ib chapter4

4-14-1 Political Environment and Global Business

4-24-2 How Government Discourages Global Business

4-34-3 How Government Encourages Global Business

InternationalBusinessChapter4

Government and Global Business[P.84-111]

Discuss various political systems around the world. Explain the political environment for a company’s

host and home countries.

InternationalBusinessChapter4-1Political Environment and Global Business

InternationalBusiness

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).

Chapter4-1Political Environment and Global Business

InternationalBusinessChapter4-1Political Environment and Global Business

Totalitarianism—political control is held by one person or a small group

Mixed systems—characteristics of both systems

Totalitarianism—political control is held by one person or a small group

Mixed systems—characteristics of both systems

All citizens take part in making the rules that govern them

Political control is held by one person or a small group

Political control is held by one person or a small group

Anarchy

Aristocracy

Confederation

Communist state

Demarchy

Democracy

Direct democracy

Representative democracy

Despotism

DictatorshipMilitary dictatorshipMilitary juntaAuthoritarianismTotalitarianismAutocracy

EmpireFascist stateFederationFeudalismGerontocracy

EmpireFascist stateFederationFeudalismGerontocracyGreen stateInterregnumCaretaker governmentInterrexProvisional governmentTransitional governmentKleptocracyMatriarchyMeritocracyMinarchismMonarchyEnlightened absolutismAbsolute monarchyConstitutional monarchyElective monarchyHereditary monarchyRegencyNation-stateOligarchyParliamentary

PatriarchyPlutocracyPolice statePolyarchyPresidentialPuppet stateRepublicSocialist stateCollective leadershipSoviet RepublicSupranational unionSynarchyTechnocracyThalassocracyTheocracyTheodemocracyTimocracyTribalChiefdomTyrannyUnitary stateWelfare state

InternationalBusinessChapter4-1Political Relations with Host and Home Countries

InternationalBusinessChapter4-1Political Relations with Host and Home Countries

•Global companies operating in host countries

•Global companies’ relationships with home countries

InternationalBusinessChapter4-1Political Relations with Host and Home Countries

•host countries

•home countries

InternationalBusinessChapter4-1Political Relations with Host and Home Countries

•host countries

•home countries

The country where the company is a guest

The country where the company is headquartered

Which is the image a HOME country gets when the multinational misbehaves in a HOST country?

InternationalBusinessChapter4-1Political Relations with Host and Home Countries

Is the process whereby people function as good citizen and are sensitive to their surroundings

InternationalBusinessChapter4-2How Government Discourages Global Business

Describe laws and trade barriers that can discourage global business.

Explain how political risks can disrupt global business activities.

Identify the major types of taxes that governments impose around the world.

InternationalBusinessChapter4-2Government Activities Influence Business

Laws that protect workers and consumers

Trade barriersTariffsQuotasBoycottsLicensing requirements

InternationalBusinessChapter4-2Government Activities Influence Business

Laws that protect workers and consumers

Occupational hazards (wearing a belt, hat, earplugs)

Civil rights (Non discriminating jobs)

Human rights (Not employing kids)

Consumer protection (list ingridients)

Forced vacations

Etc.

InternationalBusinessChapter4-2Government Activities Influence Business

Laws that protect workers and consumers

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.

InternationalBusinessChapter4-2Government Activities Influence Business

Trade barriersTariffsQuotasBoycottsLicensing requirements

InternationalBusinessChapter4-2Government Activities Influence Business

Companies may feel discouraged to start

business in other countries by all those rules and regulations.

InternationalBusinessChapter4-2Political Risks in other countries

•Trade sanctions•Expropriation•Economic nationalism•Civil unrest or war

InternationalBusinessChapter4-2Political Risks in other countries

InternationalBusinessChapter4-2Political Risks in other countries

International Taxes

Customs dutySales taxExcise taxPayroll-related taxValue-added tax (VAT)Income taxes

InternationalBusinessChapter4-4How Government Encourages Global Business

Explain government actions that can encourage global business activities.

Discuss U.S. government agencies that can help reduce international risk.

Describe how tax incentives encourage global business.

InternationalBusinessChapter4-4Encouraging International Business

Free-trade zonesMost favored nation (MFN)Free-trade agreementsCommon markets

InternationalBusinessChapter4-4Encouraging International Business

Government Protection from International Risk

Export-Import Bank of the United States (EXIM)

Overseas Private Investment Corporation (OPIC)

InternationalBusinessChapter4-4Encouraging International Business

Tax Incentives

Corporate tax deduction on income earned by foreign subsidiaries

Double-taxation avoidance treatiesTax holiday

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

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

http://www.slideshare.net/catherinemwilson/lecture-11-political-economic-systems-