The document discusses how political factors can impact international business and marketing. It outlines different types of government systems and policies that may affect stability, such as changes in political parties or nationalism. Political risks like sanctions, activism, or violence are also examined. The document advises assessing country-specific political risks and taking steps to lessen vulnerability, like forming joint ventures or increasing domestic involvement.
Political forces affecting international businessMis bah
Political Forces : Affecting international business
1. Ideological forces
2. Government ownership of business
3. Privatization
4. Government stability
5. Country-Asset risk analysis
4
Political and Regulatory Climate
Learning ObjectivesList and explain the political motivations behind government actions that promote or restrict international marketing. Identify pressure groups that affect international marketing. Discuss specific government actions salient to international marketing, such as boycotts and takeovers. List and compare the four basic legal traditions that marketers encounter worldwide. Cite examples illustrating how national laws can vary and change. Differentiate between the steps involved in managing political risk and those involved in planning for regulatory change.
Chapter OverviewHost country political climateHost government actionsHome country political forcesLegal environmentsNational regulatory environmentsManaging political riskGlobal marketing and terrorism
*
Self-preservationSecurityProsperityPrestigeIdeologyCultural identity
Political Motivations of Host Countries
*
Host Country ActionsGovernment subsidiesOwnership restrictionsOperating conditions
Work permits
Local content requirements
*
TakeoversTakeovers = Host-government actions that result in a firm’s loss of ownership or direct controlAn expropriation is a formal seizure of an operationA confiscation is an expropriation without compensation
*
Home Country ActionsGuided by the same six interests as host countries
U.S. embargo of Cuba
U.S. anti-Arab boycott legislationOften home countries seek multilateral actions to increase their bargaining power
*
Legal EvolutionProduct liabilityBankruptcyRegulating cyberspace
*
Human Nature Orientation (HNO)Positive HNO – assume people can be trusted to obey the rules
Negative HNO – assume people cannot be trusted to obey the rules
*
Attitudes Toward RulesAttitudes toward rules are affected by two criteria:
Level of power distance
Type of human nature orientation
*
Managing Regulatory Change
Alter
Bargain to get government to change regulations
Avoid
Move to bypass the impact of the regulation
Accede
Comply
Ally
Avoid some risks by seeking strategic alliances
*
Political Risk
Political risk is the possibility that an unexpected and drastic change due to political forces will result in adverse circumstance for business operations
*
Regulatory Change Versus Political Risk Regulatory Change
More moderate and predictable changes in the business environment Political risk
More unexpected and drastic changes
*
Managing Political RiskFighting the battle on two fronts:
Perfect intelligence systems to avoid being caught unaware when changes disrupt operations
Develop risk-reducing strategies that help limit their exposure, or the losses they would sustain, should a sudden change occur
*
Terrorism Affects
International MarketingStarbucks pulled out of Israel because they feared a terrorist attackGE criticized by a senator for taking “blood money” from a state that supports terrorism (Iran)Global tourism and education .
Political forces affecting international businessMis bah
Political Forces : Affecting international business
1. Ideological forces
2. Government ownership of business
3. Privatization
4. Government stability
5. Country-Asset risk analysis
4
Political and Regulatory Climate
Learning ObjectivesList and explain the political motivations behind government actions that promote or restrict international marketing. Identify pressure groups that affect international marketing. Discuss specific government actions salient to international marketing, such as boycotts and takeovers. List and compare the four basic legal traditions that marketers encounter worldwide. Cite examples illustrating how national laws can vary and change. Differentiate between the steps involved in managing political risk and those involved in planning for regulatory change.
