...Political system and its influence on Business The basic role of a political system is to integrate the parts of a society into a viable functioning unit, bringing together people of different ethnic or other backgrounds and allow them to work together to govern themselves.The political policies implemented are often influenced by MNE managements, who are greatly affected by such policies. This is often done in the interest articulation stage through the CEO of an MNE and their employees. The basic tenants of democracy include the freedom of opinion, Expression,press and organization,Elections,limited terms for elected officials an independent court system,respect for personal property,nonpolitical bureaucracy and defense, infrastructure, and accessibility to the decision-making process. Presidential Form,Parliamentary System,Various Combinations.Basic Political Ideologies includes Democracy, Democratic systems involve wide participation by citizens in the decision-making process.In representative democracy, majority rule is achieved through periodic elections.Factors for evaluating freedom are Political rights and Civil liberties. Political rights include Fair and competitive elections Power for elected representatives Ability to organize Safeguards on rights of minorities In a totalitarian system, decision making is restricted to a few individuals.Theocratic totalitarianism is the form prevalent in Muslim countries. With secular totalitarianism...
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...incurring as little costs as possible in the effecting public procurement. It provides for a fair Competition among the tenderers KMC do not limit competition among the tenderers; in particular, it does not prevent any tenderer from participating by unjustified use of the restricted procedure or by using discriminatory criteria. It promotes transparency of the organization in the use of public funds Public funds may be used only for the purposes determined by a contract concluded in the public procurement procedure. Through the Principle of Equality of Tenderers KMC may not impose conditions that would constitute territorial, subject or personal discrimination among tenderers or discrimination arising out of the classification of the business performed by the tenderers. It allows for the confidentiality of the contracts When disseminating technical specifications concerning the awarding of contracts to tenderers, KMC ensures the protection of confidentiality of the information placed at their disposal. It helps in Prevention of corruption Common measures for prevention of corruption may include, procurement officer drafting a plan and providing all instructions and work orders to all the parties involved in public procurement. Prevention of Conflict of Interest Conflict of interests for the purpose of this Law exists where relation between contracting firm and bidder may impact impartiality of contracting authority in making decision in public procurement procedure. Helps...
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...Chapter three Governmental and legal systems CHINA COMPLICATED RIS, BIG OPPORTUNITIES During its thirty years of communist rule, China prohibited foreign investment and restricted foreign trade. Then, China enacted the Law on Joint Ventures using Chinese and Foreign Investment in 1978. China’s subsequent transformation has been fueled by a landslide of foreign investments made in response to the country’s market potential, market performance, improved infrastructure, enormous resources, and strategic position. Frustrating this process, however, have been the politics of China’s elaborate bureaucracy, as well as its ill-defined legal system and pervasive corruption. Historically China has relied upon “the rule of man” and the belief that legal rights are derived from the power of the individual. Upon joining the WTO, China agreed to continue to reform its business environment and to move toward transparent, rules based, enforcement-oriented standards. But the business reality is far from the WTO obligations specifically in the continued controversy over the protection of intellectual property. Chinese enterprises are themselves becoming global investors, both by acquiring foreign firms and investing in foreign lands. INTRODUCTION For a multinational enterprise to succeed in countries with different political and legal environments, its management must carefully analyze the fit between its corporate policies and the political and legal conditions of each particular nation...
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...CHAPTER THREE THE POLITICAL AND LEGAL ENVIRONMENTS FACING BUSINESS OBJECTIVES • To discuss the different goals and functions of political systems • To profile trends in the emergence and diffusion of political systems • To identify the idea of political risk and approaches to managing it • To understand how different political and legal systems affect the conduct of business • To profile trends in the evolution and diffusion of legal systems • To examine the major legal issues facing international business companies • To profile the idea of intellectual property and the basis of concern and controversy Chapter Overview When firms source, produce, and/or market products in foreign countries, they encounter dynamic and challenging political and legal environments. Chapter Three provides a conceptual foundation for the examination of the political and legal dimensions of international business operations. It compares major political regimes, discusses their potential influence upon the development of effective business strategies, and considers the relevance of political risk. The chapter also examines the major types of legal systems that exist today, as well as the strategic and operational concerns they pose. It concludes with a discussion of intellectual property rights and the associated challenges confronted in an age of globalization. Chapter Outline OPENING CASE: CHINA’S BUSINESS ENVIRONMENT [See Map 3.1.] During its thirty years...
