“The location of plant can be affected by political consideration also”. Explain the factors in the light of this statement.
I think that the implication of the statement is that political interests and business ones can work in collusion with one another. It is no accident that commerce and politics have a very strong connection. As seen best with the Industrialization period after the Civil War in American History, business leaders have always had some type of hand in political affairs. The late Howard Zinn's essay, "Robber Barons and Rebels," in his "A People's History of the United States," shows this in a lucid and quite maginificent way. The political affairs of the state are either influenced by or reflective of an active business culture of the state. With this in mind, the location of a plant can be a political process, as much as a business one. Leaders of the latter will go to great lengths in lobbying leaders of the former to share their vision. With this in mind, the decision to locate a plant's factory could be made on a basis of commerce, but also might reflect political interests working in tandem with business ones. Additionally, the specific decision to locate the plant in a rural or urban area, as well as other distinctions, could reflect political reality and influence. For example, a case making much news is the 1984 Union Carbide gas leak in Bhopal, India. Over time, Indian historians and thinkers have questioned why a plant producing such toxic gas and noxious fumes/ chemicals would have been allowed to be located in such a dense urban area that was so highly populated. In this case, one has to presume that the location of the plan was affected by political considerations as well as economic ones, as it has been concluded that the lack of a governmental voice in this issue was a reflection of political miscommunication or governmental collusion with business interests.
Political factors become important for selection of location when locations in different countries or major political unis such as states within a country are being considered. The biggest reason for this is that the political situation in such locations affect the stability of such places as well as their future development and growth. Setting up a plant is a decision that has ling term implications, and therefore decision on plant location must take into consideration the long term impact of political stability and economic development on the plant and the business activities supported by it.
In addition to the long term implications the political situation also effects the immediate performance of the plant. One major aspect affecting a plant affected by political factors is the situation relating to labour relations and other employment related issues. The political stance of the government in power has major impact on the discipline among labour force and the relationship between employees and the management. A bad industrial relations situation can lead do frequent strikes, lock outs and other similar problems.
Political situation also affect the stance of the government towards large businesses, and foreign companies operating locally. Some countries may prefer doing business with some specific countries and may have negative feeling toward some other countries.