The Political and Legal Environments Facing Business

Definition of a Political System The complete set of institutions, political organizations, and interest groups, The relationships among institutions, and the political norms and rules that govern their functions Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Individualism vs. Collectivism Individualism: primacy of the rights and role of the individual • Collectivism: primacy of the rights and role of the community Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Political Ideology The system of ideas that expresses the goals, theories, and aims of a sociopolitical program Most modern societies are pluralistic—different groups champion competing political ideologies Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Democracy Wide participation by citizens in the decision-making process Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Totalitarianism Restricts decision making to a few individuals Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Political Risk The risk that political decisions or events in a country negatively affect the profitability or sustainability of an investment Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Definition of a Legal System The mechanism for creating, interpreting, and enforcing the laws in a specified jurisdiction Types: Common law Civil law Theocratic law Customary law Mixed systems Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Intellectual property Intangible property rights that are a result of intellectual effort Intellectual property rights refer to the right to control and derive the benefits from writing, inventions, processes and identifiers Local attitudes play a large role in piracy Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall