D r . P o p p y S . W i n a n t i

INTERNATIONAL POLITICAL

ENVIRONMENT

E m a i l : p o p p y s w @ u g m . a c . i d

W e b s i t e : h t t p : / / p o p p y s w . s t a f f . u g m . a c . i d

MM UGM – 21 March 2014

OVERVIEW

• Understanding business

environment

• External environments of

Business

• Changing profile of the

global business

environment

• Transforming events

• Understanding

globalisation

• Group assignment

UNDERSTANDING BUSINESS ENVIRONMENT

• Environment is the total of several external and

internal forces that affects the functions of

business.

• Every business organisation principally consists of

internal environment factors and set of external

environmental factors.

• Environment factors influence to business directly

and indirectly that control, manage and

administration of business activities in the

organisation.

(Hirriyapa, 2008)

THE EXTERNAL ENVIRONMENTS OF BUSINESS

• External Environment

– Everything outside an organization’s boundaries that might affect it • The domestic business environment

• The global business environment

• The technological environment

• The political environment

• The sociocultural environment

• The economic environment

• The legal/regulatory environment

(Ebert & Griffin, 2009; McKenna, n.d)

4

THE EXTERNAL ENVIRONMENTS OF BUSINESS (CONT.)

• Global Business Environment – The international forces that affect a business:

• International trade agreements

• International economic conditions

• Political unrest

• International market opportunities

• Suppliers

• Cultures

• Competitors

• Currency values

(Ebert & Griffin, 2009) 5

TRANSFORMING EVENTS (1)

6

TRANSFORMING EVENTS (2)

7

TRANSFORMING EVENTS (3)

8

CHANGING PROFILE OF THE GLOBAL BUSINESS ENVIRONMENT

Trade liberalisation

Technological development & innovation

Attitudes toward MNCs

International terrorism

Globalisation

9

(Fatehi, n.d; Rugman & Collison, 2009)

WHAT IS GLOBALISATION?

The globalisation scholars and the elephant (Steger, 2003)

10

WHAT IS GLOBALISATION?

Globalisation is "the process of social, political,

economic, cultural, and technological integration

among countries around the world”

(Hodgetts, et. al, 2006)

POLITICAL

• The extension of political power and political

activity across the boundaries of the modern

nation-state (Held, et.al: 1999)

• The principle of state sovereignty

• The growing impact of intergovernmental, international

non-governmental organizations, transnational pressure

groups , regional and global governance

• Global problems: terrorism, environmental problems

• Challenges the traditional distinctions between

the ‘domestic/international’, ‘inside/outside’,

‘territorial/non-territorial’

12

ECONOMIC

• The intensification and stretching of economic

interrelations across the globe (Steger, 2003)

• Transnational corporations

• International economic institutions

• Regional trading systems

• ‘It’s measured in respect of the growing intensity,

extensity, and velocity of world wide economic

interactions and interconnectedness from trade

through production and finance, to migration’

(McGrew, 2005)

13

CULTURAL: ‘AMERICANISATION’ OR

‘GLOCALISATION’?

• The intensification

and expansion of

cultural flows across

the globe (Steger,

2003)

• Homogenized

popular culture Vs.

Glocalisation

14

CULTURAL (2)

Global values

Local values

Hybrid

15

THE DRIVERS OF GLOBALISATION

(McKenna, n.d)

Development of new

technology

Reduced barriers to

trade

Search for competitive advantage

THE SUSTAINING FORCES OF GLOBALISATION

Greater policy liberalisation

Greater efficiency of

business

Greater market access

Increased flows of goods,

services, and people

(McKenna, n.d)

GROUP/INDIVIDUAL ASSIGNMENT

• Short essay on international political environment

• Based on an empirical study, analyse the impact of one of the following international political features for business activities : – international trade regulations

– technological innovation – globalisation (economic, political, cultural) – regional agreements

- greater policy liberalisation

- political unrest

- international terrorism, etc

18

ASSIGNMENT (CONT’D)

• Essay must focus on both opportunities and threats

posed by international political enviornment for

business activities

• The length of the essay is between 1.000 – 1.500

words (or 4 – 5 pages, Times New Roman, 12 fonts,

1,5 lines)

• Essay must be submitted on 10 April 2014

19