Even after opening up of our economy in 1991, foreign companies found it extremely difficult to cut through bureaucracy and red tapism. Identify the element of business environment and explain it with the help of an example.

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Solution

The political environment consists of the forces concerning the management of public affairs and their impact on business. It includes the political conditions in the country and the attitude of the government towards businesses and business policy.

For example, Political unrest and threat to law and order adversely affect the confidence of investors and reduce the level of investment in the economy.

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Q. Even after opening up of Indian Economy, foreign companies found it extremely difficult to cut through the bureaucratic and red-tapism in government offices. This discourages them from investing in India. Identify the dimension of environment mentioned in this context.

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