International Business: Political Risk and the Political Environment

Individualism in a political system emphasizes the importance of collective well-being over individual freedom.

Managers should evaluate politics and law to estimate risks to the profitability and sustainability of their operations.

The political system of a nation governs the process for making official government decisions.

Collectivism in a political system prioritizes individual freedom over community well-being.

A manager's evaluation of political risk is essential for ensuring both short-term profit and long-term sustainability of business activity.

The government protects individual liberties as long as those actions do not infringe upon the liberties of others.

The effectiveness of a country's governance structures has no impact on the level of risk associated with doing business in that country.

Cultural norms and social institutions have no influence on consumer behavior in international markets.

Financial systems, including banking sectors and capital markets, do not affect a company's ability to access financing or manage financial risks.

Competitive Product Strategy focuses solely on cost strategies and not on differentiation strategies.

Companies do not need to consider adapting to cultural differences when entering international markets.

The legal system of a country has no impact on the level of government intervention in business activities.

Countries like Australia, Canada, the Netherlands, and the United States have an individualistic orientation in shaping their marketplaces.

Collectivism in business emphasizes the priority of the individual over the collective.

Laissez-faire principle suggests that the government should heavily regulate business affairs.

Countries like Argentina and China encourage political systems that promote social equality and labor rights.

Individualism encourages making decisions that improve the welfare of the collective.

Political ideology outlines how society should govern itself and the methods to do so.