Chapter OverviewHost country political climateHost government actionsHome country political forcesLegal environmentsNational regulatory environmentsManaging political riskGlobal marketing and terrorism
*
Self-preservationSecurityProsperityPrestigeIdeologyCultural identity
Political Motivations of Host Countries
*
Host Country ActionsGovernment subsidiesOwnership restrictionsOperating conditions
Work permits
Local content requirements
*
TakeoversTakeovers = Host-government actions that result in a firm’s loss of ownership or direct controlAn expropriation is a formal seizure of an operationA confiscation is an expropriation without compensation
*
Home Country ActionsGuided by the same six interests as host countries
U.S. embargo of Cuba
U.S. anti-Arab boycott legislationOften home countries seek multilateral actions to increase their bargaining power
*
Legal EvolutionProduct liabilityBankruptcyRegulating cyberspace
*
Human Nature Orientation (HNO)Positive HNO – assume people can be trusted to obey the rules
Negative HNO – assume people cannot be trusted to obey the rules
*
Attitudes Toward RulesAttitudes toward rules are affected by two criteria:
Level of power distance
Type of human nature orientation
*
Managing Regulatory Change
Alter
Bargain to get government to change regulations
Avoid
Move to bypass the impact of the regulation
Accede
Comply
Ally
Avoid some risks by seeking strategic alliances
*
Political Risk
Political risk is the possibility that an unexpected and drastic change due to political forces will result in adverse circumstance for business operations
*
Regulatory Change Versus Political Risk Regulatory Change
More moderate and predictable changes in the business environment Political risk
More unexpected and drastic changes
*
Managing Political RiskFighting the battle on two fronts:
Perfect intelligence systems to avoid being caught unaware when changes disrupt operations
Develop risk-reducing strategies that help limit their exposure, or the losses they would sustain, should a sudden change occur
*
Terrorism Affects
International MarketingStarbucks pulled out of Israel because they feared a terrorist attackGE criticized by a senator for taking “blood money” from a state that supports terrorism (Iran)Global tourism and education .
6 The Political Environment A CRITICAL CONCERNCHAPTER OUTLINE.docxevonnehoggarth79783
6: The Political Environment: A CRITICAL CONCERN
CHAPTER OUTLINE
Global Perspective: World Trade Goes Bananas
The Sovereignty of Nations
Stability of Government Policies
Forms of Government
Political Parties
Nationalism
Targeted Fear and/or Animosity
Trade Disputes
Political Risks of Global Business
Confiscation, Expropriation, and Domestication
Economic Risks
Political Sanctions
Political and Social Activists and Nongovernmental Organizations
Violence, Terrorism, and War
Cyberterrorism and Cybercrime
Assessing Political Vulnerability
Politically Sensitive Products and Issues
Forecasting Political Risk
Lessening Political Vulnerability
Joint Ventures
Expanding the Investment Base
Licensing
Planned Domestication
Political Bargaining
Political Payoffs
Government Encouragement
CHAPTER LEARNING OBJECTIVES
What you should learn from Chapter 6:
•What the sovereignty of nations means and how it can affect the stability of government policies
•How different governmental types, political parties, nationalism, targeted fear/animosity, and trade disputes can affect the environment for marketing in foreign countries
•The political risks of global business and the factors that affect stability
•The importance of the political system to international marketing and its effect on foreign investments
•The impact of political and social activists, violence, and terrorism on international business
•How to assess and reduce the effect of political vulnerabililty
•How and why governments encourage foreign investment
Global Perspective: WORLD TRADE GOES BANANAS
Rather than bruising Chiquita Bananas, the wrath of politics instead has hammered Prosciutto di Parma ham from Italy, handbags from France, and bath oils and soaps from Germany. These and a host of other imported products from Europe were all slapped with a 100 percent import tariff as retaliation by the U.S. government against European Union banana-import rules that favor Caribbean bananas over Latin American bananas. Keep in mind that no bananas are exported from the United States, yet the United States has been engaged in a trade war over the past seven years that has cost numerous small businesses on both sides of the Atlantic millions of dollars. But how can this be, you ask? Politics, that’s how!
One small business, Reha Enterprises, for example, sells bath oil, soaps, and other supplies imported from Germany. The tariff on its most popular product, an herbal foam bath, was raised from 5 percent to 100 percent. The customs bill for six months spiraled to $37,783 from just $1,851—a 1,941 percent tax increase. For a small business whose gross sales are less than $1 million annually, it was crippling. When Reha heard of the impending “banana war,” he called everyone—his congressperson, his senator, the United States Trade Representative (USTR). When he described his plight to the USTR, an official there expressed amazement. “They were surprised I was still importing,” because they thought the tariff woul.
Political risk is the risk that arises out of uncertainty and instability within the government framework or political institutions in a country.
