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1、ThePoliticalEnvironment:ACriticalConcernChapter6ChapterLearningObjectives1.Whatdoesthesovereigntyofnationsmeanandhowcanitaffectthestabilityofgovernmentpolicies,politicalpartiesandnationalism.2.Thepoliticalrisksofglobalbusinessandthefactorsthataffectstab
2、ility3.Theimportanceofthepoliticalsystemtointernationalmarketinganditseffectonforeigninvestments4.AssessingandreducingtheeffectofpoliticalvulnerabilityIntroductionThepoliticalenvironmentofcountriesisacriticalconcernfortheinternationalmarketerInternation
3、allawrecognizesthesovereignrightofanationtoallowordenyforeignfirmstoconductSovereigntyreferstoboththepowersexercisedbyastateinrelationtoothercountriesandthesupremepowersexercisedoveritsownmembersAsovereignstateisindependentandfreefromallexternalcontrol;
4、enjoysfulllegalequalitywithotherstates;andgovernsitsownterritoryStabilityofGovernmentPoliciesQ:Radicalshiftsingovernmentphilosophycanoccurwhen:AnopposingpoliticalpartyascendstopowerPressurefromnationalistandself-interestgroupsWeakenedeconomicconditions.
5、BiasagainstforeigninvestmentorconflictsbetweengovernmentsStabilityofGovernmentPoliciesThestabilityorinstabilityofprevailinggovernmentpoliciesisamajorconcernofforeignbusinessesAchangeingovernment,whetherbyelectionorcoup,doesnotalwaysmeanachangeinthelevel
6、ofpoliticalriskTheidealpoliticalclimateforamultinationalfirmtoconductbusinessisastable,friendlygovernmentBeknowledgeableaboutthephilosophiesofallmajorpoliticalpartiesandtheirattitudestowardstradeConversely,radicalchangesinpoliciestowardforeignbusinessca
7、noccurinthemoststablegovernmentsaswellNationalismNationalismreferstofeelingsofnationalprideandunityFeelingsofnationalismaremanifestedby:Callto“buyourcountry’sproductsonly,”e.g.,“BuyAmerican”Restrictionsonimports,restrictivetariffs,andotherbarrierstotrad
8、ePoliticalRisksofGlobalBusinessRisksofglobalbusinessinclude:Confiscation,Expropriation,andDomesticationEconomicRisks,andPriceControlsConfiscation,Expropriation,andDomesticationConfiscation,themostseverepoliticalrisk,istheseizingo
