Management and Organizational Studies 2285 Lecture Notes - Lecture 4: Patent Infringement, Liberal Democracy, Pass Laws

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MOS
LECTURE 4
THE POLITICAL ENVIRONMENT
- The politial eiroet oprises istitutios that…
Influence the political environment through their policies
Pass laws and establish regulations
Implement and enforce laws and regulations
Levels of decision making
- Deisios affetig the politial eiroet are ade at the…
International level EU, UN
National level federal governments
Regional level provincial or state
Local level municipal
National decision-making
- Unitary systems: decision-making power is centralized in hands of central government the regions have little
or no autonomy
- Federal systems: power is shared between the centre and the regions
Political and legal institutions
- Countries usually have institutions, backed up by coercion that make decisions that implement rules to enforce
or support the soiet’s ors ad alues…
Legislative branch: comes up with laws
Executive branch: implements laws and advise on policy
Judicial branch: interprets and applies laws
Different political systems
LIBERAL DEMOCRACY
- Less than half of 191 UN members
- Right of citizens to elect governments to represent their interests
- Governmental institutions based on majority rule
- Members drawn from a variety of political parties
- Free elections
- A permanent, skilled and impartial public/civil service responsible to government applies and enforces laws
- The right to personal freedom and to express views freely
- State institutions which are constrained in their powers by other institutions (ex. Independent judiciary)
- Cheks, alae ad oflit…
In liberal democracies conflict can occur between different branches of the state
o Politicians and judiciary
o Politicians and bureaucrats
Conflicts are resolved via rule of law, the court system or compromise not violence or illegal
activities
AUTHORITARIAN AND ABSOLUTIST SYSTEMS
- Burma, Saudi Arabia
- Restrictions on operations of political parties
- Power in hands of one of a few people
- No checks or balances on those holding power
- Power retained through patronage
- Citizens unable to elect governments if there are elections they are rigged
- Governmental institutions based on whim and maintaining power for those who rule
- Meers dra fro rulers’ politial part
- Limited (if any) rights to citizens
- No free speech
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THEOCRATIC SYSTEMS
- Iran, Vatican
- Religion/faith plays the dominant role
- Religious leaders and political rulers are the same people
- Political decisions derived from principles of the dominant religion
- Tend to be sexist and misogynistic
- Low tolerance for non-believers
- Liited if a itizes’ rights
- No tolerance for dissent
COMMUNISM
- China, Cuba, Vietnam, North Korea
- Means of production owned by the State
- Domination by one political party
- The party controls the legislative, executive and judicial branches of the State as well as trade unions and the
media
- Liited itizes’ rights
- No private ownership
- Distribution of wealth
- Not true Marist ouis
Functions of the state
- The State performs some very important functions with major implications for business:
Establishes the legal framework
Regulator and deregulator
Public expenditure and taxation
International negotiator
Internal and external security
Arbitrator/judge
Currency and taxation
- Ex. Apple vs Samsung
countries sometimes look to the judicial system to act as arbitrator in business disputes
In 2011
o Apple sued Samsung for infringing its patents in courts in the US, Korea, Japan, Germany
and Australia
o Samsung responded by suing Apple in Germany, France, Japan, and Korea for patent
infringement
- The State also plays a role in the business environment of a gie outr as a
1. Subsidiser
2. Competitor
3. Customer and supplier
How business influences the political environment
- The relative comparative advantage of a country can be influences by firms done to make their situation better
than that of competitors:
- Pressure group lobbying
- Promises or threats
- State consultation with business
- Representation on government bodies
- Giving money or gifts
- Employment and exchange of personnel
THE SOCIO-CULTURAL AND LEGAL ENVIRONMENT
Framework
- Businesses operating internationally face environments where social characteristics, structures, and institutions
may differ greatly
- To e suessful, usiesses eed to e aare of the differees that a affet the outr’s relatie
comparative advantage
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