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Government and Global Business

Government and Global Business. Chapter Four. In what ways do governments influences businesses?. 4-1 – Politics and Global Business. Political System – is the means by which people in a society make the rules by which they live.

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Government and Global Business

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  1. Government and Global Business Chapter Four

  2. In what ways do governments influences businesses? 4-1 – Politics and Global Business

  3. Political System – is the means by which people in a society make the rules by which they live. • Democracy – all citizens take part in making the rules that govern them. • Totalitarian System (total·i·tar·i·an) – most people are excluded from making the rules by which they live. (Typically one ruler) 4-1 Plitics and Global Business

  4. Mixed Systems – Most political systems are considered mixed. That means they have characteristics of both systems and fall somewhere in between. 4-1 Politics and Global Business

  5. Global Business Example – Page 89 4-1 Politics and Global Business

  6. Host Country – is the country in which a multinational enterprise is a guest. Multinational enterprises fulfill a number of positive roles in a host country. • Employment for citizens of the host country. • Introduce more advanced technology • Increase economic development. 4-1 – Politics and Global Business

  7. Examples of Multinationals Coca-Cola Mars Chocolate 3M Intel American Express 4-1 Politics and Global Business

  8. Social Responsibility – is the process whereby people function as good citizens and are sensitive to their surroundings. • Home country is the country in which a multinational enterprise is head-quartered. 4-1 Politics and Global Business

  9. Review Page 92 4-1 Politics and Global Business

  10. What are some situations in other countries, that would influence your decision to NOT start a business? 4-2How Government Discourages Global Business

  11. Protectionism – is a government policy of protecting local or domestic industries from foreign competition. • Tariff/duty - is a tax placed on products that are traded internationally. • Quotas – is the limit on the quantity that can be imported from a country. 4-2 How Governments Discourages Global Business

  12. Boycott – Absolute restriction on the IMPORTS of certain products from certain countries. • Licensing Requirements – Governments can control imports by requiring that companies have a government import license. 4-2 How Government Discourages Global Business

  13. Trade Embargo – stops all import/export trade with that country. • Expropriation –(ex-PRO-pree-ation) the host government takes control and ownership of foreign-owned assets and companies. 4-2 How Government Discourages Global Business

  14. Economic Nationalism – the trend of some countries to restrict foreign ownership of companies and to establish laws that protect against foreign imports. 4-2 Government Discourages Global Business

  15. Civil Unrest or War These are the factors that signals the possibility of civil unrest in a country. Social Disorder Extreme income unevenness ( few rich folks/large number of poor folks) Frequent changes in the structure of political parties. 4-2 How Governments Discourages Global Business

  16. International Taxes Customs duty – import tax Sales Tax – Tax on the sale of products Payroll Related Tax – Taxes deducted from a paycheck. Value-Added Tax (VAT) – Tax on the increase in value of goods from each stage of production to final consumption. Income Tax – Tax on the amount of income a person or company makes. 4-2 Government Discourages Global Business

  17. Review – page 99 4-2 How Government Discourages Global Business

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