Association of Chartered Certified Accountants (ACCA) Certification Practice Test

How can political systems and government policies impact organizations?

1. By providing funding

2. By creating new markets

3. By limiting risks

4. By introducing unexpected changes

The correct answer is: By introducing unexpected changes

Political systems and government policies have a significant influence on organizations primarily through their capacity to introduce unexpected changes. These changes can arise from new regulations, shifts in government leadership, changes in trade policies, or technological advancements driven by political decisions. Such alterations can disrupt established business practices and require organizations to adapt quickly to maintain compliance or capitalize on new opportunities. For instance, if a government implements stringent regulations to protect the environment, businesses may need to invest in new technologies or processes to meet these standards. Additionally, changes in taxation policy could affect organizational profitability and strategic planning. Thus, understanding that these political influences can lead to unforeseen circumstances is crucial for organizations, as they must remain agile and responsive to survive and thrive in a dynamic environment. While funding, new markets, and limiting risks are also relevant aspects of the political landscape, they often come as a result of predefined governmental actions or stable political conditions rather than unexpected shifts that can occur abruptly and require real-time adjustments from organizations.