BUSI2025 Lecture Notes - Lecture 2: Totalitarianism, Collectivism, Authoritarianism
Document Summary
Chief among formal institutions are: political systems, economic systems, legal systems. The complete set of institutions, political organizations, and interest groups. The relationships among institutions, and the political norms and rules that govern their functions. Individualism: primacy of the rights and role of the individual. Collectivism: primacy of the rights and role of the community. Wide participation by citizens in the decision-making process. A totalitarian s(cid:455)ste(cid:373) su(cid:271)o(cid:396)di(cid:374)ates the i(cid:374)di(cid:448)idual to the i(cid:374)te(cid:396)ests of the (cid:272)olle(cid:272)ti(cid:448)e disse(cid:374)t is eliminated through indoctrination, persecution, surveillance, propaganda, censorship, and violence. Distinguish between: commercial risk competitive pressures, technological change, market changes, environmental risk culture, legal-political, general economic forces. Political risk arising from the legal-political environment: macro risk: affects all companies, mi(cid:272)(cid:396)o (cid:396)isk: affe(cid:272)ts spe(cid:272)ifi(cid:272) (cid:396)egio(cid:374)s, se(cid:272)to(cid:396)s, i(cid:374)dust(cid:396)ies, fi(cid:396)(cid:373)s o(cid:373)eti(cid:373)es des(cid:272)(cid:396)i(cid:271)ed as country risk. The risk that political decisions or events in a country negatively affect the profitability or sustainability of an investment.
