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Political
Legal
Economic
Wild Card
100
100
100
100
200
200
200
200
300
300
300
300
400
400
400
400
500
500
500
500
600
600
600
600
700
100
• Give me two characteristics of a
democracy
Freedom of opinion, expression, press and freedom to organize
Elections in which voters decide who is to represent them
Limited terms for elected officials
An independent and fair court system, with high regard for
individual rights and property
A nonpolitical bureaucracy and defense infrastructure
An accessibility to the decision-making process
200
 This is a form of government in which one
person or political party exercises absolute
control over all spheres of life.
• Totalitarian – also known as dictator,
monarch or communist regime
300
• Political systems can range from
totalitarianism to democracy. List a country
on each side of the continuum.
• Totalitarian
• North Korea
• China
Democracy
U.S.
New Zealand
400
• List two things that increase a country’s political
risk
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Corruption
Increase in terrorism
War
History of political problems
Poor economy
Totalitarianist government
500 Daily Double
• List one way a company can manage political
risk.
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Good corporate citizen
Use a local partner
Involve the gov’t
Research the country and stay aware
Keep assets out of foreign country
600
• Define “expropriate”
• Gov’t takes assets and pays you for them
100
 List two types of legal systems.
 Systems include: common law, civil law,
Islamic law, mixed systems, customary
law
200
• This is the least preferred method of
dealing with an international dispute
between businesses.
• Litigation
300
 What kinds of cases are heard by the
International Court of Justice?
 Disputes between governments
400 Daily Double
• What is Islamic Law is based on?
• Koran, which is the holy text of the religion
500
 List one method of alternative dispute
resolution.
 Arbitration, Mediation, Conciliation
600
• What type of clause can help decide which
legal system will be used in a dispute
between companies from different
countries
• Jurisdictional clause
700
• Which law follows U.S. businesspeople as
they work internationally?
• Foreign Corrupt Practices Act
• National Security laws
• Antitrust laws
100
 Who controls the prices of goods and
services in a command economy?
 Government
 Buyers and sellers control the prices in a
market economy
200
 In a pure _________ economy, all
productive activities are privately owned,
as opposed to being owned by the state.
 Market or capitalist
300
• What are other names for the market and
command economic systems?
• Market = capitalist
• Command = communist
400
• This type of economic system is also
known as socialism.
• Mixed
500
 What is the trend today in economic
systems?
 Toward market systems
600
• This is the process of transferring
government owned and operated entities
to private individuals.
• Privatization
100
The three most common types of economic
systems are:
a. collective, productive, and capitalistic
b. communism, socialism, and political
c. market, command, and political
d. market, command, and mixed
D
200
• What is the difference between arbitration
and conciliation?
• Both use an independent third party to
give a ruling on a case. Conciliation is
nonbinding, meaning the parties don’t
have to follow the decision. Arbitration is
binding, so parties have to follow the
decision.
300
• Why do businesses care about a country’s
political environment?
• Governments set the rules and regulations
by which businesses must operate. They
also can affect a company’s ability to
operate.
400
• What makes a country have high political
risk?
• War, violence, poor economy, totalitarian
government, lack of freedom for the
people, corruption, history of political risk
500
• List three potential political risks that a
business can face in a foreign country.
• Expropriation, confiscation, domestication,
violence, exchange controls, local content
laws, labor laws
600
• Ultimately, what is the best environment
for economic development? (include the
political, economic, and legal perspective)
• Democratic political system
• Market economy
• Strong property rights in legal system
Final Jeopardy
• What do businesses most hope for in a
country’s political, economic and legal
system?