Legal and Political Environment

The political environment comprises all government actions which affect the effective operations of the business in a particular country. Government policies have a significant impact on companies’ internal markets. Taxation rates set by governments have an impact on either attracting investors or closing down businesses (Hamilton & Webster, 2015). On the other hand, legal environments are terms, conditions, or domestic laws of a given country that affect the performance of any business. A number of countries try to create business opportunities for their nationals and foreign investors. However, much of these efforts fail to realize their dreams for various reasons.

The types of government and level of political stability in which businesses operate have direct impacts on the success or failure of this venture. Italy, for instance, is a democratic government with three arms; the legislature, executive, and the judiciary. This country adopts parliamentary democracy whose executive authority is headed by the council of ministers under the leadership of the prime minister (Vanhala, 2017). The Italian economy is heavily burdened by political interference and a high cost of conducting business, however, in spite of all these, the country still proves to be one of the best business destinations in the world (Lyubashits, Mamychev, Mordovtsev  & Vronskaya, 2015). The political environment of Italy is not turbulent enough to drive away investors in this country despite the high cost of maintaining the government in place. These costs are transferred to the businesses through high corporate tax which many investors overlook following many business opportunities available. Northern America for instance, despite being skeptical regards this country as a good business destination.

Italy’s legal framework is one of the best across the world. This country’s legal system provides for an amicable business and corporate dispute resolution mechanism, this serves as one of its strength in attracting foreign investors who may not wish to see corporate matters taking too long in the courts (Nguyen, Seddaiu & Roggero, 2014. In situations where the matters come before the courts, the legal system is designed in a way that allows for a shorter and less costly process. The regulatory authorities concerned with the issuance of business permits and revenue collection despite having their challenges prove to be effective executing their mandate (Malthaner & Waldmann, 2014). This contributes to effectiveness and efficiency of Italy in terms of doing business.

Despite the strides made in achieving global recognition as an economic hub, Italy still grapples with corruption like many other countries. This threatens to destroy its global image compared to their counterparts. Globally, Italy is ranked the sixtieth according to Transparency International’s report. This proves to be a dent in its efforts to remain a corruption free country. Worst of it all is that some state officials are beneficiaries of the menace and on many occasions undermine the process of investigation where they are implicated. Despite this level, Italy remains a good place for doing business compared to many other countries.

In summary, for any business to thrive, goodwill from the government is required to provide sustainable legal and political environment. Italian is one among many in the world that have made strides in ensuring that sustainable business environment prevails in the country. Corruption in Italy like many other countries is stifling the efforts to create a good business environment, however, the government proves to be committed to slain it.

References

Hamilton, L., & Webster, P. (2015). The international business environment. Oxford University Press, USA.

Lyubashits, V. Y., Mamychev, A. Y., Mordovtsev, A. Y., & Vronskaya, M. V. (2015). The socio-cultural paradigm of studies of state authority. Mediterranean Journal of Social Sciences, 6(3 S6), 301.

Malthaner, S., & Waldmann, P. (2014). The radical milieu: Conceptualizing the supportive social environment of terrorist groups. Studies in Conflict & Terrorism, 37(12), 979-998.

Nguyen, T. P. L., Seddaiu, G., & Roggero, P. P. (2014). Hybrid knowledge for understanding complex agri-environmental issues: nitrate pollution in Italy. International Journal of Agricultural Sustainability, 12(2), 164-182.

Vanhala, L. (2017). Is Legal Mobilization for the Birds? Legal Opportunity Structures and Environmental Nongovernmental Organizations in the United Kingdom, France, Finland, and Italy. Comparative Political Studies, 0010414017710257.