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© 2011 South-Western | Cengage Learning
Government and Global Business
4-14-1 Political Environment and Global Business
4-24-2 How Government Discourages Global Business
4-34-3 How Government Encourages Global Business
CHAPTER 4
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 2© 2011 South-Western | Cengage Learning
4LESSON 4-1
Political Environment and Global Business
GOALSGOALSDiscuss various political systems
around the world.Explain the political environment for
a company’s host and home countries.
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 3© 2011 South-Western | Cengage Learning
4
Types of Political Systems
Democracy—all citizens take part in making the rules that govern them
Totalitarianism—political control is held by one person or a small group
Mixed systems—characteristics of both systems
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 4© 2011 South-Western | Cengage Learning
4Political Relations with Host and Home Countries
Global companies operating in host countries
Global companies’ relationships with home countries
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 5© 2011 South-Western | Cengage Learning
4LESSON 4-2
How Government Discourages Global Business
GOALSGOALSDescribe 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.
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 6© 2011 South-Western | Cengage Learning
4Government Activities Influence Business
Laws that protect workers and consumersTrade barriers
TariffsQuotasBoycottsLicensing requirements
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 7© 2011 South-Western | Cengage Learning
4Political Risks in International Business
Trade sanctionsExpropriationEconomic nationalismCivil unrest or war
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 8© 2011 South-Western | Cengage Learning
4
International Taxes
Customs dutySales taxExcise taxPayroll-related taxValue-added tax (VAT)Income taxes
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 9© 2011 South-Western | Cengage Learning
4LESSON 4-3
How Government Encourages Global Business
GOALSGOALSExplain 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.
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 10© 2011 South-Western | Cengage Learning
4
Encouraging International Business
Free-trade zonesMost favored nation (MFN)Free-trade agreementsCommon markets
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 11© 2011 South-Western | Cengage Learning
4Government Protection from International Risk
Export-Import Bank of the United States (EXIM)
Overseas Private Investment Corporation (OPIC)
INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 12© 2011 South-Western | Cengage Learning
4
Tax Incentives
Corporate tax deduction on income earned by foreign subsidiaries
Double-taxation avoidance treatiesTax holiday