diff --git a/lib/ansible/inventory/__init__.py b/lib/ansible/inventory/__init__.py
index 3e33c4c839..438ab798e7 100644
--- a/lib/ansible/inventory/__init__.py
+++ b/lib/ansible/inventory/__init__.py
@@ -677,7 +677,7 @@ class Inventory(object):
 
             # this can happen from particular API usages, particularly if not run
             # from /usr/bin/ansible-playbook
-            if basedir is None:
+            if basedir in ('', None):
                 basedir = './'
 
             scan_pass = scan_pass + 1
diff --git a/lib/ansible/plugins/strategy/__init__.py b/lib/ansible/plugins/strategy/__init__.py
index 8067d25b46..44727a1168 100644
--- a/lib/ansible/plugins/strategy/__init__.py
+++ b/lib/ansible/plugins/strategy/__init__.py
@@ -327,6 +327,7 @@ class StrategyBase:
         # Set/update the vars for this host
         # FIXME: probably should have a set vars method for the host?
         new_vars = host_info.get('host_vars', dict())
+        new_host.vars = self._inventory.get_host_vars(new_host)
         new_host.vars.update(new_vars)
 
         new_groups = host_info.get('groups', [])
@@ -379,6 +380,7 @@ class StrategyBase:
                 # create the new group and add it to inventory
                 new_group = Group(name=group_name)
                 self._inventory.add_group(new_group)
+                new_group.vars = self._inventory.get_group_vars(new_group)
 
                 # and add the group to the proper hierarchy
                 allgroup = self._inventory.get_group('all')