To know more about it, refer to the following article:
https://efinancemanagement.com/investment-decisions/political-risk
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
6 The Political Environment A CRITICAL CONCERNCHAPTER OUTLINE.docxevonnehoggarth79783
6: The Political Environment: A CRITICAL CONCERN
CHAPTER OUTLINE
Global Perspective: World Trade Goes Bananas
The Sovereignty of Nations
Stability of Government Policies
Forms of Government
Political Parties
Nationalism
Targeted Fear and/or Animosity
Trade Disputes
Political Risks of Global Business
Confiscation, Expropriation, and Domestication
Economic Risks
Political Sanctions
Political and Social Activists and Nongovernmental Organizations
Violence, Terrorism, and War
Cyberterrorism and Cybercrime
Assessing Political Vulnerability
Politically Sensitive Products and Issues
Forecasting Political Risk
Lessening Political Vulnerability
Joint Ventures
Expanding the Investment Base
Licensing
Planned Domestication
Political Bargaining
Political Payoffs
Government Encouragement
CHAPTER LEARNING OBJECTIVES
What you should learn from Chapter 6:
•What the sovereignty of nations means and how it can affect the stability of government policies
•How different governmental types, political parties, nationalism, targeted fear/animosity, and trade disputes can affect the environment for marketing in foreign countries
•The political risks of global business and the factors that affect stability
•The importance of the political system to international marketing and its effect on foreign investments
•The impact of political and social activists, violence, and terrorism on international business
•How to assess and reduce the effect of political vulnerabililty
•How and why governments encourage foreign investment
Global Perspective: WORLD TRADE GOES BANANAS
Rather than bruising Chiquita Bananas, the wrath of politics instead has hammered Prosciutto di Parma ham from Italy, handbags from France, and bath oils and soaps from Germany. These and a host of other imported products from Europe were all slapped with a 100 percent import tariff as retaliation by the U.S. government against European Union banana-import rules that favor Caribbean bananas over Latin American bananas. Keep in mind that no bananas are exported from the United States, yet the United States has been engaged in a trade war over the past seven years that has cost numerous small businesses on both sides of the Atlantic millions of dollars. But how can this be, you ask? Politics, that’s how!
One small business, Reha Enterprises, for example, sells bath oil, soaps, and other supplies imported from Germany. The tariff on its most popular product, an herbal foam bath, was raised from 5 percent to 100 percent. The customs bill for six months spiraled to $37,783 from just $1,851—a 1,941 percent tax increase. For a small business whose gross sales are less than $1 million annually, it was crippling. When Reha heard of the impending “banana war,” he called everyone—his congressperson, his senator, the United States Trade Representative (USTR). When he described his plight to the USTR, an official there expressed amazement. “They were surprised I was still importing,” because they thought the tariff woul.
Political risk is the risk that arises out of uncertainty and instability within the government framework or political institutions in a country.
To know more about it, refer to the following article:
https://efinancemanagement.com/investment-decisions/political-risk
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
Although discipline is not a one-size-fits-all approach, it can help create a work environment that encourages personal growth and accountability rather than solely relying on punitive measures.
In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
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Explore the world of the Taurus zodiac sign. Learn about their stability, determination, and appreciation for beauty. Discover how Taureans' grounded nature and hardworking mindset define their unique personality.
[Note: This is a partial preview. To download this presentation, visit:
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Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
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LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
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6. Chapter Learning Objectives
• What the sovereignty of nations means and how it can affect the
stability of government policies
• How different governmental type, political parties, nationalism,
targeted fear/animosity, and trade disputes can affect the
environment for marketing in foreign countries
• The political risks of global business and the factors that affect
stability
• The importance of the political system to international marketing
and its effect on foreign investments
• The impact of political and social activists, violence, and terrorism
on international business
• How to assess and reduce the effect of political vulnerability
• How and why governments encourage foreign investment
7. Global Perspective
• One of the most undeniable and crucial realities of
international business is that both host and home
governments are integral partners.
• A government controls and restricts a company’s
activities by encouraging and offering support or by
discouraging and banning or restricting its activities.
• International law recognizes the sovereign right of a
nation to grant or withhold permission to do business
within its political boundaries and to control where its
citizens conduct business.
8. Stability of Government Policies
• Issues that can affect the stability of a government:
- Radical shifts in government philosophy when an opposing
political party ascends to power.
- Pressure from nationalist and self-interest groups.
- Weakened economic conditions
- Bias against foreign investment
- Conflicts between governments
• Five main political causes of instability in international markets:
- Some forms of government seem to be inherently unstable
- Changes in political parties during elections can have major effects
on trade conditions
- Nationalism
- Animosity targeted toward specific countries
- Trade disputes themselves
9. Political Parties
• In countries where two strong political parties typically
succeed one another in control of the government, it is
important to know the direction each party is likely to
take.
