Global Business Today 6th Canadian Edition PDF

GLOBAL BUSINESS TODAY Si...

GLOBAL BUSINESS TODAY Sixth Canadian Edition CHARLES W. L. HILL G. TOMAS M. HULT THOMAS McKAIG FRANK COTAE ©2021 McGraw-Hill Ryerson All rights reserved Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 1 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Part 2 Country Differences in Political Economy Mick Ryan/ Cultura RF/ Getty Images Chapter 2 Country Differences in Political Economy Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 2 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Learning objectives (1) 1. Examples of how the political systems of countries differ. 2. Distinguish how the economic systems of countries differ. 3. Explain how the legal systems of countries differ and how corruption affects economic development. 4. Determines the level of economic development of a nation. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 3 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Learning objectives (2) 5. Summarize the main changes that are currently reshaping political, economic, and legal systems worldwide. 6. Describe how transition economies are moving toward market-based systems. 7 Explain the implications of changes in political economies. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 4 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Country Differences Opening Case: Hong Kong Protests In 2019, Hong Kong’s Security Bureau, proposed amendments that allowed to extradite criminal suspects to mainland China Hong Kong civil society reacted with mass protests demanding the repeal of the law and the resignation of the executive chief The beginning of 2020 marked another wave or protests, focused on wider democratic reforms, culminating with the dismissal of; Wang Zhimin, Beijing's liaison officer for the territory, and the appointment of a provincial Communist Party secretary Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 5 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Political Systems(1) Collectivism and Individualism Collectivism Political system that stresses the primacy of collective goals over individuals goals. Plato (427-347 BC) - Individual rights should be sacrificed for the good of society. Socialism 1. Communism – revolution and totalitarian dictatorships 2. Social Democrats – socialism by democratic means Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 6 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Political Systems(2) Collectivism and Individualism Individualism Political system that focuses on the interests of the individual over the interests of the state. Aristotle – Private property is more highly productive than (384 – 322 BC) communal property and will thus stimulate progress Individualism has two central tenets: 1. Individual Freedom and self-expression – John Stuart Mill 2. Let people pursue their own economic self interest – Adam Smith Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 7 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Political Systems(3) Democracy and Totalitarianism Democracy Political system in which the people elect representatives to form the government. Democracy demands: 1. Freedom of expression 2. Free media 3. Regular elections 4. Limited terms for representatives 5. Fair court system 6. Non political – police and army Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 8 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Political Systems(4) Democracy and Totalitarianism Totalitarianism All the constitutional guarantees on which representative democracies are built—such as an individual’s right to freedom of expression and organization, a free media, and regular elections—are denied to the citizens. In most totalitarian states, political repression is widespread and those who question the right of the rulers to rule find themselves imprisoned or worse. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 9 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Political Systems(5) Democracy and Totalitarianism Totalitarianism There are four major forms of totalitarianism: Communist totalitarianism Theocratic totalitarianism Tribal totalitarianism Right-wing totalitarianism Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 10 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Economic Systems Market Economy All productive activities are privately owned; Supply and demand determines price and production Command Economy The government determines the allocation of resources including the determination of production and prices Mixed Economy Some sectors are left to private ownership and free market mechanism; Others have significant government ownership and government planning. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 11 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(1) Legal systems refers to a system of rules that regulates behavior and the processes by which the laws of a country are enforced and through which redress of grievances is obtained. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 12 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(2) Different Legal Systems Common Law System of law based on tradition, precedent, and custom. When law courts interpret common law, they do so with regard to these characteristics. Civil Law Law based on a very detailed set of written laws and codes. Theocratic Law System of law based on religious teachings. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 13 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(3) Different in Contract Law Definition of Contract Contract is a document that specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved. Contract Law Contract law is the body of law that governs contract creation and enforcement Parties to an agreement invoke contract law when there is belief there was violation of the agreement Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 14 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(4) Different in Contract Law International Trade and Contract Disputes United Nations Convention of Contacts for the International Sale of Goods (CISG); By adopting the CISG, a nation accepts to treat the convention rules as part of its law. CISG applies automatically to all contracts for the sale of goods between different firms based in countries that have ratified the convention, unless the parties to the contract explicitly opt out Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 15 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(5) Property