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...Global Business Today 6e by Charles W.L. Hill McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 2 National Differences in Political Economy Introduction Question: What is the political economy of a country? A country’s political economy refers to its political, economic, and legal systems These systems are interdependent, and interact and influence each other A country’s political system has major implications for the practice of international business 2-3 Political Systems A political system is the system of government in a nation Political systems can be assessed in terms of the degree to which they emphasize collectivism as opposed to individualism in terms of the degree to which they are democratic or totalitarian 2-4 Classroom Performance System The political, economic and legal systems of a country are called a) Political systems b) Economic systems c) Legal systems d) Political economy 2-5 Collectivism and Individualism Collectivism refers to a system that stresses the primacy of collective goals over individual goals Collectivism can be traced to the ancient Greek philosopher Plato Today, socialists support collectivism When collectivism is emphasized, the needs of the society as whole are generally viewed as being more important than individual freedoms 2-6 Collectivism and Individualism Socialism Modern socialists trace their roots to Karl Marx who advocated state...
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...The Report For Canadian Attractiveness For FDI Executive Summary The aim of this report is to assess Canadian attractiveness as a destination for foreign direct investment. It will adopt the Political Economy Analysis to discuss the benefits, risks and costs from Canadian political, economical and legal systems for FDI. It is stated that Canadian democratic systems prevent government from abusing power; market-oriented economic systems advocate innovation and property rights protection and its legal systems provide safeguards to property rights protection. Therefore, it believes that investing in Canada is a good choice. Since Canada is rich in natural resources and has rich human resources, it is recommended that Canada is appealing for firms which are doing business in the field of natural resources or high-technology. Table of Content Executive Summary 1 1. Introduction 4 2. Political Economy Analysis 5 2.1. Political System 5 2.2. Economical System 6 2.3. Legal System 8 3. Recommendation 9 4. Conclusion 9 References 10 Appendix 12 Table of Figures Figure 1 FDI Index 4 Figure 2 Protection Years 7 Figure 3 Net government debt as percent of GDP 8 1. Introduction Canada, with a population approximately 34 million people, is the second largest country in size after Russia (CIA, 2013). Canada is also one of the largest advanced economies in the world. In the respect to attracting FDI, it jumps 16 spots into 4th place (ATKearney, 2013). Figure 1 FDI Index Source: (ATKearney...
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...al The cultural, political and legal environment of international business Abstract A study of the elements of a domestic market and those of an international market may reveal many crucial differences, especially political, legal and cultural differences. For example, the "rules of the game” of business in the international market are diverse, changeable and often unclear. The international firm may have to content with different legal and ethical standards in different host countries. In this paper the parameters of the political, legal, and the cultural environment of international business will be considered, The paper also relates how political, legal, and cultural incidents or situations may become roadblocks to the smooth operation of business ventures in foreign countries. Misunderstandings and breakdown in communication often arise from differences in perception by executives who are not from the same cultural, legal and political background. International investors need to know what elements in a foreign culture have the greatest influence over consumption patterns in general and particularly the consumption behaviour to their specific product. By reflecting on the language, religion, demography, climate, values and beliefs, education, labour, roles of women, family, ethnic groups and other similar elements, the international business person will be able to, not only participate in the international economy with a better perception of the situation, but also be able...