- Great Britain
• The Labour Party Vs. The Conservative Party
• Unpredictable and drastic shifts in government policies
deter investments, whatever the cause of the shift.
• A current assessment of political philosophy and
attitudes within a country is important in gauging the
stability and attractiveness of a government in terms of
market potential.
10. Nationalism
• Nationalism is an intense feeling of national pride
and unity, an awakening of a nation’s people to pride
in their country.
• National interest and security are more important
than international relations.
• The more a country feels threatened by some outside
force or as the domestic economy declines, the more
nationalistic it becomes in protecting itself against
intrusions.
• Nationalism comes and goes as conditions and
attitudes change, and foreign companies welcomed
today may be harassed tomorrow and vice versa.
11. Examples of Political Risks
• Domestication- Local
content in…..
• Expropriation
• Confiscation
• Campaigns against foreign
goods
• Mandatory labor benefits
legislation
• Civil wars
• Inflation
• Labor issues such as stop
work etc
• Kidnappings, terrorist
threats, and other forms of
violence
• Repatriation
• Currency devaluations
• Increased taxation
• Tariffs
• Standards
• Quotas
12. Political Sanctions
• One or a group of nations may boycott another nation,
thereby stopping all trade between the countries, or may
issue sanctions against the trade of specific products.
- U.S. boycotts of trade with Cuba/Iran
• History indicates that sanctions are often unsuccessful in
reaching desired goals, particularly when other major
nations’ traders ignore them.
13. Political and Social Activists
• Not usually officially sanctioned by the government
• Can interrupt the normal flow of trade
• Can range from those who seek to bring about peaceful
change to those who resort to violence and terrorism to
effect change.
- Worldwide boycott of Nestle products
• The Internet has become an effective tool of PSAs to
spread the word on whatever cause they sponsor.
- Protest rallies against the U.S. – Iraq War
14. Politically Sensitive Products and Issues
• Products that have or are perceived to have an effect on
the environment, exchange rates, national and economic
security, and the welfare of people and that are publicly
visible or subject to public debate, are more likely to be
politically sensitive.
• Health is often the subject of public debate, and products
that affect or are affected by health issues can be
sensitive to political concern.
• The European Union has banned hormone treated beef
for more than a decade.
15. Forecasting Political Risk
• Political risk assessment is an attempt to forecast political
instability to help management identify and evaluate political
events and their potential influence on current and future
international business decisions.
• The greater the risk to international marketers is the threat of
the government actually failing, causing chaos in the streets
and markets.
• Risk assessment is used to estimate the level of a risk a
company is assuming when making an investment and to help
determine the amount of risk it is prepared to accept.
16. Basic Country Knowledge
•Is the country a democracy or dictatorship?
•Does country rely on free market or
government controls?
•Does government view foreign firms as
positive influence?
•Are firm’s customers private or public?
•Does government act arbitrarily?
•Is existing government stable?
17. Top 20 States in Danger of Failing
• Insert Exhibit 6.4
18. Lessening Political Vulnerability
• Relations between governments and MNCs are generally
positive if the investment:
- Improves the balance of payments by increasing
exports or reducing imports through import
substitution
- Uses locally produced resources
- Transfers capital, technology, and/or skills
- Create jobs
- Make tax contributions
• Political parties seeking publicity or scapegoats for their
failure often serve their own interests by focusing public
opinion on the negative aspects of MNCs whether true or
false.
19. Lessening Political Vulnerability (continued)
• Strategies that MNCs use to minimize political
vulnerability and risk:
- Joint ventures
- Expanding the investment base
- Licensing
- Planned domestication
- Political bargaining
- Political payoffs
20. Summary
• The foreign firm must strive to make its activities politically acceptable
or it may be subjected to a variety of politically condoned harassment.
• The foreign marketer frequently faces the problem of uncertainty of
continuity in government policy.
• As governments change political philosophies, a marketing firm
accepted under one administration might find its activities undesirable
under another.
• An unfamiliar or hostile political environment does not necessarily
preclude success for a foreign marketer if the company becomes a local
economic asset and responds creatively to the issues raised by political
and social activities.
• If a company is considered vital to achieving national economic goals,
the host country often provides an umbrella of protection not extended
to others.