rights Property Refers to a resource over which an individual or business holds a legal title, meaning it owns the resource. Resources include: Land & real estate; Equipment; Capital Mineral rights; Businesses; Intellectual property(patents, copyrights and trademarks) Property rights Bundle of legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource. Essentially, “people own stuff and can use it” Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chpt 1 Slide 16 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(6) Actions Against Property Rights Private Action Private Action is an action by private individuals or groups against property holders including actions such as: Theft Piracy Blackmail Any criminal activity against property rights Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 17 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(7) Actions Against Property Rights Public Action and Corruption Public Action violates property rights when public officials extort income from property holders, including actions such as: Bribes Levying excessive taxation Requiring expensive licenses or permits from property holders or taking assets into state ownership without compensating the owners Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 18 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(8) Actions Against Property Rights Table 2.1 Corruption Perceptions Index (2018) Country Rank Score Denmark 1 88 New Zealand 2 87 Finland 3 85 Canada 9 81 United States 22 71 South Sudan and Syria (tied) 178 13 Somalia 180 10 Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 19 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(9) Actions Against Property Rights Public Action and Corruption Canada’s Bill S-21 Otherwise known as the Corruption of Foreign Public Officials Act that entered into force in1999 It has long been illegal to bribe officials in Canada Now it is illegal for Canadian officials to bribe officials in another country Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 20 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(10) Actions Against Property Rights Public Action and Corruption Canada’s Bill S-21 Does have “loophole” provisions to cover for those instances in which a bribe might be solely a perception, due to cultural considerations of gift giving, in other countries Sets out a lawful exception that an accused could use as a defence. Namely, that the payment was lawful in the foreign state or public international organization for which the foreign public official performs duties or functions Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 21 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(11) The Protection of Intellectual Property Intellectual Property refers to property that is the product of intellectual activity such as computer software, music, formulas etc. Ownership rights are establish through: 1. Patents 2. Copyrights 3. Trademarks Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 22 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(12) The Protection of Intellectual Property Paris Convention for the Protection of Industrial Property : International agreement signed by 96 nations to protect intellectual property Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement (1995) Agreement amongst member states of the World Trade Organization (WTO) to oversee the enforcement of stricter intellectual property regulations. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 23 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(13) Table 2.2 Corruption Perceptions Index (2018) 1. China 11. France 2. Russia 12. Turkey 3. United States 13. Iran 4. India 14. Germany 5. Ukraine 15. Brazil 6. Italy 16. Colombia 7. Taiwan 17. Indonesia 8. South Korea 18. Peru 9. Mexico 19. Thailand 10. Vietnam 20. Hungary Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 24 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Legal Systems(12) Product Safety and Product Liability Product Safety Laws set safety standards to which products must adhere, where it is going to be commercialized. Product Liability involves holding a firm and its officers responsible when a product causes injury, death or damage Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 25 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(1) The political, economic, and legal systems can have a profound impact on a country’s economic development. Gross National Income (GNI) Total income of all citizens of a country. Purchasing Power Parity (PPP) Adjustment in gross domestic product per capita for a comparison of living standards in different countries. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 26 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(2) Differences in Economic Development Table 2.3 GNI per Capita for Select Countries Country 1962 2018 United States $3,280 $62,850 Ireland 1,450 59,770 Canada 2,340 44,860 Russia N/A 10,230 Malaysia 240 10,460 Uganda N/A 620 Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 27 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(3) Differences in Economic Development Table 2.4 GNI per Capita for Select Countries with PPP Country 1990 2018 United States $16,670 $63,390 Ireland 12,760 65,290 Canada 19,290 47,490 Russia 7,990 26,470 Malaysia 6,560 30,600 Uganda 490 1,970 Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 28 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(4) Broader Conceptions of Development: Amartya Sen Human Development Index (HDI) Human Development Index (HDI) measures the quality of human life in different countries The Nobel prize-winning economist Amartya Sen has argued that development should be assessed less by material output measures, such as GNP per capita, and more by the capabilities and opportunities that people enjoy. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 29 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(5) Broader Conceptions of Development: Amartya Sen Human Development Index (HDI) According to Sen, development should be seen as a process of expanding the real freedoms that people experience. In Sen’s view, development is not just an economic process, but it is a political one too, and to succeed requires the “democratization” of political communities. