Ib chapter4

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Ib chapter4

  1. 1. 4-1 Political Environment and Global Business 4-2 How Government Discourages Global Business 4-3 How Government Encourages Global Business International Business Chapter 4 Government and Global Business [P.84-111]
  2. 2. <ul><li>Discuss various political systems around the world. </li></ul><ul><li>Explain the political environment for a company’s host and home countries. </li></ul>International Business Chapter 4-1 Political Environment & Global Business Goals Political Environment and Global Business
  3. 3. International Business A political system is a complete set of institutions, interest groups (such as political parties, trade unions, lobby groups), the relationships between those institutions and the political norms and rules that govern their functions (constitution, election law). Concept Chapter 4 -1 Political System Political Environment and Global Business
  4. 4. International Business Chapter 4-1 Political Environment and Global Business Politics = Power
  5. 5. HOW
  6. 6. Democracy (Rule by majority)
  7. 7. Comunism (Rule by all citizens) Classless with common ownership and decision making
  8. 8. Monarchy (Rule by monarch) Monarchies are one of the oldest political systems known. Brunei.
  9. 9. Islamic Democracy (Rule by majority in Islamic context) Combines aspects of Theocracy and Democracy.
  10. 10. Theocracy (Rule by representative of God) Iran.
  11. 11. Sultanate (Rule by Allah) Islamic political structure combining aspects of Monarchy and Theocracy. Oman.
  12. 12. Republic (Rule by law) Czech Republic
  13. 13. Anarchism (Rule by all/no one) Zimbawe 2007
  14. 14. Westminster system (rule by republic and representative democracy through parliament)
  15. 15. <ul><li>Totalitarianism—political control is held by one person or a small group </li></ul><ul><li>Mixed systems—characteristics of both systems </li></ul>(Rule by scientist/intellectuals) Let's play a bit
  16. 16. <ul><li>Totalitarianism—political control is held by one person or a small group </li></ul><ul><li>Mixed systems—characteristics of both systems </li></ul>(Rule by scientist/intellectuals) All citizens take part in making the rules that govern them Norway - Democracy
  17. 17. (Rule by scientist/intellectuals) Political control is held by one person or a small group North Korea - Totalitarianism
  18. 18. <ul><li>Mixed systems—characteristics of both systems </li></ul>(Rule by scientist/intellectuals) Political control is held by one person or a small group England - Mixed Systems
  19. 19. Anarchy Aristocracy Confederation Communist state Demarchy Democracy Direct democracy Representative democracy Despotism Dictatorship Military dictatorship Military junta Authoritarianism Totalitarianism Autocracy Empire Fascist state Federation Feudalism Gerontocracy Empire Fascist state Federation Feudalism Gerontocracy Green state Interregnum Caretaker government Interrex Provisional government Transitional government Kleptocracy Matriarchy Meritocracy Minarchism Monarchy Enlightened absolutism Absolute monarchy Constitutional monarchy Elective monarchy Hereditary monarchy Regency Nation-state Oligarchy Parliamentary Patriarchy Plutocracy Police state Polyarchy Presidential Puppet state Republic Socialist state Collective leadership Soviet Republic Supranational union Synarchy Technocracy Thalassocracy Theocracy Theodemocracy Timocracy Tribal Chiefdom Tyranny Unitary state Welfare state
  20. 20. International Business Chapter 4-1 Home and host countries Explained Political Relations with Host and Home Countries ultinational
  21. 21. International Business Chapter 4-1 Home and host countries Explained Political Relations with Host and Home Countries <ul><li>Global companies operating in host countries </li></ul><ul><li>Global companies’ relationships with home countries </li></ul>
  22. 22. International Business Chapter 4-1 Home and host countries Explained Political Relations with Host and Home Countries <ul><li>host countries </li></ul><ul><li>home countries </li></ul>
  23. 23. International Business Chapter 4-1 Home and host countries Explained Political Relations with Host and Home Countries <ul><li>host countries </li></ul><ul><li>home countries </li></ul>The country where the company is a guest The country where the company is headquartered
  24. 24. THINK Which is the image a HOME country gets when the multinational misbehaves in a HOST country?
