decides, promotes, fosters,encourages, shelters, directs andcontrols the business activities ofthat country.

    By: Sayad RashidBusiness PoliticalEnvironment


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    Basic Political philosophiesTwo basic political philosophies

    exist all over the world:

    Democracy (refers to a politicalsystem in which the supreme power is inthe hands of the people. )

    Totalitarianism(also calledauthoritarianism, refers to a politicalsystem in which individual freedom iscompletely subordinated to the authority

    of the state.) By: Sayad RashidBusiness PoliticalEnvironment 5

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    Basic Political philosophiesCont

    Democracy comprises two types:oPure Democracy (Requires every

    citizen to take part ingovernance.)


    Republican (exists when leaders,elected by people, do the ruling.)

    By: Sayad RashidBusiness PoliticalEnvironment


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    Basic Political philosophies(Cont)Totalitarianism, in itself, is of four

    types: o Theocratic (When the religious leadersof a country also act as political leaders.)

    oSecular (When political leaders are guidedby military and bureaucratic power)

    oRight-wing (private ownership isendorsed by government, market forces arealso allowed a free play, but politicalfreedoms are rarely granted)

    oTribal (Exists when a political party thatBy: Sayad RashidBusiness PoliticalEnvironment 7

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    The political system underdemocratic dispensation comprisesthree vital institutions:


    Executive or Government


    By: Sayad RashidBusiness PoliticalEnvironment


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    THREE INSTITUTIONS (Continue)Legislature is the most powerful

    institution vested with such powers like

    policy making, law-making, budgetapproving, executive control and actingas a mirror of public opinion.

    It decide such vital aspects as the type

    of business activities the country shouldhave, who should have, who should ownthem, what should be their size ofoperations, what should happen to their

    earnings and other related factors.By: Sayad RashidBusiness PoliticalEnvironment 9

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    Parliamentary system ofgovernment

    the executive authority is responsibleto the Parliament.

    By: Sayad RashidBusiness PoliticalEnvironment


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    Executive or Government the centreof political authority having the power

    to govern those it serves.The founder of our constitution provided for

    a federal set-up ,with powers being dividedbetween the national and the state

    governments. The power of central andstate governments is described in thisconstitution.

    By: Sayad RashidBusiness PoliticalEnvironment


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    Business Responsibilities toGovernment:a) Tax Payment

    b) Voluntary Programmes

    c) Providing Information

    d) Government Contracts

    e) Government Services

    f) Political ActivityBy: Sayad RashidBusiness Political


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    THREE INSTITUTIONS (Continue) Government Responsibilities to


    a) Establishment and Enforcement of Lawsb) Maintenance of Order

    c) Money and Credit

    d) Orderly Growth

    e) Infrastructuref) Information

    g) Assistance to small industries

    h) Transfer of Technology

    i) Government Competition

    j) Inspection and LicencesBy: Sayad RashidBusiness PoliticalEnvironment 13

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    Judiciary determines the manner inwhich the work of the executive has

    been fulfilled. It sees to it that theexercise of executive authorityconforms to the general rules laid downby the legislature.

    It also settles the relationship betweenprivate citizens, on the one hand, andbetween citizens and government onthe other.

    By: Sayad RashidBusiness PoliticalEnvironment


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    System of LawsThere are four basic legal systems

    prevailing around the world:

    Islamic law (derived from the interpretation of the holyQuran and is found in the countries where Muslims are inmajority.)

    Socialist law (Comes from the Marxist socialistsystems and continues to influence regulations in formerand present communist countries.)

    Common law (derived from English law and found incountries which are under British influence.)

    Civil or Code law (is based on a detailed set of lawsthat make u a code.

    By: Sayad RashidBusiness PoliticalEnvironment


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    Judicial Powers

    The judiciary in a country is influencedby the political system. The government

    of a country defines the legalframework within which firms dobusiness and often the laws thatregulate business reflect the rulers

    political ideology.The power of the judiciary are of the

    dual type:

    iii.The authority of the courts to settle legaldisputes; andBy: Sayad RashidBusiness Political


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    Judicial Activism

    In a real sense, judicial activism refersto the review power vested with the

    courts and its scope varies with thewidth of power conferred on courts. Thescope is wider where the power of

    judicial review extends not only over

    executive action, as in the UK, but alsoother legislative action.