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 30 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(6) Broader Conceptions of Development: Amartya Sen Human Development Index (HDI) Measures quality of human life in different countries in terms of: 1. Life expectancy at birth (which is a function of health care) 2. Education attainment (which is measured by a combination of the adult literacy rate and enrolment in primary, secondary, and tertiary education), 3. Average incomes, based on PPP estimates, are sufficient to meet the basic needs of life in a country (adequate food, shelter, and health care). Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 31 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(7) Political Economy and Economic Progress Innovation and Entrepreneurship: The engines of growth Innovation and entrepreneurial activity are the engines of long-run economic growth. Innovation definition broadly to include not just new products, but also new processes, new organizations, new management practices, and new strategies. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 32 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(8) Political Economy and Economic Progress Innovation and Entrepreneurship require a Market Economy Economic freedom associated with a market economy creates greater incentives for innovation and entrepreneurship than either a planned or a mixed economy. In a planned economy, the state owns all means of production: Entrepreneurial individuals have little economic incentive to develop valuable new innovations, since it is the state, rather than the individual, that captures most of the gains Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 33 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(9) Political Economy and Economic Progress Innovation and Entrepreneurship require strong property rights: Both individuals and businesses must be given the opportunity to profit from innovative ideas Without strong property rights protection, businesses and individuals run the risk that the profits from their innovative efforts will be expropriated, either by criminal elements or by the state Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 34 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(10) Political Economy and Economic Progress The Required Political System There is a great deal of debate as to the kind of political system that best achieves a functioning market economy with strong protection for property rights. Four of the fastest-growing economies of the past 30 years— South Korea, Taiwan, Singapore, and Hong Kong—had one thing in common at the start of their economic growth: undemocratic governments. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 35 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(11) Political Economy and Economic Progress Economic Progress Begets Democracy While it is possible to argue that democracy is not a necessary precondition for a free market economy in which property rights are protected, subsequent economic growth often leads to establishment of a democratic regime. Several of the fastest-growing Asian economies adopted more democratic governments during the past two decades, including South Korea and Taiwan. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 36 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(12) Geography, Education, and Economic Development While a country’s political and economic system is probably the big locomotive driving its rate of economic development, other factors are also important: Geography Harvard’s Jeff Sachs: by virtue of favourable geography, certain societies were more likely to engage in trade than others and were thus more likely to be open to and to develop market-based economic systems Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 37 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Determinants of Economic Development(13) Geography, Education, and Economic Development The general assertion is that nations that invest more in education will have higher growth rates because an educated population is a more productive population. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 38 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  States in Transition(1) The political economy of many of the world’s nation-states has changed radically since the late 1980s. Two trends have been evident. 1. During the late 1980s and early 1990s, a wave of democratic revolutions swept the world. Totalitarian governments collapsed and were replaced by democratically elected governments 2. There has been a strong move away from centrally planned and mixed economies and toward a more free market economic model. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 39 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  States in Transition(2) The Spread of Democracy Map 2.1. Freedom in the World 2018 Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 40 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  States in Transition(3) The New Order? The end of the Cold War and the “new world order” that followed the collapse of communism in Eastern Europe and the former Soviet Union, taken together with the collapse of many authoritarian regimes in Latin America, have given rise to intense speculation about the future shape of global geopolitics: Author Francis Fukuyama has argued that “we may be witnessing... the end of history as such: that is, the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 41 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  States in Transition(4) The New Order? Huntington theorizes that modernization in non-Western societies can result in a retreat toward the traditional, such as the resurgence of Islam in many traditionally Muslim societies: The Islamic resurgence is both a product of and an effort to come to grips with modernization In contrast to Fukuyama, Huntington sees a world that is split into different civilizations, each of which has its own value systems and ideology Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 42 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  States in Transition(5) The Spread of Market-Based Systems In general, command and mixed economies failed to deliver the kind of sustained economic performance achieved by countries adopting market-based systems, such as the United States, Switzerland, Hong Kong, and Taiwan. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 43 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  States in Transition(6) The Spread of Market-Based Systems Map 2.2. Index of Economic Freedom 2018 Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 44 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  The Nature of Economic Transformation(1) Deregulation Deregulation involves removing legal restrictions to the free play of markets, to the establishment of private enterprises, and to the manner in which private enterprises operate Privatization Transfers the ownership of state property into the hands of private individuals, frequently by the sale of state assets through an auction. