publishing as Prentice Hall 3-2 Chapter Three The Political and Legal Environments Facing Business... publishing as Prentice Hall 3-3 • To discuss the philosophies and practices of a p
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International Business Environments and Operations, 13/
e
Part Two Comparative Environmental
Frameworks
3-1
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Chapter Three
The Political and Legal
Environments Facing
Business
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• 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
Chapter Objectives
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Political and Legal Factors
Influencing International Business
Operations
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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
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Individualism vs Collectivism
• Individualism: primacy of the rights and
role of the individual
• Collectivism: primacy of the rights and role
of the community
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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
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The Political Spectrum
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Fundamental Elements of
Democratic Political Systems
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Trends in Political Systems
1 The failure of totalitarian regimes to
deliver economic progress
2 Improved communications technology
3 Economic dividends of increasing
political freedom
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Definition of Political Risk
• The risk that political decisions or events
in a country negatively affect the
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Definition of a Legal System
• The mechanism for creating, interpreting, and enforcing the laws in a specified
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Trends in Legal Systems
• The preference for stability
• The influence of national legacies
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Operational Concerns that Face
Managers Worldwide
• Starting a business
• Entering and enforcing contracts
• Hiring and firing local workers
• Closing down the business
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• 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
Intellectual Property
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The Driver of Change
Countries that generate
intellectual property are
strong
advocates of protecting the
ownership rights.
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