  25. 26. International Business Chapter 4-1 Political Relations with Host and Home Countries Social Responsibility Concept Is the process whereby people function as good citizen and are sensitive to their surroundings
  26. 27. Concious Corporations
  27. 28. International Business Chapter 4-2 How Government Discourages Global Business <ul><li>Describe laws and trade barriers that can discourage global business. </li></ul><ul><li>Explain how political risks can disrupt global business activities. </li></ul><ul><li>Identify the major types of taxes that governments impose around the world. </li></ul>
  28. 29. International Business Chapter 4-2 Government Activities Influence Business <ul><li>Laws that protect workers and consumers </li></ul><ul><li>Trade barriers </li></ul><ul><ul><li>Tariffs </li></ul></ul><ul><ul><li>Quotas </li></ul></ul><ul><ul><li>Boycotts </li></ul></ul><ul><ul><li>Licensing requirements </li></ul></ul>
  29. 30. International Business Chapter 4-2 Government Activities Influence Business <ul><li>Laws that protect workers and consumers </li></ul>Occupational hazards (wearing a belt, hat, earplugs) Civil rights (Non discriminating jobs) Human rights (Not employing kids) Consumer protection (list ingridients) Forced vacations Etc. This changes by country
  30. 31. International Business Chapter 4-2 Government Activities Influence Business <ul><li>Laws that protect workers and consumers </li></ul>Some countries demand that a % of the employees got to be NATIONALS Some countries don’t allow woman to work Some countries impose severe rules. Example Venezuela and pregnant women.
  31. 32. International Business Chapter 4-2 Government Activities Influence Business <ul><li>Trade barriers </li></ul><ul><ul><li>Tariffs </li></ul></ul><ul><ul><li>Quotas </li></ul></ul><ul><ul><li>Boycotts </li></ul></ul><ul><ul><li>Licensing requirements </li></ul></ul>
  32. 33. International Business Chapter 4-2 Government Activities Influence Business Companies may feel discouraged to start business in other countries by all those rules and regulations.
  33. 34. The Walmart Effect
  34. 35. International Business Chapter 4-2 Political Risks in other countries <ul><li>Trade sanctions </li></ul><ul><li>Expropriation </li></ul><ul><li>Economic nationalism </li></ul><ul><li>Civil unrest or war </li></ul>
  35. 36. International Business Chapter 4-2 Political Risks in other countries
  36. 37. International Taxes <ul><li>Customs duty </li></ul><ul><li>Sales tax </li></ul><ul><li>Excise tax </li></ul><ul><li>Payroll-related tax </li></ul><ul><li>Value-added tax (VAT) </li></ul><ul><li>Income taxes </li></ul>International Business Chapter 4-2 Political Risks in other countries
  37. 38. <ul><li>Explain government actions that can encourage global business activities. </li></ul><ul><li>Discuss U.S. government agencies that can help reduce international risk. </li></ul><ul><li>Describe how tax incentives encourage global business. </li></ul>International Business Chapter 4-4 How Government Encourages Global Business
  38. 39. <ul><li>Free-trade zones </li></ul><ul><li>Most favored nation (MFN) </li></ul><ul><li>Free-trade agreements </li></ul><ul><li>Common markets </li></ul>International Business Chapter 4-4 Encouraging International Business
  39. 40. Government Protection from International Risk International Business Chapter 4-4 Encouraging International Business <ul><li>Export-Import Bank of the United States (EXIM) </li></ul><ul><li>Overseas Private Investment Corporation (OPIC) </li></ul>
  40. 41. Tax Incentives <ul><li>Corporate tax deduction on income earned by foreign subsidiaries </li></ul><ul><li>Double-taxation avoidance treaties </li></ul><ul><li>Tax holiday </li></ul>International Business Chapter 4-4 Encouraging International Business
  41. 42. Homework This is your final RESEARCH PAPER. Due on the Final Exam date. Sucel y Jessica Elizabeth y Yeni Zuri y Jorge Jose, Kirenia y Wilder Javier y Zulema Explore economic, geographic, political, and cultural influences on assigned region Brasil Central America Caribbean Central Europe China Follow instructions on page 106
  42. 43. Homework This will be your final RESEARCH PAPER. Due on Lilian y Dagoberto Gricel y Oreste Ninosca y Daikiel Juan y Yeni Omar y Belkys Johnathan e Ileana Humberto, Julio y Dyan South America Central America Caribbean Central Europe Central Asia Arab league Andean Countries Explore economic, geographic, political, and cultural influences on assigned region Follow instructions on page 106
  43. 44. http://www.slideshare.net/catherinemwilson/lecture-11-political-economic-systems-

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