There are 3 types of government that affect the country and these are Local, National Government and International Government (e.g. European Union). The political party’s decision will affect large numbers of people and businesses. The decisions can be either positive or negative. For a business, a positive one could be an exemption from paying taxes, so increase their profit. An example of a negative one would be an increase of taxes which would mean the company’s profit would suffer. * Political stability
A manifesto is the plan of a political party so that once they are elected they can put it into action. This can therefore be used by businesses to asses these plans and how might they affect them, so they can come up with a strategy to decrease the negative effects and because once the political party is elected a business is provided with a degree of certainty until the time of next elections. Stability is essential for the economy. This stability means there is a predictable political environment and this will benefit both TESCO and its stakeholders because the company will want to invest and expand so therefore will increase economic growth of the country which in turn will increase public spending. On the other hand the political instability is not going to attract investors whom will rather choose to invest in companies in another country, meaning that TESCO share price could fall as well as the shareholders could withdraw their money and in a critical event make the company bust. Also political instability will affect an economic factor such as inflation.
References: Table 1: http://finance.indiamart.com/taxation/income_tax/rates.html Table 2: http://www.hmrc.gov.uk/rates/it.htm