    By: Sayad RashidBusiness PoliticalEnvironment


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    judiciary Executive legislature



    State List


    State Govt. Local Govt.


    involvementin business




    Organization(e.g.: development banks

    ExportsDevelopment authorities)

    RegulatoryOrganizations(SEBI, TRAI)

    By: Sayad RashidBusiness PoliticalEnvironment


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    The constitution of India is the most significantdocument which is fundamental to the

    governance of the state. It is the product notof political revolution but of the research anddeliberations of a body of eminentrepresentatives of people who sought to

    improve upon the then existing system.The historic Objectives Resolution which was

    moved by Pandit Jawaharlal Nehru on 9December 1946 and which was subsequentlyadopted by the Constitution Assembly on 22

    January 1947, inspired the shaping of theBy: Sayad RashidBusiness Political


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    Parts of Constitution

    The Indian Constitution has threeparts, viz:

    The PreambleThe Fundamental Rights and

    Fundamental Duties

    The Directive Principles of theState Policy.

    By: Sayad RashidBusiness PoliticalEnvironment


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    The Preamble is an introduction to theConstitution and contains its basic philosophy.

    The Preamble to the Indian Constitution statesthat

    We the people of India having solemnlyresolved to constitute ourselves into aSovereign, Socialist, Secular, Democratic,Republic and to secure to all citizens: justice,

    social, economic and political; Liberty ofthought, expression, belief, faith, and worship;Equality of status and opportunity; and topromote among them all fraternity assuringthe dignity of the individual and the unity andthe integrity of the Nation.By: Sayad RashidBusiness PoliticalEnvironment 21

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    THE PREAMBLE (Key Words)

    o Sovereign(With the writing of the constitution,India became Sovereign Republic like USA or the SwissRepublic.)


    Socialist (Added to the Preamble by the 42nd

    Amendment of the Constitution in 1976. Socialismimplies State ownership of tools of production with thebenefits to inure to the public. It also advocatesagrarian reforms, a strong public sector, control overprivate investment and wealth and national self-reliance.)

    o Secular (Was inserted in the Preamble by the 42ndAmendment of the Constitution in 1976. The real spiritof secularism is to make religion purely a private affair

    and to manage the affairs of the State free from anyreligious influence.)

    By: Sayad RashidBusiness PoliticalEnvironment


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    THE PREAMBLE (Key Words)

    o Republic (Implies an elected head of State. Underthe republican form of Govt., on the other hand, thehead of State is always elected for a fixed term. Ours is

    a Republican form of Govt. and for every 5 year period,we elect our President who is head of State.)

    o Liberty (Signifies the absence of any arbitraryrestraint on the freedom of individual action and thecreation of conditions conducive to the fullest

    development of the personality of the individual.)

    o Fraternity (Demands the spirit of brotherhood. Thisspirit is essential in our society known for its diversity.)

    By: Sayad RashidBusiness PoliticalEnvironment


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    The Fundamental rights are defined asthe basic human rights of all citizens.

    These rights, defined in Part III of theConstitution, apply irrespective of race,

    place of birth, religion , caste , creed orgender. They are enforceable by thecourts, subject to specific restrictions.

    By: Sayad RashidBusiness PoliticalEnvironment


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    By: Sayad RashidBusiness PoliticalEnvironment


  • 8/14/2019 Political Environment Org



    According to the 42nd Amendment passed in 1976 aset of Ten Fundamental Duties of citizens was includedin the Constitution of India. They are :

    2. To abide by the Constitution and respect the ideals andInstitutions.

    3. To respect National Flag and National Anthem.

    4. To realise and follow the essential ideals of Non-violence, Democracy and Secularism.5. It is the duty of every citizen to preserve the rich

    heritage of our Culture.6. To protect the Sovereignty, Unity and Integrity of our

    Nation.7. To safeguard public property.8. To defend our Country even at the cost of our life.9. To protect Natural Resources.10.To avoid Dowry, Gambling and other Social evils.11.To strive towards excellence in their respectiveBy: Sayad RashidBusiness PoliticalEnvironment 26

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    The Directive Principles of State Policy

    (sometimes called national objectives),embodied in Part IV of the constitution, are aunique feature of our Constitution. TheDirective Principles are the directives to the

    various governments and govt. agencies andare fundamental in the governance of thecountry.

