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Government and Global Business

Government and Global Business. Chapter Four. What ways does government influences businesses? What is the purpose of a political system?. 4-1 Politics and Global Business. Political System - is the mans 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. What ways does government influences businesses? What is the purpose of a political system? 4-1 Politics and Global Business
  3. Political System - is the mans 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. A democracy emphasizes the importance of the individual’s needs and interest. 4-1 Politics and Global Business
  4. Totalitarian system (total·i·tar·i·an) - most people are excluded from making the rules by which they live. Political control is held by either one person or a small group. Mixed Systems – Most political systems are considered mixed. They have characteristics of both systems.
  5. Global Business Example – page 89 4-1 Politics and Global Business
  6. Host Country - is the country in which multinational enterprise is a guest. 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 headquartered. 4-1 Politics and Global Business
  7. Why is social responsibility important? 4-1 Politics and Global Business
  8. Review Global Business – page 92 4-1 Politics and Global Business
  9. Describe reasons why you would not want to start a business in another country? 4-2 How Government discourages Global Business
  10. Governments regulate businesses to protect the health and safety of workers. Society usually benefits from laws that protect consumers. 4-2 How Government Discourages Global Business
  11. Trade Barriers – government actions or policies that make it difficult to trade across boarders. Protectionism – is a government policy of protecting local or domestic industries from foreign competition. Tariffs/duty – is a tax placed on products that are traded internationally. 4-2 How Government Discourages Global Business
  12. Global Business Example – page 94 4-2 How Government Discourages Global Business
  13. Quotas – is a limit on the quantity, or monetary amount of a product that can be imported from a given country. Boycott – an absolute restriction on the IMPORT of certain products from certain countries. For example in Japan the government maintains a ban on importing rice. 4-2 How Government Discourages Global Business
  14. Trade Embargo – All import/export trade with that country has been stopped. Expropriation (ex-PRO-pree-ation) - The government takes control and owner ship of foreign-owned assets and companies. Economic Nationalism – the trend of some countries to restrict foreign ownership of companies and to establish laws that protect against foreign imports. 4-2 How Government Discourages Global Business
  15. Global Business Example – Page 97 Quick Research on travel warnings www.state.gov 4-2 How Government Discourages Global Business
  16. Customs Duty – or import tax, is a tax assessed on imported products. This money helps to pay for government programs. 4-2 How Government discourages global business
  17. Sales Tax- tax on the sale of products Excise Tax – tax on the sale of consumption of specific products or commodities – tobacco, gasoline and motor vehicles. Payroll Tax – taxes that are automatically deducted from an employee’s pay. 4-2 How Government discourages Global Business
  18. Value-Added Tax – (VAT) is a tax assessed on the increase in value of goods. This tax is very common in most European countries. Income Tax – Tax on the amount of income a person makes. 4-2 How Government Discourages Global Business
  19. Review on page 99 4-2 How Government Discourages Global Business
  20. Can you think of reasons why you would want to do business with another country? 4-3 How Government Encourages Global Business
  21. Free Trade Zones – is a designated area, usually around a seaport/airport, where products can be imported duty free and then stored, assembled, and used in manufacturing. Only when the product leave the zone does the importer pay duty. 4-3 How Government Encourages Global Business
  22. Most Favored Nation – A government can grant most-favored nation status to other countries. This allows a country to export into the granting country under the lowest customs duty rates. 4-3 How Government Encourages Global Business
  23. Free Trade Agreements – member countries agree to eliminate duties and trade barriers on products traded among members. This results in an increase in trade among members. 4-3 How Government Encourages Global Business
  24. Common Markets – members eliminate duties and other trade barriers, allowing companies to invest freely in each members country, and allow workers to move freely across borders. The European Union (EU) is an example of a common market 4-3 How Government Encourages Global Business
  25. E-Commerce in Action – Page 104 4-3 How Government Encourages Global Business
  26. Review – Page 106 Chapter Four -
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