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This 2 page Class Notes was uploaded by Hali Nepsha on Sunday October 2, 2016. The Class Notes belongs to BUSM 380 at Purdue University Calumet taught by Dr. Charles A. Rarick in Fall 2016. Since its upload, it has received 11 views. For similar materials see International Business in Business at Purdue University Calumet.
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Date Created: 10/02/16
BUSM 380 Notes Thu Aug 25, 2016 Political Economy Political Econ.: International bus. Operates in diff. political and economic enviro. Political Thought: Individualism: United states is individualist country followed by the Austrians Individ. Should have freedom in political and economic pursuits Capitalism: Property should be owned privately and market principles should prevail Democracy and Totalitarianism: Democracy: Democracy: gov. by the ppl Totalitarianism: Gov. one person or poli. Party exercises absolute control Military, Dictatorial, Theocratic Economic Systems: Market Econ.: All productive activities privately owned. Command Econ.: Goods, services produced, quality & prices determined by the gov. Mixed Econ.: Parts left private ownership & free mkt mechanisms, other sectors stated owned Strongest econs historically been mkt. Econ Freedom: Most Free Economies in World: Hong Kong, Singapore, Australia, New Zealand, Switzerland Based on gov. regs. of business, taxes, trade barriers, property rights, freedom corruption ect Quality Life: United nations uses HDI (Human Development Index), which is based on life expectancy @birth, edu. Attainment, whether average incomes are sufficient to meet basic needs life in a country Legal Sys.: Devel. Level, priv. prop protection, intellectual prop protection Intellectual Prop. (IP): Majority concern of compa. From devel. Countries is violation of IP Through WTO the TRIPS Agreement seeks stricter enforcement of IP Political Risk: Adverse gov. or soc. Action reduces assets and or profits War, revolu., terrorism, nationalization, rioting controls Micro-risk (firm or industry) Macro-risk (country) Gov. Actions: Expropriation: Assets taken w/ compensation Confiscation: Assets taken w/o compensation Repatriation Restrictions: Profits restricted from leavn’ country Foreign Corrupt Practices Act: Applies to US bus. Operation aboard Makes illegal any bribe or gift to fore. Official Illegal paymts. Intented to encourg. Foreign offic. Act contrary to duties Law excludes clerical offic. Used expedite routine actions Penalties of $2M & 5 yrs in prison Most desirable country for international bus. Is one w/ a mkt-based econ., democratic rule, low political risk, & secure legal sys. –AUSTRALIA Least desirable countr. Is one w/ command econ., totalitarian rule, high poli. Risk, & unsecured legal sys. –N.KOREA