    There are 17 Directive Principles and they may

    be classified, for convenience, under fourheads viz; Provisions dealing with Welfare (Art. 38, 42, 45,


    Provisions dealing with Social Justice (Art. 39, 41,

    43, 46). By: Sayad RashidBusiness PoliticalEnvironment 27

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    Article 38(1) lays down that the State shall promote the

    welfare of the people by securing a social order in whichjustice- social, economic and political- shall inform all theinstitutions of national life.

    Article 38(2) lays down that the State shall strive tominimise the inequalities in income, and eliminate

    inequalities in status, facilities and opportunities, not onlyamong individuals but also among groups of people.

    Article 39 emphasizes that the State shall direct its policytowards securing: (a) adequate means of livelihood to allcitizens; (b) a proper distribution of the material resourcesof the community to the common good; (c) the preventionof concentration of wealth to the common detriment; (d)equal pay for equal work for both men and women; (e) theprotection of strength and health of workers and avoiding

    circumstances which force citizens to enter avocationsunsuited to their a e or stren th; and (f) the rotection ofBy: Sayad RashidBusiness Political


    Article 41 lays down that the State shall within the limits of

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    Article 41 lays down that the State shall, within the limits ofits economic capacity and development, make provisions forsecuring the right to work, to education and to publicassistance in cases of unemployment, old age, sickness and

    disablement. Article 42 states that the State shall make provision for

    securing just and humane conditions of work and formaternity relief.

    Article 43 emphasis the necessity of an adequate or livingwage in all sectors of economic activity. The Article enjoinsthat healthy conditions of work should be provided and adecent standard of living should be provided.

    Article 43(A) states that the State shall take steps to secure

    the participation of workers in the management ofundertakings, establishments or other organisationsengaged in any industry.

    Article 46, The state shall promote with special care theeducational and economic interests of the weaker sections of

    the people, and, in particular, of the scheduled castes andBy: Sayad RashidBusiness PoliticalEnvironment 29

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    Distinction between Fundamental Rights

    and Directive Principles

    Fundamental Rights Directive Principles

    Even the Government cannot takeaway or abridge these rights.

    These rights are negative i.e.,contain donts.

    These are enforceable in lawcourts.

    The Government cannot takepolicy decisions on these rights.

    These rights strengthen politicaldemocracy.

    These are natural rights.

    These right are justifiable.

    These are mere instructionsto the Government.

    These are positive andcontain dos.

    These are not enforceable inany court.

    The Government has powersto make policy decisions onthese principles

    The implementation of theseprinciples ensures social andeconomic democracy.

    These lead to protect humanrights.

    These rights are notjustifiable.By: Sayad RashidBusiness Political


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    Separation of power

    The separation of powers contemplates the idea thatthe governmental functions must be based on atripartite division of legislature, executive and


    Each organ should be separate, distinct andsovereign in its own allocated sphere and it shouldnot exercise the functions assigned to another.

    They should function with in the spheres allotted tothem. No authority created under the Constitution issupreme; the Constitution is supreme and all theauthorities function under the supreme law of the

    land. By: Sayad RashidBusiness PoliticalEnvironment 31

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    Division of power

    Indians Constitution distributes the itemsfor legislation among 3 lists: -

    Union List (Union has exclusive power to

    make laws on all matters in the Union list.) State List (state has exclusive powers to

    make laws in the State List. Except for theUnion Territories, the centre cannot normallylegislate on any matter included in the State

    List.) Concurrent List (both the Union and the

    State can legislate on matters in theconcurrent List.)

    By: Sayad RashidBusiness PoliticalEnvironment


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    Thank U

    By: Sayad RashidBusiness PoliticalE i 33