MGMT1101 Lecture Notes - Lecture 4: United Nations Convention On Contracts For The International Sale Of Goods, Operational Risk, High Standard Manufacturing Company
Week 4: State vs firm: The political and legal environment
1. Identify and compare political and legal systems
Sovereignty:
• ultimate authority of state, backed by monopoly use of coercive force over citizens/firms
within its defined territory and in relation to other countries.
• Bestows power to control and restrict commercial activities within own borders
• Influences internationalisation process (signatories of international trade + trade
agreements)
Political economy: political, economic and legal systems and forces that govern the economy and
business activity
Political system:
• Relationships and formal and informal institutions by which governments generate policies
in response to the demands or support of the general public
• Includes the national goeet, hee the te goeet usually efes to the
formal institutions and processes that are responsible for making and enforcing the
collective decisions for society
• Government vs governance:
o Goeet is hadae of politial syste
o Governae is softae that deteies the uality of goeig
o Competing interest groups may justify policies and actions according to a coherent
and shared set of values or ideology
▪ Ideology: a set of values and beliefs that justifies certain behaviours and
guides eooi ad politial atios i.e. the eolieal aket ideology
Political systems:
Can be characterised as collectivism vs. individualism and democracy vs. totalitarianism
Democracy:
• Government is by the people, exercised either directly or through elected representatives
• Representative democracy: where elected reps vote on behalf of constituents
• Direct democracy: voters may decisions in a collective assembly
Totalitarianism:
• Form of government in which one person or political party exercises absolute control over
all spheres of human life, and opposing political parties are prohibited
o Communist totalitarianism:
▪ Advocates achieving socialism through totalitarian dictatorship
▪ Declining worldwide, most Communist Party dictatorships collapsed
▪ Governments of China, Vietnam and Los are Communist in name but adhere
to market based economic reforms
o Theocratic totalitarianism:
▪ Political power monopolised by party/group/individuals that governs by
religious principles
▪ Most common modern form based on Islam
o Tribal totalitarianism:
▪ Where a political party represents interests of a particular tribe monopolises
power
▪ Arisen in African countries incl. Zimbabwe, Tanzania, Uganda and Kenya
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Document Summary
Week 4: state vs firm: the political and legal environment. Sovereignty: ultimate authority of state, backed by monopoly use of coercive force over citizens/firms within its defined territory and in relation to other countries, bestows power to control and restrict commercial activities within own borders. Influences internationalisation process (signatories of international trade + trade agreements) Political economy: political, economic and legal systems and forces that govern the economy and business activity. Political system: relationships and formal and informal institutions by which governments generate policies in response to the demands or support of the general public. Ideology: a set of values and beliefs that justifies certain behaviours and guides e(cid:272)o(cid:374)o(cid:373)i(cid:272) a(cid:374)d politi(cid:272)al a(cid:272)tio(cid:374)s i. e. the (cid:862)(cid:374)eoli(cid:271)e(cid:396)al (cid:373)a(cid:396)ket ideology(cid:863) Can be characterised as collectivism vs. individualism and democracy vs. totalitarianism. Democracy: government is by the people, exercised either directly or through elected representatives, representative democracy: where elected reps vote on behalf of constituents, direct democracy: voters may decisions in a collective assembly.
