IBA Week 1: The Political Environment PDF

International Business Awareness: Year 1 Block 2 The Political Environment  Welcome to your first IBA Economics lesson! (the lesson you’ve been waiting for) Introductions What do you worry about the most when looking at the economy? Work in groups of 3-4 students. One student makes notes an...

International Business Awareness: Year 1 Block 2 The Political Environment  Welcome to your first IBA Economics lesson! (the lesson you’ve been waiting for) Introductions What do you worry about the most when looking at the economy? Work in groups of 3-4 students. One student makes notes and shares findings later. Your teacher Qualifications Why I became a teacher What I worry about when looking at the economy Ground rules These rules are set to create a serious learning environment. This is NOT a high school. Address your lecturer with Sir or Mr. Punctuality Please don’t enter the classroom if you are more than 5 minutes late, enter during the break in the middle of the class. Stick to the time the teacher sets for breaks. Otherwise, you will be asked to take your things and leave as you enter the classroom late. Use of phones Phones are only allowed to be used in relation to lesson activities. You are however strongly recommended to use a laptop computer for that and keep your phone in your bag on airplane mode or off, so that you are not disturbed. On suspicion of online chatting during class, you will be asked to leave the classroom. Participation Nobody is forcing you to be here, so if you don’t want to participate then you can better leave. The lecturer may ask you to do so if he or she sees fit. Why economics? You have a passport, a world map and some serious drip (a nice outfit). What’s next? Economics (no cap)! Negotiate like a boss: understanding economics for international trade (e.g. exchange rates). Scope out which country to invest in: effects of fiscal and monetary policy on the economy. Get the lowdown on how countries move, what they’re makin’ (production) and what they’re snackin’ on (consumption). Read the news like a pro: know how to decode the real tea behind the headlines, e.g. what’s the difference between a decrease in inflation and a decrease in prices? Bottom line, G, you need it to make smart money moves and lock in those business wins! Weekly overview Model used in this block: STEEP Analysis The STEEP analysis is used to assess the macro-economic environment in a country or region. Each letter stands for an aspect of that environment. S Social: trends in society, demographics, lifestyles, education and cultural attitudes that affect consumer behavior – week 5 T Technological: technological trends and improvements, automation and R&D – week 5 E Economic: GDP growth, GDP per capita, inflation, money printing, taxation, government spending, consumption – week 2-4 E Environment: environmental protection laws, sustainability – week 6 P Political: government policies, regulations, tax policies, corruption – week 1  Contents  Assessment  Literature  Week 1 learning objectives  The political environment Recap  Assessments Individual case-based exam (Multiple-Choice and open questions). Case-based combined (storyline) exam with 40 Multiple Choice questions (20 from OPS & SCM and 20 from IBA) and 4 open questions for research. Elements from this subject will be used on your Critical Thinking and BEC courses. The arguments for and against market entry.  Literature Authors: lan Worthington, Chris Britton and Ed Thompson. Title: The Business Environment: A Global Perspective (8 th Edition). Publisher: Pearson. Interactive: pearson.com – quizzes & practice multiple choice questions. Please note that there are two sets of numbers of chapters. The chapters of the customized book and the chapters of The Business Environment: A Global Perspective (8 th Edition). IBA slides are referring to chapters of The Business Environment: A Global Perspective (8th Edition). For example, chapter 4 is the political environment while it is stated as chapter 1 of the customized book. When in doubt refer to the title of the chapter. Week 1: Learning Objectives By the end of this lesson, students should be able to: Explain the political context within which business operates. Demonstrate the relevance of political values to the organization of business activity. Identify and discuss key political institutions and processes at a variety of spatial events. Illustrate how business organizations can influence, as well as be influenced by the political environment. What is Politics? Politics is concerned with those processes that help to determine how conflicts are contained, modified, postponed or settled and as such seen as a universal social activity. Politicians are concerned about the needs of their stakeholders (companies, voters and NGOs). How do political factors affect business environment? Political stability Impact of taxes on businesses Enactment of laws such as employment or labour laws, environmental laws among others. Corruption Trade controls Deregulation and privatization  Political systems Electoral system  Regular elections  Freedom of speech  Freedom from coercion  Secret ballot  Free media Party system Representative assembly Parliament Political systems What is government? Institutions through which power tends to formally and sometimes coercively be exercised, whether they be cabinets, parliaments, councils, committees or congresses. Political systems Authoritarian (old world order) Democratic (new world order) One family rules the country. A group of people rule the country (Liberté, Égalité, Fraternité). Usually, a kingdom or equivalent. Republics and constitutional monarchies Examples: Middle Eastern countries Electoral system (excluding Israel) Examples: United States, Europe, Israel We will focus on this political system The electoral system Features of an electoral system: A system of regular elections (e.g. every four to five years) based on universal adult suffrage (all adults have equal rights to vote). Some freedom of speech, movement, assembly, etc. A system for articulating sectional interests Pressure groups such as BLM and Greenpeace Elections and a party system provide one way in which the views of an individual can be represented in government; an alternative is via the activity of pressure groups. Lobbying groups such as NRA, planned parenthood or chambers of commerce Whereas political parties seek influence by formally contesting political office, lobbying groups seek to influence government in other ways, although this distinction is increasingly becoming blurred. The three branches, arms or functions of government Function 1: Function 2: Function 3: Legislative function Executive Judicial function function Make, amend or replace laws Decisions put Supreme into effect Court & the If bill gets approved – system of becomes a law courts Presidential or Government, Parliamentary system civil servants, ministers etc. Relationship between business and politics Business and politics are interrelated and dependent on each other to achieve the goals of the other Main goal of Main goal of Government is to Business is to ensure stability make a profit and growth Both goals are different but co-dependent The business of lobbying A key characteristic of a democratic political system is the right of individuals, groups and organisations to seek to influence government thinking and behaviour. For a business wishing to have its voice heard in official circles, a variety of approaches is possible, ranging from direct appeals to decision-makers to joint action with other firms via an industry body, trade association or a business representative organisation. A firm may even consider hiring the services of a professional lobby organisation to act on its behalf. Professional lobby organisations are essentially businesses that have been specifically set up to influence others on behalf of their clients. The business of lobbying Discussion questions:  Why do governments frequently express concern over the activities of professional lobby organisations?  Why do some businesses and industries choose to use such organisations? Corruption Taking tangible or non-tangible gifts in return for favors. Taking place in all countries in the world. Mostly done by local politicians, because they have fewer eyes on them. More pervasive and out in the open in certain countries. May be seen as a way for a public worker to receive a decent salary (because state salaries are too low) in some countries. Complicates international business dealings. Recap Politics affects the business environment. Businesses and governments work together to achieve their goals. Politicians and entrepreneurs may exploit one another, which negatively affects the consumer. Corruption complicates international business. Article Senator Bob Menendez found guilty in bribery scheme (bbc.com) Read the article and answer the questions, first individually and then discuss them with a classmate: What was Bob Menendez’ position in the US government? Who did Bob Menendez do favors for? Who found Bob Menendez guilty? What proof was provided? Why is it more likely that a national politician gets caught vs. a local politician? What would you do if you were in a position where you could receive money that easily as a government official? Why? If you’d like to pass this test, please transfer 100 euros to your teacher’s bank account NL…….. We are severely underpaid (just kidding!). Survey quality of education You have received an email link to evaluate our courses. Deadline is Monday 11 November. Survey is anonymous. You need to know your class and language group number to evaluate the right courses.  Quiz week 1 See questions on Brightspace