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...ISSUES BUSN 427 Global Issues in Business – Complete Course Homework Case Analysis – Weeks 1, 2, 3, 5, 6 Two options for course project – Starbucks Entry into India or on Burlington Coat Factory All 7 Weeks Discussions Final Exam – Week 8 w1 dq1 – Identifying Global Business Opportunities w1 dq2 – Differences in Political Economy and Culture w2 dq1 – Ethics in International Business w2 dq2 – Theory and Political Economy in International Trade w3 dq1 – FDI and Political Ideology w3 dq2 – Regional Economic Integration w4 dq1 – Foreign Exchange Markets – PPP w4 dq2 – The International Monetary System – IMF BUSN 427 ENTIRE COURSE GLOBAL ISSUES To purchase this visit following link: http://www.activitymode.com/product/busn-427-entire-course-global-issues/ Contact us at: SUPPORT@ACTIVITYMODE.COM BUSN 427 ENTIRE COURSE GLOBAL ISSUES BUSN 427 Global Issues in Business – Complete Course Homework Case Analysis – Weeks 1, 2, 3, 5, 6 Two options for course project – Starbucks Entry into India or on Burlington Coat Factory All 7 Weeks Discussions Final Exam – Week 8 w1 dq1 – Identifying Global Business Opportunities w1 dq2 – Differences in Political Economy and Culture w2 dq1 – Ethics in International Business w2 dq2 – Theory and Political Economy in International Trade w3 dq1 – FDI and Political Ideology w3 dq2 – Regional Economic Integration w4 dq1 – Foreign Exchange Markets – PPP w4 dq2 – The International Monetary System – IMF BUSN 427 ENTIRE COURSE...
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...Chapter 02 National Differences in Political Economy True / False Questions 1. A country's political economy and culture are independent of each other. True False 2. It is not possible to have democratic societies that emphasize a mix of collectivism and individualism. True False 3. The communists believed that socialism could be achieved by democratic means, and turned their backs on violent revolution and dictatorship. True False 4. In an individualist society, the welfare of society is best served by letting people pursue their own economic self-interest. True False 5. The central message of collectivism is that individual economic and political freedoms are the ground rules on which a society should be based. True False 6. There is a global trend of societies shifting from individualism toward collectivism. True False 7. It is possible to have a democratic state where collective values predominate. True False 8. It is possible to have a totalitarian state that is hostile to collectivism and where some degree of individualism is encouraged. True False 9. The most practical form of democracy is direct democracy. True False 10. Most modern democratic states practice representative democracy. True False 11. In a market economy, if demand for a product exceeds supply, prices will rise, signaling to producers to produce more. True False ...
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...National Differences in Political Economy Learning objectives • Understand how the political systems of countries differ. • Understand how the economic systems of countries differ. • Understand how the legal systems of countries differ. • Be able to explain what determines the level of economic development of a nation. • Discuss the macro-political and economic changes taking place worldwide. • Describe how transition economies are moving towards market based systems. • Articulate the implications for management practice of national differences in political economy. This chapter discusses differences in national political, economic, and legal systems, highlighting the ways in which managers in global settings need to be sensitive to these differences. Political differences are described along two dimensions: collectivist vs. individualist and democratic vs. totalitarian. Economic systems are explored in terms of market characteristics: market economies, command economies, and mixed economies. Legal systems are discussed in terms of the protections they offer for business: intellectual property, product safety, liability and contracts. The opening case explores the political and economic situation in Venezuela since Hugo Chavez was elected president in 1998. The closing case describes the challenges facing Indonesia, a vast country populated mainly by Muslims that stretches over 17,000 islands. Indonesia...
