Global Business Environment - Political Environment

Flashcards covering key concepts from the Global Business Environment lecture focusing on the political environment.

What refers to the political factors influencing a business or organization's operations?

The political environment.

Why is it important for businesses to understand the political environment?

To anticipate and adapt to changes in government policies, reduce political risks, and build relationships with stakeholders.

What are some key aspects of the political environment?

Laws and regulations, government stability, political systems, party politics, diplomatic relations.

What can geopolitical risks disrupt?

Global trade and investment.

What is a nation-state?

A nation-state is a country where most people share the same culture, language, and identity, and they live under one government.

What political system includes countries like China, Cuba, and North Korea?

Communist political systems.

What percent of the world's population lives in a full democracy according to the Democracy Index 2023?

8%.

What are full democracies expected to respect?

Basic political freedoms and civil liberties.

What defines flawed democracies?

Countries with free and fair elections but significant weaknesses in governance.

What describes the characteristics of authoritarian regimes?

Absence of political diversity, limited opposition, and potential state-controlled media.

What are some types of political risk?

Government instability, regulatory changes, asset seizure, civil unrest.

What can cause political risk?

Political, economic, and social factors.

What is the relationship between political risk and investment decisions?

Investors must identify political risk when entering new markets.

What characterizes a unitary system of governance?

All authority issues from the central government.

What is a federal system of governance?

Authority is shared between central and regional units.

What factors contribute to political risk?

Corruption, lack of transparency, economic decline, social inequalities.

What role do social movements play in the political environment?

They influence regulations regarding environmental and labor rights.

How does media influence the political environment?

By shaping political discourse and public perception.

What challenges do businesses face in Pakistan due to political risks?

Political unrest, human rights concerns, corruption, and threats from terrorism.

What is one effect of government instability on business?

It can lead to losses or damaging effects on business operations.

What do parties in the political system influence?

Policy direction, taxation, and regulations.

In what type of regime are elections not free and fair?

Authoritarian regimes.

What are the impacts of political risk on strategic planning for businesses?

Businesses must incorporate political risk assessments into their strategic planning.

What do hybrid regimes typically exhibit?

A combination of features from flawed democracies and authoritarian regimes.

What is the importance of checks and balances in a full democracy?

They ensure the functioning of government and protect against abuses.