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  1. 1. Culture Environment Culture is an integrated system of learned behavior patterns that are characteristic of the members of any given society.
  2. 2. Elements of Social and Culture Language (verbal and nonverbal) Religion Values and Attitudes Manners and Customs Material Elements Aesthetics Education Social Institutions
  3. 3. Political Environment <ul><li>The Home-Country Perspective </li></ul><ul><li>Host Country Political and Legal Environment </li></ul>
  4. 4. The Home Country Perspective <ul><li>Major areas of governmental activity that are of concern to the international business manager: </li></ul><ul><ul><li>Embargoes and Sanctions </li></ul></ul><ul><ul><li>Export Controls </li></ul></ul><ul><ul><li>Regulation of International </li></ul></ul><ul><ul><li>Business Behavior </li></ul></ul>
  5. 5. Host Country <ul><li>Political Action and Risk </li></ul><ul><ul><li>Varies widely from country to country </li></ul></ul><ul><li>Economic Risk </li></ul><ul><ul><li>Less dangerous, but more common </li></ul></ul>
  6. 6. Three Types of Political Risk <ul><li>Ownership Risk </li></ul><ul><ul><li>Exposes property and life </li></ul></ul><ul><li>Operating Risk </li></ul><ul><ul><li>Interference with the ongoing operations of a firm </li></ul></ul><ul><li>Transfer Risk </li></ul><ul><ul><li>Limitations on the outflow of funds </li></ul></ul>
  7. 7. Political Risk May Involve <ul><li>Confiscation </li></ul><ul><ul><li>The government takeover of a firm without compensation to the owners. </li></ul></ul><ul><li>Expropriation </li></ul><ul><ul><li>A form of government takeover in which the firm’s owners are compensated. </li></ul></ul><ul><li>Domestication </li></ul><ul><ul><li>The government demands transfer of ownership and management responsibility. </li></ul></ul>
  8. 8. Economic Environment <ul><li>Economic Size </li></ul><ul><li>Economic Systems </li></ul><ul><li>Key Macroeconomic Indicators </li></ul><ul><li>Economies in Transition </li></ul>