Political Environment and System

Study Notes

A political system is a complete set of institutions, political organizations, and interest groups that integrate various parts of a society into a viable, functioning entity.
It influences the extent to which government intervenes in business and the way business is conducted both domestically and internationally.

Individualism champions the primacy of the individual over the group, whereas collectivism advocates the primacy of the group over the individual.
In an individualistic paradigm (e.g., United States, Canada, Australia, Italy), political officials and agencies play a limited role in society.
The relationship between government and business tends to be adversarial, with government intervening in the economy to deal with market defects, but generally promoting marketplace competition.
Laissez-faire is the concept that the government should not interfere in business affairs.

Under a collectivist paradigm, the government defines economic needs and priorities, and partners with business in major ways.
The government is highly connected to and interdependent with business, and the relationship is cooperative.
A collectivist outlook encourages the political system to develop regulations that promote social justice, labor rights, income equality, and workplace harmony.

A political ideology is the body of goals, theories, and aims that constitute a sociopolitical program.
Political ideologies can be analyzed using a spectrum, with democracy and totalitarianism as endpoints.
Understanding the ideals and means of democracy and totalitarianism helps interpret other ideologies.

Democracy and individualism are intrinsically related and mutually reinforcing.
Democratic government institutes personal and political rights, civil liberties, fair and free elections, and independent courts of law.
Different legacies shape the performance of democracy in a nation, leading to different types of democracies (e.g., multiparty, parliamentary, representative).
In modern democracies, political and economic freedoms are increasingly interconnected, supporting private enterprises, encouraging investments, and sustaining productive enterprises.