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POLITICAL SYSTEMS

Learn about democracy, totalitarianism, political ideologies, and the impact of political systems on management decisions and international business. Understand the causes of political risk and the implications for businesses operating in changing political climates.

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POLITICAL SYSTEMS

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  1. POLITICAL SYSTEMS • DEMOCRACY • TOTALITARIANISM

  2. DEMOCRACY • Presidential Form • Parliamentary System • Various Combinations

  3. Basic Political Ideologies • 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 • Civil liberties • Political rights include • Fair and competitive elections • Power for elected representatives • Ability to organize • Safeguards on rights of minorities

  4. TOTALITARIANISM • SECULAR • THEOCRATIC

  5. Basic Political Ideologies • Totalitarianism • In a totalitarian system, decision making is restricted to a few individuals • Theocratic totalitarianism is the form prevalent in Muslim countries. With secular totalitarianism, control is often enforced through military power • Communism is a form of secular totalitarianism that relates political and economic systems

  6. The Impact of the Political System on Management Decisions • There is a dichotomy between governmental control and consumer control of the political system and the economy • Managers need to understand the critical functions that a government performs in the economy • The political process affects international business through regulation of cross-border transactions

  7. Secular Totalitarianism • Fascism • Authoritarianism • Communism

  8. POLITICAL RISK • Changes in the Political Climate that might adversely affect business operations

  9. CAUSES of POLITICAL RISK • Opinions of Political Leadership • Civil Disorder • External Relations

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