integrates the various parts of its society into a viable, functioning whole. It also influences the extent to which the government intervenes in business.

the body of constructs, theories and aims that constitute a sociopolitical program (e.g., liberalism or conservatism).

indicates the coexistence of a variety of ideologies within a particular society.

contribute to the definition of national boundaries.

may be able to operate effectively in both democratic and totalitarian regimes,

usually offer greater economic freedom and enact more legal statutes designed to safeguard individual and corporate rights.

a political system in which citizens participate in the decision-making and governance process, either directly or through elected representatives.

companies may still face different and sometimes even conflicting laws from one state or province to another.

include fair and competitive elections, the empowerment of elected representatives, the right to organize and the protection of minorities.

include freedom of the press, equality under the law and personal freedoms.

many democracies that have emerged since the early 1970s are fragile and unstable.

represents a political system in which citizens seldom if ever participate in the decision-making and governance process

is monopolized and opposition is neither recognized nor tolerated.

religious leaders are also the political leaders.

the government usually imposes order through military power.

include fascism, authoritarianism and communism.

reflects the expectation that the political climate in a foreign country will change in such a way that a firm’s operating position will deteriorate.

Political actions that may adversely affect a firm’s operations would include

are those aimed only at specific foreign investments (e.g., a particular MNE)

affect a broad spectrum of foreign investors.

the government believes in minimal interference in the economy; it may intervene to deal with market defects but generally promotes marketplace competition.

whether democratic (Japanese) or authoritarian (Chinese) in nature, the government defines economic needs and priorities and partners with business in major ways.

originated in the United Kingdom and is based upon tradition, precedent, custom and usage; therefore, courts play an important role in interpreting the law.

also known as codified law, originated with the Romans and is based upon a detailed set of laws that make up a detailed code that includes rules for conducting business; courts play an important role in applying the law.

based upon religious precepts.

3 kinds of legal sytems

may affect the business climate both within and beyond a country’s borders and pertain to both domestic and foreign firms.

among nations may also affect the nature and extent of business operations.

implies that there is no method for deciding whether particular behavior is really appropriate.

tend to have a large body of laws that specify legal behaviors

tend to rely more on precedent than statutory regulations.

_____ as well as _____ concepts must be considered.

Both ______ and _______ vary among countries.