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 45 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  The Nature of Economic Transformation(2) Legal Systems Without a legal system that protects property rights, and without the machinery to enforce that system, the incentive to engage in economic activity can be reduced substantially by private and public entities, including organized crime, that expropriate the profits generated by the efforts of private-sector entrepreneurs Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 46 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(1) In practice, the road that must be travelled to reach a market-based economic system has often been rocky. This has been particularly true for the states of Eastern Europe in the post-communist era. In this region, the move toward greater political and economic freedom has sometimes been accompanied by economic and political chaos Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 47 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(2) Implications for business The implications for business are enormous. For the best part of 50 years, half of the world was off- limits to Western businesses. Now all that is changing. Many of the national markets of Eastern Europe, Latin America, Africa, and Asia may still be undeveloped and impoverished, but they are potentially enormous. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 48 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(2) Implications for business Attractiveness Benefits In the most general sense, the long-run monetary benefits of doing business in a country are a function of: the size of the market, the present wealth (purchasing power) of consumers in that market, and the likely future wealth of consumers Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 49 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(3) Implications for business Attractiveness Benefits First-mover advantages are the advantages that accrue to early entrants into a market. Late-mover disadvantages are the handicap that late entrants might suffer Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 50 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(4) Implications for business Attractiveness Costs A number of political, economic, and legal factors determine the costs of doing business in a country. With regard to political factors, the costs of doing business in a country can be increased by a need to pay off the politically powerful to be allowed by the government to do business. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 51 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(5) Implications for business Attractiveness Costs One of the most important variables is the sophistication of a country’s economy. It may be more costly to do business in relatively primitive or undeveloped economies because of the lack of infrastructure and supporting businesses. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 52 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(6) Implications for business Attractiveness Risks Risks of doing business in a country are determined by a number of: political, economic, and legal factors. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 53 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(7) Implications for business Attractiveness Risks Political risk has been defined as the likelihood that political forces will cause drastic changes in a country’s business environment that adversely affect the profit and other goals of a particular business enterprise. Economic risk can be defined as the likelihood that economic mismanagement will cause drastic changes in a country’s business environment that adversely affect the profit and other goals of a particular business enterprise Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 54 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(8) Implications for business Attractiveness Risks Legal risk might be defined as the likelihood that a trading partner will opportunistically break a contract or expropriate property rights The overall attractiveness of a country as a potential market and/or investment site for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 55 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(9) Implications for business Attractiveness Overall attractiveness The overall attractiveness of a country as a potential market and/or investment site for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 56 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(10) Implications for business Ethics and Regulations Ethics and Human rights One major ethical dilemma facing firms from democratic nations is whether they should do business in totalitarian countries, such as China, that routinely violate the human rights of their citizens. Some argue that investing in totalitarian countries provides comfort to dictators and can help prop up repressive regimes that abuse basic human rights Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 57 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(11) Implications for business Ethics and Regulations Ethics and Regulations A second important ethical issue is whether an international firm should adhere to the same standards of product safety, work safety, and environmental protection that are required in its home country This is of particular concern to many firms based in Western nations, where product safety, worker safety, and environmental protection laws are among the toughest in the world Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 58 PowerPoints by Associate Professor Frank Cotae, Mount Royal University  Implications of the Changing Political Economy(12) Implications for business Ethics and Regulations Ethics and Corruption A final ethical issue concerns bribes and corruption Should an international business pay bribes to corrupt government officials to gain market access to a foreign country? To most Westerners, bribery seems to be a corrupt and morally repugnant way of doing business, so the answer might initially be no. Global Business Today 6th Edition ©2021 McGraw Hill Ryerson All rights reserved Chapter 2 Slide 59 PowerPoints by Associate Professor Frank Cotae, Mount Royal University