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LESSON 4-1 Political Environment and Global Business

GOALS. Discuss various political systems around the world. Explain the political environment for a company ’ s host and home countries. LESSON 4-1 Political Environment and Global Business. Types of Political Systems.

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LESSON 4-1 Political Environment and Global Business

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  1. GOALS Discuss various political systems around the world. Explain the political environment for a company’s host and home countries. LESSON 4-1Political Environment and Global Business 4

  2. Types of Political Systems • Political system-is the means by which people in a society make the rules that control and influence their lives. • Types of Political Systems: • Democracy • Totalitarianism • Mixed System 4

  3. Democracy • All citizens have the opportunity to take part in making the rules that govern them • Emphasizes importance of individuals wants and needs • Equal rights, right to vote, freedoms (speech and religion) • Extends to economic system freedom to own and operate your own business • Tend to have market economies • Ex. United States 4

  4. Totalitarianism • Most people are excluded from making the rules by which they live • Political control is held by one person or a small group of individuals • Monarchy and Dictatorship • People’s right and freedoms are restricted • People may not be able to travel outside of the country or to practice a religion of their choosing • Command Economies • Ex. Cuba and North Korea 4

  5. Mixed Systems • Most political systems are considered mixed • Characteristics that fall into both categories • Most European countries are mixed economies 4

  6. Political Relations with Host Countries • Host Country-is a country in which a multinational enterprise is a guest. Multinational enterprises fulfill a number of positive roles in host countries while operating within the existing economic, social, and legal environment. • Multinational enterprises simulate economic activity. They also: • Provide employment for the host country • Introduce advanced technology • Comply with societal expectations and responsibilities 4

  7. Political Relations with Host Countries Social responsibility-is the process whereby people function as good citizens and are sensitive to their surroundings. 4

  8. Political Relations with Home Countries Home country-is the country where a multinational enterprise is headquartered. A multinational enterprise is expected to comply with home country’s social, economic, and legal mandates. Host Country and Companies Each group of 3 will choose a company and research any host country compliances they must meet while operating there. 4

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