Chapter Two Powerpoint Presentation

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    22-Jan-2015

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  • 1. Chapter 2 Learning Objectives
    • After studying this chapter, you should be able to:
    • Explain the concept of institutions and their key role in reducing uncertainty
    • Articulate the two core propositions underpinning an institution-based view of global business
    • Identify the basic differences between democracy and totalitarianism
    • Outline the differences among civil law, common law, and theocratic law
    • Understand the importance of property rights and intellectual property rights
    • Appreciate the differences among market economy, command economy, and mixed economy
    • Participate in three leading debates on politics, laws, and economics
    • Draw managerial implications
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  • 4. POLITICAL SYSTEMS
    • Democracy - political system in which citizens elect representatives to govern the country on their behalf; an individuals right to freedom of expression and organization is a fundamental aspect of democracy that is relevant to the effective conduct of global business
    • totalitarianism (or dictatorship) - political system in which one person or party exercises absolute political control over the population
    • Communist totalitarianism centers on a communist party
    • Right-wing totalitarianism characterized by intense hatred of communism with one party, typically backed by the military, restricts political freedom, arguing that such freedom would lead to communism
    • Theocratic totalitarianism - monopolization of political power in the hands of one religious party or group
    • Tribal totalitarianism - one tribe or ethnic group (which may or may not be the majority of the population) monopolizes political power and oppresses other tribes or ethnic groups
  • 5. LEGAL SYSTEMS
    • legal system - rules of the game on how a countrys laws are enacted and enforced
    • civil law - derived from Roman law and strengthened by Napoleons France, it is the oldest, most influential, and most widely distributed law around the world
    • common law - shaped by precedents and traditions, English in origin, based on previous judicial decisions
    • theocratic law - based on religious teachings
  • 6. PROPERTY RIGHTS
    • intellectual property - intangible property that results from intellectual activity (such as books, videos, and websites)
    • intellectual property rights - rights associated with the ownership of intellectual property
    • copyrights - exclusive legal rights of authors and publishers to publish and disseminate their work
    • trademarks - exclusive legal rights of firms to use specific names, brands, and designs to differentiate their products from others
    • piracy - unauthorized use of intellectual property rights
  • 7. ECONOMIC SYSTEMS
    • economic system - rules of the game on how a country is governed economically
    • market economy - characterized by the invisible hand of market forces
    • command economy - all factors of production are government- or state-owned and controlled, and all supply, demand, and pricing are planned by the government
    • mixed economy - characterized by elements of both a market economy and a command economy
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