Political and Legal

Environment
How do political issues affect
international business?
 Can a company which implements
different business practices from Malaysia
operates successfully in China?
How do differences in political ideology
influence international business?
What do you understand about
political ideologies?
Political Ideologies
certain set of ethical ideals, principles, doctrines, myths or symbols of a
social movement, institution, class or large group that explains how society
should work and offers some political and cultural blueprint for a certain
social order
Most of modern society is pluralistic politically

- There is no ideology that is fully accepted

- Different groups of people that exists in a country are
often significantly different from each other in terms
of race, language and religion
Main purpose of any political system
- To unite the society even with pressures from various
ideologies

The more different the ideas, the more difficult it is for

the government to form ideologies that can be accepted
by all
If there are different ideologies that exists in a
single country alone, which political ideology
do we follow when engaging in international
business?
Political Risks
Defined as disruptions to an MNC’s operations due to
changes in political environment

Politics that affects international trade and foreign

investment can stem from political changes in the HOME
COUNTRY, HOST COUNTRY and the REST OF THE
WORLD.
Types and Causes of Political Risks
Types and Causes of Political Risks
Types and Causes of Political Risks