Political And Legal Environment Presented By : -Rohit Raina0613-MBA-2013

INTRODUCTION Multinational Enterprises operate in

different countries with different political and legal conditions.

Analyse if the corporate policies will fit a desirable political and legal environment.

POLITICAL ENVIRONMENTIt refers to:• Public Institutions: Government. Government Agencies. Government owned Business.• Non public Institutions: Interest Groups.

POLITICAL SYSTEM A political system integrates the parts of a society

into a viable functioning unit. Challenge: integration of people of diff. ethnic or

cultural backgrounds. It is influenced by forces within & outside the

country. – Internal Forces: Nature of population, size & influence of corporations & governmental bureaucracies, & the strength of the politicians. – External Forces: International agreements, NGO’s, Governmental organizations, etc.

POLITICAL SYSTEM Political process functions:– Interest articulation.– Interest aggregation (bringing together

different points of view)– Policy making.– Policy implementation and adjudication.

TYPES OF POLITICAL SYSTEMSDemocracyTotalitarianismMixed

Representative Republic

DEMOCRACY The people make the decisions Equal Rights Many Freedoms

Representative Democracies Elect citizens to represent them

TOTALITARIANISM Limited rights and freedoms Government (one or few) makes

decisions People have no right to interfere in the

laws

MIXED Characteristics of both systems

Almost all political systems are mixed

Layers of Political Influence First Layer: The Home Environment

Second Layer: The Host Environment

Third Layer: The Global Environment

LEGAL ENVIRONMENT Each nation develops and adapts a legal

system that fits its own economic, political and social goals

Two basic types of legal systems in global community Common Law Code Law

Layers of the Legal Environment The First Layer: The Home Environment

The Second Layer: The Host Environment

The Third Layer: The Global Environment

Settling International Disputes Despite trade agreements, there are still

problems and legal disputes among companies and governments

Three ways to settle differences: Negotiation Arbitration Litigation

THANK YOU.