Introduction:
Companies have many important decisions to consider before conducting business within a foreign country. Companies use a PESTLE model to analyze a country’s macro-environment, competitive forces, uncertainties and risks. A PESTLE profile includes the political and legal systems, economy, socio-culture, geographic environment, and technology of a country. This will help determine whether it is beneficial and profitable for a company to conduct business within a particular country. The PESTLE model for Australia will help businesses decide if Australia is an ideal location for their company.
Political and Legal Systems:
Australia is an English speaking democratic country that derives its procedures from their written constitution. The Australian Constitution explains how their government should function and what kinds of issues laws can be passed on (Australia.gov.au, 2011). Similar to the United States, Australia’s federal government, which is led by Prime Minister Julia Gillard, delegates power between its overall government and its individual states. Australia’s House of Representatives is made up of 148 representatives, while, their Senate is made up of 12 elected senators, two from each state.
Political Stability: For the last 11 years, the IMD World Competitiveness Yearbook 2010 ranked Australia as the worlds third for political stability and was ranked a 9.24, which indicates a very high level of stability (NSW Government, 2010). Companies will not be affected by political unrest.
Corruption: On a scale of 0-149 (0 being none and 149 being very high) for corruption, Australia ranked an eight (World Audit, 2011). Particularly for large companies, corruption within a country is crucial when considering the negative influence of corrupt politicians and authorities. Australia will allow a company to run an ethical business model due to a low corruption rating.
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