LESSON 4-1
Political Environment and Global Business
GOALS
SLIDE 1
• Discuss various political systems
around the world.
• Explain the political environment for a
company’s host and home countries.
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Types of Political Systems
• Political system-is the means by which people in a society
make the rules that control and influence their lives.
• Types of Political Systems:
– Democracy
– Totalitarianism
– Mixed System
SLIDE 2
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Democracy
• All citizens have the opportunity to take part in making the
rules that govern them
• Emphasizes importance of individuals wants and needs
• Equal rights, right to vote, freedoms (speech and religion)
• Extends to economic system freedom to own and operate
your own business
• Tend to have market economies
– Ex. United States
SLIDE 3
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Totalitarianism
• Most people are excluded from making the rules by which
they live
• Political control is held by one person or a small group of
individuals
• Monarchy and Dictatorship
• People’s right and freedoms are restricted
• People may not be able to travel outside of the country or to
practice a religion of their choosing
• Command Economies
– Ex. Cuba and North Korea
SLIDE 4
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Mixed Systems
• Most political systems are considered mixed
• Characteristics that fall into both categories
• Most European countries are mixed economies
SLIDE 5
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Political Relations with Host Countries
• Host Country-is a country in which a multinational enterprise
is a guest. Multinational enterprises fulfill a number of
positive roles in host countries while operating within the
existing economic, social, and legal environment.
• Multinational enterprises simulate economic activity. They
also:
– Provide employment for the host country
– Introduce advanced technology
– Comply with societal expectations and responsibilities
SLIDE 6
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Political Relations with Host Countries
Social responsibility-is the process whereby people function as
good citizens and are sensitive to their surroundings.
SLIDE 7
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Political Relations with Home
Countries
Home country-is the country where a multinational enterprise is
headquartered. A multinational enterprise is expected to comply
with home country’s social, economic, and legal mandates.
Host Country and Companies
Each group of 3 will choose a company and research any host
country compliances they must meet while operating there.
SLIDE 8
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