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...research, environmental influence is the key to understanding one country’s accounting system. "To a large extent, accounting is a product of its environment. That is, it is shaped by, reflects, and reinforces particular characteristics unique to its national environment" (Radebaugh and Gray 1997). From the late 1960s, researchers in international accounting have tried to categorize countries according to a series of criteria, which have been developed on a deductive or conductive basis. These criteria tried to explain the reasons for accounting differences between countries; they aimed to describe and compare different systems with each other in an efficient way. There are several advantages to categorize and analyze the differences among countries: First, it promotes improved understanding of the complex realities of accounting practices, as well as the factors that shape a country’s accounting regulations; Second, it provides useful information for solving some of the important accounting problems that exist in the world. For example, it can help policymakers assess the prospects and problems of international harmonization; Third, it can assist in the training of accountants and auditors who operate internationally; And finally, it can enable a developing country to better understand the available and appropriate types of financial reporting by seeing other countries’ use of particular systems. By looking at other countries in its group it is possible to predict the problems...
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...International Business Environment BE2501 – Summary Chapter 1 Globalization – refers to the shift toward a more integrated and interdependent world economy. Globalization of markets – refers to the merging of historically distinct and separate national markets into one huge global marketplace. Globalization of products – refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labor, energy, land and capital) General Agreement on Tariffs and Trade (GATT) World Trade Organization (WTO) – is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in the trade treaties signed by WTO member states. International Monetary Fund (IMF) and the World Bank (WB) were both created in 1944 by 44 nations that met at Bretton Woods, New Hampshire. The IMF was established to maintain order in the international monetary system; The WB was set up to promote economic development. United Nations (UN) – was established on October 24, 1945, by 51 countries committed to persevering peace through international cooperation and collective security. International trade occurs when a firm exports goods or services to consumers in another country. Foreign Direct Investment (FDI) occurs when a firm invests resources in business activities outside its home country. Stock of foreign direct investment – refers...
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...Historically, the centralized structure established by the Australian Constitution in 1901, distributes power between a federal government (The Commonwealth) and six States, (Hellenic Australian Business Council, 2015). Conventionally, with a survey exposing Australia ranked 11th most democratic among 150 others in 2014, (The World Audit, 2014). Sainsbury’s benefit from the safety and freedom assured for if they decided to invest in the Australian market, as Hill also inferred that democracy impacts the business...
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...Chapter 2: The Political, Legal, and Technological Environment Learning Objectives and Chapter Summary |1. |INTRODUCE the basic political systems that characterize regions and countries around the world and offer brief examples of | | |each and their implications for international management. | | | | | |The global political environment can be understood via an appreciation of ideologies and political systems. Ideologies, | | |including individualism and collectivism, reflect underlying tendencies in society. Political systems, including democracy| | |and totalitarianism, incorporate the ideologies into political structures. There are fewer and fewer purely collectivist or| | |socialist societies, although totalitarianism still exists in several countries and regions. Many countries are | | |experiencing transitions from more socialist to democratic systems, reflecting related trends discussed in Chapter 1 toward| | |more market-oriented economic systems. | |2. |PRESENT an overview of the legal and regulatory environment in which MNCs operate worldwide, and highlight differences in | | |approach to different legal and regulatory...
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...FACTORS AFFECTING BUSINESS ENVIRONMENT SUBMITTED BY: AAYUSH VERMA INTRODUCTION A business firm is an open system. It gets resources from the environment and supplies its goods and services to the environment. There are different levels of environmental forces. Some are close and internal forces whereas others are external forces. External forces may be related to national level, regional level or international level. These environmental forces provide opportunities or threats to the business community. Every business organization tries to grasp the available opportunities and face the threats that emerge from the business environment. The term business ‘typically’ refers to the development and processing of economic values in society. Normally, the term is applied to portion of economic activities whose primary purpose is to provide goods and services for society in an effective manner. It is also applied to economics and commercial activities of institutions which having other purposes. Business may be defined as “the organised effort by individuals to produce goods and services to sell these goods and services in a market place and to reap some reward for this effort.” Functionally, we may define business as “those human activities which involves production or purchase of goods with the object of selling them at a profit margin”. Business organizations cannot change the external environment but they just react. They change their internal business components (internal...
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