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Lecture International Business (11/e) - Chapter 9

In this chapter you will learn: What the difference is between rival and excludable goods and services? What the free-rider problem is and what its consequences are? What the tragedy of the commons is and what its consequences are? How and when social norms, government regulation, and expansion of property rights can be used to solve problems with public goods or common resources? | Political Forces McGraw-Hill/Irwin International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. chapter nine Learning Objectives Identify the ideological forces that affect business Discuss the fact that although most governments own businesses, they are privatizing them in growing numbers Explain the changing sources and reasons for terrorism Explain steps that traveling international business executives should take to protect themselves from terrorists Evaluate the importance to business of government stability and policy continuity Explain country risk assessment by international businesses 9- Ideological Forces Communism The belief that the government should own all the major factors of production Production in these countries is at state-owned factories and farms (some exceptions) Labor unions are government-controlled 9- Communism Conceived by Karl Marx as “classless society” Developed by his successors into control of society by the Communist Party and an attempted worldwide spread of communism Expropriation and Confiscation Government seizure of property within its borders owned by foreigners, followed by prompt, adequate, and effective compensation to the former owners Generally expropriated becomes confiscation (no compensation) 9- Ideological Forces Capitalism An economic system in which the means of production and distribution are for the most part privately owned and operated for private profit Ideal capitalism Government restricted to functions that the private sector cannot perform National defense Police, fire, and other public services Government-to-government international relations 9- Ideological Forces Socialism Public, collective ownership of the basic means of production and distribution, operating for use rather than profit Socialist governments frequently perform in ways not consistent with the doctrine Many European countries have practiced socialism: Great Britain, France, Spain, . | Political Forces McGraw-Hill/Irwin International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. chapter nine Learning Objectives Identify the ideological forces that affect business Discuss the fact that although most governments own businesses, they are privatizing them in growing numbers Explain the changing sources and reasons for terrorism Explain steps that traveling international business executives should take to protect themselves from terrorists Evaluate the importance to business of government stability and policy continuity Explain country risk assessment by international businesses 9- Ideological Forces Communism The belief that the government should own all the major factors of production Production in these countries is at state-owned factories and farms (some exceptions) Labor unions are government-controlled 9- Communism Conceived by Karl Marx as “classless society” Developed by his successors into control of society by the