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Ambientes Político y Legal
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International Business
Environments & Operations
14e
Daniels ● Radebaugh ● Sullivan
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Chapter 3
The Political and Legal Environments
Facing Business
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Learning Objectives To discuss the philosophy and practices of the
political environment To profile trends in contemporary political
systems To explain the idea of political risk and
approaches to managing it To discuss the philosophy and practices of the
legal system To describe trends in contemporary legal systems To explain legal issues facing international
companies
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IntroductionLearning Objective 1: To discuss the philosophy and practices of the political environment
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Introduction Every country has its own political and
legal environment Companies must determine where, when,
and how to adjust their business practices without undermining the basis for success
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IntroductionPolitical and Legal Factors Influencing International Business Operations
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The Political Environment
Managers evaluate, monitor, and forecast political environments
A country’s political system refers to the structural dimensions and power dynamics of its government that specify institutions, organizations, and interest groups, and define the norms that govern political activities
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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 A political ideology stipulates how
society ought to function and outlines the methods by which it will do so
Most modern societies are pluralistic different groups champion competing political
ideologies Democrats vs. Republicans in the United
States Democratic Party vs. Liberal Party in Japan
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Spectrum Analysis A political spectrum outlines the various
forms of political ideology Political freedom measures
the degree to which fair and competitive elections occur
the extent to which individual and group freedoms are guaranteed
the legitimacy ascribed to the general rule of law
the freedom of the press
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Spectrum AnalysisThe Political Spectrum
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Democracy In a democracy
all citizens are politically and legally equal all are equally entitled to freedom of thought,
opinion, belief, speech, and association all equally command sovereign power over
public officials Prominent types of democracy include
Representative Multiparty Parliamentary Social
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Totalitarianism A totalitarian system subordinates the
individual to the interests of the collective dissent is eliminated through indoctrination,
persecution, surveillance, propaganda, censorship, and violence
Prominent types of totalitarianism include Authoritarianism Fascism Secular Theocratic
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The Standard of Freedom Freedom House assesses political and civil
freedom around the world Freedom House recognizes three types of
political systems Free Partly free Not free
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The Standard of FreedomMap of Political Freedom, 2010
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Trends in Political Ideologies
Learning Objective 2: To profile trends in contemporary political systems
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Third Wave of Democratization
Third Wave of Democratization number of democracies doubled in two
decades Engines of Democracy
1. The failure of totalitarian regimes to deliver economic progress
2. Improved communications technology3. Economic dividends of increasing political
freedom
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Democracy: Recession and Retreat
Democracy’s retreat just 26 of the world’s democracies are full
democracies Engines of totalitarianism
Economic development Inconsistencies Economics problems Standards of democracy
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Democracy: Recession and RetreatFreedom in the World: Number of Electoral Democracies
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Democracy: Recession and Retreat
Freedom in the World: Gains and Declines
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Political Ideology and the MNE
What will the political map look like in the future? The Washington Consensus The Beijing Consensus The Clash of Civilizations
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Political RiskLearning Objective 3: To explain the idea of political risk and approaches to managing it
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Political Risk Political risk refers to the risk that
political decisions or events in a country negatively affect the profitability or sustainability of an investment
Types: Systemic Procedural Distributive Catastrophic
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Classifying Political Risk Characteristics of Political Risk
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The Legal EnvironmentLearning Objective 4: To discuss the philosophy and practices of the legal system
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The Legal Environment The legal system is the mechanism for
creating, interpreting, and enforcing the laws in a specified jurisdiction
Types: Common law Civil law Theocratic law Customary law Mixed systems
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The Legal EnvironmentThe Wide World of Legal Systems
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Trends in Legal SystemsLearning Objective 5:To describe trends in contemporary legal systems
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Trends in Legal Systems What is the basis of rule in a country?
The rule of man legal rights derive from the individual who
commands the power to impose them associated with a totalitarian system
The rule of law systematic and objective laws applied by
public officials who are held accountable for their administration
associated with a democratic system
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Trends in Legal SystemsThe Worldwide Distribution of the Rule of Law
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Legal Issues in IBLearning Objective 6: To explain legal issues facing international companies
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Operational Concerns Operational issues
Starting a business Entering and enforcing contracts Hiring and firing local workers Closing down the business
In general rich countries regulate less poor countries regulate more
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Strategic Concerns Strategic issues Country of origin and local content Marketplace behavior Product safety and liability Legal jurisdiction Intellectual property
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Intellectual Property: Rights and Protection
Intellectual property refers to creative ideas, expertise, or intangible insights that grant its owner a competitive advantage
Intellectual property rights refer to the right to control and derive the benefits from writing, inventions, processes, and identifiers no “global” patent, trademark or copyright
exists
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Intellectual Property: Rights and Protection
Attitudes towards intellectual property Legal legacies
rule of man versus rule of law Wealth, poverty, and protection
levels of economic development Cultural orientation
individualism versus collectivism
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