Political Environment
International Business
Prepared By
Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114...
Political Environment
A political system is basically the
system of politics and
government in a country. It
governs a...
Political Environment
Authoritarian governments centralize
all control in the hands of one strong
leader or a small gro...
Political Environment
For example, the communist
countries had a centrally
planned economic system.
In most countries,...
Political Environment
Democracy is the most
common form of government
around the world today.
Democratic governments
...
Political Environment
What businesses must focus on is
how a country’s political system
impacts the economy as well as ...
Political Environment
1. How stable is the government?
2. Is it a democracy or a dictatorship?
3. If a new party comes ...
Example
China is one of the more visible
examples, with its strong
government and limited individual
rights. Chinese g...
Political Environment - International Business - Manu Melwin Joy
Political Environment - International Business - Manu Melwin Joy
Political Environment - International Business - Manu Melwin Joy
Political Environment - International Business - Manu Melwin Joy
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Political Environment - International Business - Manu Melwin Joy

A political system is basically the system of politics and government in a country. It governs a complete set of rules, regulations, institutions, and attitudes. A main differentiator of political systems is each system’s philosophy on the rights of the individual and the group as well as the role of government. Each political system’s philosophy impacts the policies that govern the local economy and business environment.
Published on: Mar 4, 2016
Published in: Education      
Source: www.slideshare.net


Transcripts - Political Environment - International Business - Manu Melwin Joy

  • 1. Political Environment International Business
  • 2. Prepared By Manu Melwin Joy Assistant Professor Ilahia School of Management Studies Kerala, India. Phone – 9744551114 Mail – manu_melwinjoy@yahoo.com Kindly restrict the use of slides for personal purpose. Please seek permission to reproduce the same in public forms and presentations.
  • 3. Political Environment A political system is basically the system of politics and government in a country. It governs a complete set of rules, regulations, institutions, and attitudes. A main differentiator of political systems is each system’s philosophy on the rights of the individual and the group as well as the role of government. Each political system’s philosophy impacts the policies that govern the local economy and business environment.
  • 4. Political Environment Authoritarian governments centralize all control in the hands of one strong leader or a small group of leaders, who have full authority. These leaders are not democratically elected and are not politically, economically, or socially accountable to the people in the country. Totalitarianism, a more extreme form of authoritarianism, occurs when an authoritarian leadership is motivated by a distinct ideology, such as communism. In totalitarianism, the ideology influences or controls the people, not just a person or party. Authoritarian leaders tend not to have a guiding philosophy and use more fear and corruption to maintain control.
  • 5. Political Environment For example, the communist countries had a centrally planned economic system. In most countries, apart from those laws that control investment and related matters, there are a number of laws that regulate the conduct of the business. These laws cover such matters as standards of products, packaging, promotion etc.
  • 6. Political Environment Democracy is the most common form of government around the world today. Democratic governments derive their power from the people of the country, either by direct referendum (called a direct democracy) or by means of elected representatives of the people (a representative democracy). Half of the world’s population lives in a democracy of some sort, although only some 14 percent reside in full democracies.
  • 7. Political Environment What businesses must focus on is how a country’s political system impacts the economy as well as the particular firm and industry. Firms need to assess the balance to determine how local policies, rules, and regulations will affect their business. Depending on how long a company expects to operate in a country and how easy it is for it to enter and exit, a firm may also assess the country’s political risk and stability. A company may ask several questions regarding a prospective country’s government to assess possible risks.
  • 8. Political Environment 1. How stable is the government? 2. Is it a democracy or a dictatorship? 3. If a new party comes into power, will the rules of business change dramatically? 4. Is power concentrated in the hands of a few, or is it clearly outlined in a constitution or similar national legal document? 5. How involved is the government in the private sector? 6. Is there a well-established legal environment both to enforce policies and rules as well as to challenge them? 7. How transparent is the government’s political, legal, and economic decision-making process?
  • 9. Example China is one of the more visible examples, with its strong government and limited individual rights. Chinese government control on the Internet, for example, has helped propel homegrown, Baidu, a Chinese search engine, which earns more than 73 percent of the Chinese search-engine revenues. Baidu self-censors and, as a result, has seen its revenues soar after Google limited its operations in the country