1. LESSON 4-1 Political Environment and Global Business
GOALS
Discuss various political systems around the world.
Explain the political environment for a company’s host and home countries. 4

2. Types of Political Systems
Political system-is the means by which people in a society make the rules that control and influence their lives.
Types of Political Systems:
Democracy
Totalitarianism
Mixed System 4

3. Democracy
All citizens have the opportunity to take part in making the rules that govern them
Emphasizes importance of individuals wants and needs
Equal rights, right to vote, freedoms (speech and religion)
Extends to economic system freedom to own and operate your own business
Tend to have market economies
Ex. United States 4

4. Totalitarianism
Most people are excluded from making the rules by which they live
Political control is held by one person or a small group of individuals
Monarchy and Dictatorship
People’s right and freedoms are restricted
People may not be able to travel outside of the country or to practice a religion of their choosing
Command Economies
Ex. Cuba and North Korea 4

5. Mixed Systems Most political systems are considered mixed
Characteristics that fall into both categories
Most European countries are mixed economies 4

6. Political Relations with Host Countries
Host Country-is a country in which a multinational enterprise is a guest. Multinational enterprises fulfill a number of positive roles in host countries while operating within the existing economic, social, and legal environment.
Multinational enterprises simulate economic activity. They also:
Provide employment for the host country
Introduce advanced technology
Comply with societal expectations and responsibilities 4

7. Political Relations with Host Countries
Social responsibility-is the process whereby people function as good citizens and are sensitive to their surroundings. 4

8. Political Relations with Home Countries
Home country-is the country where a multinational enterprise is headquartered. A multinational enterprise is expected to comply with home country’s social, economic, and legal mandates. Host Country and Companies Each group of 3 will choose a company and research any host country compliances they must meet while operating there. 4