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    Chapter 3 - Political and Legal Environments Facing Business

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    Rusty Sangalang
    This document summarizes key concepts about political and legal environments facing businesses internationally. It discusses different types of political systems such as democracy, totalitarianism, and trends in contemporary systems. It also defines political risk and approaches to managing it. The document then defines legal systems and trends, including different bases of rules. It outlines operational and strategic legal concerns for international managers and discusses intellectual property and drivers of legal change.

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    Chapter 3 - Political and Legal Environments Facing Business

    Uploaded by

    Rusty Sangalang
    59 views21 pages
    This document summarizes key concepts about political and legal environments facing businesses internationally. It discusses different types of political systems such as democracy, totalitarianism, and trends in contemporary systems. It also defines political risk and approaches to managing it. The document then defines legal systems and trends, including different bases of rules. It outlines operational and strategic legal concerns for international managers and discusses intellectual property and drivers of legal change.

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    CHAPTER-3_POLITICAL-AND-LEGAL-ENVIRONMENTS-FACING-BUSINESS

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    This document summarizes key concepts about political and legal environments facing businesses internationally. It discusses different types of political systems such as democracy, totalitarianism, and trends in contemporary systems. It also defines political risk and approaches to managing it. The document then defines legal systems and trends, including different bases of rules. It outlines operational and strategic legal concerns for international managers and discusses intellectual property and drivers of legal change.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    59 views21 pages

    Chapter 3 - Political and Legal Environments Facing Business

    Uploaded by

    Rusty Sangalang
    This document summarizes key concepts about political and legal environments facing businesses internationally. It discusses different types of political systems such as democracy, totalitarianism, and trends in contemporary systems. It also defines political risk and approaches to managing it. The document then defines legal systems and trends, including different bases of rules. It outlines operational and strategic legal concerns for international managers and discusses intellectual property and drivers of legal change.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 21

    Chapter

    Three
    The Political
    and Legal
    Environments
    Facing
    Business

    3-1
    Chapter Objectives
    To discuss the philosophies and practices of a political system
    To profile trends in contemporary political systems
    To explain the idea of political risk and describe approaches to
    managing it
    To discuss philosophies and practices of the legal system
    To describe trends in contemporary legal systems
    To explain legal issues facing international companies

    3-2
    Political and Legal Factors Influencing
    International Business Operations

    3-3
    Definition of a Political
    System
    The complete set of institutions, political organizations, and interest
    groups,
    The relationships among institutions, and the political norms and rules
    that govern their functions

    3-4
    Individualism vs.
    Collectivism
    Individualism: primacy of the rights and role of the individual
    • Collectivism: primacy of the rights and role of the community

    3-5
    Political Ideology
    The system of ideas that expresses the goals, theories, and aims of a
    sociopolitical program
    Most modern societies are pluralistic—different groups champion
    competing political ideologies

    3-6
    The Political Spectrum

    3-7
    Democracy
    Wide participation by citizens in the decision-making process
    Five types:
    ◦ Parliamentary
    ◦ Liberal
    ◦ Multiparty
    ◦ Representative
    ◦ Social

    3-8
    Fundamental Elements of Democratic
    Political Systems

    3-9
    Totalitarianism
    Restricts decision making to a few individuals
    Types:
    ◦ Authoritarianism
    ◦ Fascism
    ◦ Secular totalitarianism
    ◦ Theocratic totalitarianism

    3-10
    Trends in Political Systems
    Third Wave of Democracy
    Engines of Democracy
    1. The failure of totalitarian regimes to deliver economic progress
    2. Improved communications technology
    3. Economic dividends of increasing political freedom

    3-11
    Definition of Political Risk
    The risk that political decisions or events in a country negatively affect
    the profitability or sustainability of an investment
    Types:
    ◦ Systemic
    ◦ Procedural
    ◦ Distributive
    ◦ Catastrophic

    3-12
    Definition of a Legal System
    The mechanism for creating, interpreting, and enforcing the laws in a
    specified jurisdiction
    Types:
    ◦ Common law
    ◦ Civil law
    ◦ Theocratic law
    ◦ Customary law
    ◦ Mixed systems

    3-13
    Trends in Legal Systems
    The preference for stability
    The influence of national legacies

    3-14
    Bases of Rules
    Rule of Man-ultimate power resides in a person

    Rule of Law-institutes a just political and social environment, guarantees


    the enforceability of commercial contracts and business transactions, and
    safeguards personal property and individual freedom

    3-15
    Operational Concerns that Face
    Managers Worldwide
    Starting a business
    Entering and enforcing contracts
    Hiring and firing local workers
    Closing down the business

    3-16
    Strategic Concerns that Face
    Managers Worldwide
    Product safety and liability
    Marketplace behavior
    Product origin and local content
    Legal jurisdiction
    Arbitration

    3-17
    Intellectual Property
    Intangible property rights that are a result of intellectual effort
    Intellectual property rights refer to the right to control and derive the
    benefits from writing, inventions, processes, and identifiers
    Local attitudes play a large role in piracy

    3-18
    Legacies, Economics, and
    Orientation
    Legal Legacies

    Wealth, Poverty, and Protection

    Cultural Orientation

    3-19
    The Driver of Change
    Countries that generate
    intellectual property are strong
    advocates of protecting the
    ownership rights.

    3-20
    All rights reserved. No part of this publication may
    be reproduced, stored in a retrieval system, or
    transmitted, in any form or by any means,
    electronic, mechanical, photocopying, recording, or
    otherwise, without the prior written permission of
    the publisher. Printed in the United States of
    America.

    3-21

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