John Wiley & Sons, Inc c 1998 1

POLITICAL AND LEGAL ENVIRONMENT

Chapter Five

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Political and Legal EnvironmentChapter Five

• 1. Political Environment - Individual Govt

• 2. Political Environment - Social pressures and Political Risk

• 3. International Agreements• 4. International Law and Local Legal

Environment• 5. Issues Transcending National

Boundaries

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1. Political Environment - Individual Government

• Home Country vs Host Country• Structure of Government

– Ideology – Political Parties

• Government Policies and Regulations– National Security– Developing New Industries– Protecting Declining Industries

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1. Political Environment -Individual Government (cont)

• Incentives and Government Programs• Government Procurement• Trade Laws

– exhibit 5-1 Tariff and NonTariff Barriers

• Investment Regulations– Ownership Controls– Financial Controls

• Macroeconomic Policies

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2. Political Environment -Social Pressures and Political Risk

• Social pressures and Special Interests• Managing the Political Environment

– exhibit 5-2 Government Policy Areas and Instruments

• areas - monetary, fiscal, trade, foreign instrument, incomes, sectoral law

• instruments - legal, administrative, direct market operations

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2. Political Environment - Social Pressure and Political Risk (cont)

• Managing the Political Environment (cont)– exhibit 5-3 Country Risk Assessment

Criteria• Political and Economic Environment• Domestic Economic Conditions• External Economic Relations

– exhibit 5-4 Examples of Country Risk Ratings

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3. International Agreements

• G-7 (Group of Seven)• COCOM - Coordinating Committee for

Multilateral Controls

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4. International Law and Local Legal Environments

• International Law• Local Legal Systems and Laws

– Business Practices and the Legal System• exhibit 5-5 Legal Issues Facing the Company

– Types of Legal Systems– Examples of Different Laws

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4. International Law and Local Legal Environments (cont)

• Cultural Values and Legal Systems– exhibit 5-6 Number of Lawyers per 10000

Residents

• Jurisdiction– Planning Ahead– Arbitration and Enforcement

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5. Issues Transcending National Boundaries

• ISO 9000• Intellectual Property Protection

– Patent– Copyright– Trademark– Trade Secret

• Paris Convention• Berne Convention

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5. Issues Transcending National Boundaries (cont)

– exhibit 5-7 Ratings for the Level of Intellectual Property Protection in Various Countries

• Antitrust Laws of The United States• US Foreign Corrupt Practices Act of

1977