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GBE: International
Political Environment

MM UGM 25 February 2015


Poppy S. Winanti

E m a i l : p o p py s w @ u g m . a c . i d
We b s i t e : h t t p : / / p o p py s w. s t a f f . u g m . a c . i d

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Overview

Understanding
business environment
External environments
of Business
Changing profile of the
global business
environment
Transforming events
Understanding
globalisation
Assignment

Understanding Business Environment

Environment is the total of several external and

internal forces that affects the functions of business.

Every business organisation principally consists of


internal environment factors and set of external
environmental factors.

Environment factors influence to business directly and


indirectly that control, manage and administration of
business activities in the organisation.

(Hirriyapa, 2008)

The External Environments of Business

External Environment

Everything outside an organizations


boundaries that might affect it
The domestic business environment
The global business environment
The technological environment
The political environment
The sociocultural environment
The economic environment
n The legal/regulatory environment

(Ebert & Griffin, 2009; McKenna, n.d)

The External Environments of Business


(cont.)

Global Business Environment

The international forces that affect a business:

International trade agreements

International economic conditions

Political unrest

International market opportunities

Suppliers

Cultures

Competitors

Currency values
(Ebert & Griffin, 2009)

Changing profile of the global business


environment
Trade
liberalisation
Technological
development & innovation
Attitudes toward
MNCs
International
terrorism

(Fatehi, n.d; Rugman & Collison, 2009)

Globalisation

What is globalisation?

The globalisation scholars and the elephant (Steger, 2003)

What is globalisation?
Globalisation is "the process of social, political,
economic, cultural, and technological integration
among countries around the world
(Hodgetts, et. al, 2006)

Political
n The

extension of political power and political


activity across the boundaries of the modern nationstate (Held, et.al: 1999)
The principle of state sovereignty
n The growing impact of intergovernmental, international nongovernmental organizations, transnational pressure groups ,
regional and global governance
n Global problems: terrorism, environmental problems
n

n Challenges

the traditional distinctions between the


domestic/international, inside/outside,
territorial/non-territorial

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Global security & terrorism


n

Terrorism: a form of
political violence that aims
to achieve its objectives
through creating a climate
of fear and apprehension

Problematic: one persons


terrorist can be anothers
freedom fighter

(Heywood, 2011)

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Global security & terrorism


(contd)
More Spending on Security Technology: Communications,
Computers, Military and Police, and Surveillance at Local,
Regional and Global Levels

Increased Spending and Monitoring of Economic and


Financial Transactions

Cost of Doing Global Business Increases and Speed of


Transactions Decreases

Source: Kaushik, n.d

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Economic
n The

intensification and stretching of economic


interrelations across the globe (Steger, 2003)
Transnational corporations
n International economic institutions
n Regional trading systems
n

n Its

measured in respect of the growing intensity,


extensity, and velocity of world wide economic
interactions and interconnectedness from trade through
production and finance, to migration (McGrew, 2005)

+ Cultural: Americanisation or
Glocalisation?
n The

intensification and
expansion of cultural
flows across the globe
(Steger, 2003)

n Homogenized

popular
culture Vs. Glocalisation

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The drivers of Globalisation

Search for
competitive
advantage

Development
of new
technology

Reduced
barriers to
trade

(McKenna, n.d)

The Sustaining Forces of Globalisation

Greater policy
liberalisation

Increased flows
of goods,
services, and
people

Greater
efficiency of
business

Greater market
access

(McKenna, n.d)

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Group/Individual Assignment

Short essay on international political environment

Based on an empirical study, analyse the impact of one of the


following international political features for business
activities :
international trade regulations
technological innovation
globalisation (economic, political, cultural)
regional agreements
- greater policy liberalisation
- political unrest
- international terrorism, etc

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Assignment (contd)
n Essay

must focus on both opportunities and threats


posed by international political enviornment for
business activities

The length of the essay is between 1.000 1.500


words (or 4 5 pages, Times New Roman, 12 fonts,
1,5 lines)

Essay must be submitted on 18 March 2015