Political Legal Economic Wild Card 100 100 100 100 200 200 200 200 300 300 300 300 400 400 400 400 500 500 500 500 600 600 600 600 700 100 • Give me two characteristics of a democracy Freedom of opinion, expression, press and freedom to organize Elections in which voters decide who is to represent them Limited terms for elected officials An independent and fair court system, with high regard for individual rights and property A nonpolitical bureaucracy and defense infrastructure An accessibility to the decision-making process 200 This is a form of government in which one person or political party exercises absolute control over all spheres of life. • Totalitarian – also known as dictator, monarch or communist regime 300 • Political systems can range from totalitarianism to democracy. List a country on each side of the continuum. • Totalitarian • North Korea • China Democracy U.S. New Zealand 400 • List two things that increase a country’s political risk • • • • • • Corruption Increase in terrorism War History of political problems Poor economy Totalitarianist government 500 Daily Double • List one way a company can manage political risk. • • • • • Good corporate citizen Use a local partner Involve the gov’t Research the country and stay aware Keep assets out of foreign country 600 • Define “expropriate” • Gov’t takes assets and pays you for them 100 List two types of legal systems. Systems include: common law, civil law, Islamic law, mixed systems, customary law 200 • This is the least preferred method of dealing with an international dispute between businesses. • Litigation 300 What kinds of cases are heard by the International Court of Justice? Disputes between governments 400 Daily Double • What is Islamic Law is based on? • Koran, which is the holy text of the religion 500 List one method of alternative dispute resolution. Arbitration, Mediation, Conciliation 600 • What type of clause can help decide which legal system will be used in a dispute between companies from different countries • Jurisdictional clause 700 • Which law follows U.S. businesspeople as they work internationally? • Foreign Corrupt Practices Act • National Security laws • Antitrust laws 100 Who controls the prices of goods and services in a command economy? Government Buyers and sellers control the prices in a market economy 200 In a pure _________ economy, all productive activities are privately owned, as opposed to being owned by the state. Market or capitalist 300 • What are other names for the market and command economic systems? • Market = capitalist • Command = communist 400 • This type of economic system is also known as socialism. • Mixed 500 What is the trend today in economic systems? Toward market systems 600 • This is the process of transferring government owned and operated entities to private individuals. • Privatization 100 The three most common types of economic systems are: a. collective, productive, and capitalistic b. communism, socialism, and political c. market, command, and political d. market, command, and mixed D 200 • What is the difference between arbitration and conciliation? • Both use an independent third party to give a ruling on a case. Conciliation is nonbinding, meaning the parties don’t have to follow the decision. Arbitration is binding, so parties have to follow the decision. 300 • Why do businesses care about a country’s political environment? • Governments set the rules and regulations by which businesses must operate. They also can affect a company’s ability to operate. 400 • What makes a country have high political risk? • War, violence, poor economy, totalitarian government, lack of freedom for the people, corruption, history of political risk 500 • List three potential political risks that a business can face in a foreign country. • Expropriation, confiscation, domestication, violence, exchange controls, local content laws, labor laws 600 • Ultimately, what is the best environment for economic development? (include the political, economic, and legal perspective) • Democratic political system • Market economy • Strong property rights in legal system Final Jeopardy • What do businesses most hope for in a country’s political, economic and legal system?