What is it about?
Business activities are influenced not only by internal business factors such as firm competitiveness, and business strategies. There are also external influences that are also very important. In developing countries, external influences such as political stability, regulatory institutions, freedom of the press and governance effectiveness are equally important.
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Why is it important?
In dealing with the influences of businesses in developing countries, it is important to focus on dealing with the external influences, businesses can only thrive in an environment where institutions are functional and effectiveness. Therefore, it is imperative for developing countries to focus on strengthening and building credible institutions that will create an enabling environment for businesses to thrive.
Perspectives
In developing countries, too much attention has been given to internal influences of business activities to the detriment of external influences. For developing countries, political stability, regulatory institutions and governance effectiveness are weak, and as such businesses are suffering because of these institutional deficits.
Arani Isukul
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This page is a summary of: Environmental Factors Influencing Corporate Governance, SAGE Open, June 2015, SAGE Publications,
DOI: 10.1177/2158244015581380.
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