东北石油大学经济管理学院市场营销学英文课件 Chapter4.ppt

Chapter 4The Political, Legal, and Regulatory Environments of Global Marketing The Political Environment Political cultures provide context Governing party’s attitude toward Sovereignty Political risk Taxes Threat of equity dilution Expropriation Nation-States and Sovereignty “Every sovereign state is bound to respect the independence of every other sovereign state, and the courts in one country will not sit in judgment on the acts of government of another done within its territory.” - U.S. Supreme Court Chief Justice Fuller Nation-States and Sovereignty Stage of Development Protectionist laws -lesser developed Free trade – advanced development Political and economic Cronyism Market vs. Non-market Political Risk Risk of change in political environment or government policy that would adversely affect a company’s ability to operate effectively and profitably When perceived political risk is high, a country will have a difficult time attracting foreign direct investment Categories of Political Risk Causes of Political Risk Tension between aspirations and reality Primarily occurs in lower and lower-middle income countries Indonesia and economic crisis When political risk occurs in high income countries, it is generally due to a long-standing conflict Northern Ireland Expressions and Symptoms of Political Risk The less developed a country the greater the risk Increased economic uncertainty increases risk Expressions and Symptoms of Political Risk Taxes Government taxation policies High taxation can lead to growth in a black market Corporate taxation Companies attempt to limit tax liability by shifting location of income Seizure of Assets Expropriation – governmental action to dispossess a foreign company or investor Compensation should be provided in a “prompt, effective, and adequate manner” When no compensation is provided, it is called confiscation Seizure of Assets Nationalization - a government takes control of some or all of the enterprises in an entire indu