International environment: economic aspects political and legal aspects cultural aspects

1. International environment:economic aspectspolitical and legal aspectscultural aspects Elena Horska

2. Aspects of the international environment Home country environment Host country environment General international environment 6-2

3. Kinds of information typically available/needed Economic, social, political data on individual countries Summary and detailed information on aggregate global market transactions Individual reports on foreign firms Specific export opportunities Lists of potential overseas buyers, distributors, and agents for various products in different countries Information on relevant government regulations Foreign credit information 6-3

4. Major types of political risk in the host country environment Ownership risk Operating risk Transfer risk 6-4

5. Effects of political risk Import restrictions Local content laws Exchange controls Market control Price controls Tax controls Labour restrictions Change of government party Nationalization Domestication 6-5

6. How does the threat of terrorism affect business? Short and long-term decline of customer demand Unpredictable shifts in the supply chain Government policies and laws Macroeconomic effects such as falling stock market values Deteriorating relations among countries 6-6

7. The international economic environment

10. Classifying countries by income Less developed countries (LDCs) Newly industrialised countries (NICs) Advanced industrialised countries 6-10

11. Benefits of regional integration Trade creation Greater consensus Political cooperation 6-11

12. 6-12

13. EU – China Business Summit 2010 They called on China to grant better market access for European businesses, a better investment environment, stronger enforcement of intellectual property rights and the opening of public procurement. They also urged more respect of the rule of law and human rights. But there was no indication of any concession by Mr. Wen on any of these matters.

14. EU – China - India • What challenges and obstacles do you see in doing business perspectivelly with: • China, India, EU countries • from political, economic and socio-cultural aspects?

15. International cultural environment

16. Culture Culture is “the collective programming of the mind which distinguishes the members of one human group from another” (Hofstede, 1980). It is the learned ways in which a society understands, decides and communicates. 7-16

17. Characteristics of culture Culture is learned Culture is interrelated Culture is shared 7-17

18. The visible and invisible parts of culture 7-18

19. Hall’s Communication Context Low-context cultures High-context cultures 7-19

20. The contextual continuum of differing cultures 7-20

21. Globalization and changes in the culture • Adoption of new cultural elements • Cultural imperialism is the practice of promoting the culture or language of one nation in another.

22. Westernization • is related to the process of acculturation and/or enculturation. • Acculturation refers to the changes that occur within a society or culture when two different gorups come into direct continuous contact. After the contact, changes in cultural patterns within either or both cultures are evident. In popular speech, Westernization can also refer to the effects of Western expansion and colonialism on native societies.

23. Elements of culture Technology and material culture Language Education Religion Values and attitudes Aesthetics Religion Social institutions, social and political life 7-23

24. The role of language in global marketing Language is important in information gathering and evaluation efforts Language provides access to local society Language capability is important to company communications Language enables the interpretation of context 7-24