INTERNATIONAL BUSINESS

NATIONAL DIFFERENCES
POLITICAL

FTU – Foreign Trade University – Le Thi Thanh Ngan

Classification: Internal
 How global are we?

In real estate, the mantra is 'location, location, location.‘For global

brand managers, it might be 'localise, localise, localise.‘
— A consultant-

There is a balance on the spectrum between “local” and “global”

that represents the “sweet spot”…[and makes for] “the race to
the middle.
— A manager-

The world got flat…[creating] a global, Web-enabled playing field

that allows for…collaboration on research and work in real time,
without regard to geography, distance or, in the near future, even
language.
-A journalist-

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 Semi-Globalization
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 “There are three ways to add value in a world where
differences still matter: 3A strategies
ADAPTATION,
AGGREGATION and
ARBITRAGE.”
Pankaj Ghemawat
Adaptation: create global value by changing 1 or many elements of a company's offer to meet local requirements or preferences
(Ex: Coca Cola changes packaging - printed Vietnamese names in their cans)
McDonald with Pho Burger
Aggregation: create economies of scale or scope as a way of dealing with differences. The objective is to exploit similarities among geographies
rather than adapting to differences
(Ex: publishers use different languages to publish their books - Harry Potter,...: based on the simi of the readers in the world to achieve
economies of scale)
Call center in multinational companies - cut down the cost of opening each call center in each countries. Which country? Reason?
Arbitrage:

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 Because…

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 C
ulture

Nations have differences in…

A
dministration

Geography

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E
conomy
 Chapter 2
International business (IB)

National Differences in…

POLITAL SYSTEM

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 Political System
=
System of Government in a
Nation

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 The political economy of a nation refers to how the political,
economic, and legal systems of a country are interdependent
(Hills.C.W)

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 Collectivism
- stresses the primacy of collective goals
over individual goals

Plato (427-347 BC)

Greek philosopher

Socialism
- advocate the state ownership of the basic means
of production, distribution, and exchange
- benefit society as a whole, rather than individual
capitalists
Karl Marx (1818-1883)
- Communism and social democrats
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 Individualism
an individual should have freedom in his own economic
and political pursuits
Aristotle - “individual diversity and private ownership are desirable”
(384-322 BC)

DEM
- democratic political systems → free market economies

- Government directly voted by nation citizens.

OCR
- Pure democracy is based on the belief that citizens
should be directly involved in decision making.
- Most modern democratic states practice

ACY
representative democracy where citizens periodically
elect individuals to represent them
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 Question: Presidential Election Process in USA

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 Totalitarianism
chuyen che Vd:

is a form of government in which one person or political party

exercises absolute control over all spheres of human life and prohibits opposing political parties

Totalitarianism

Communist totalitarianism – the Theocratic totalitarianism -

communist party monopolizes power Soviet monopolized by religious principles
Islam country

Tribal totalitarianism Right-wing totalitarianism

Classification: Internal
 Legal System?
“the rules that regulate behavior along
with the processes by which the laws
are enforced”
There are three types of legal systems
- Common law - based on tradition,
precedent, and custom (UK,USA)
most popular
- Civil law - based on detailed set of laws
organized into codes (80 countries)
- Theocratic law - based on religious
teachings luat than quyen: Muslim law
Theo + cus: not every laws written in codes --> careful
(*) International Law - Bilateral and
Multilateral treaties)
customary law: luat tap quan

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 Question:
Search and give more details about the Islamic law (especially
applying to the international business)

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 -Property rights: legal rights over use to
which a resource is put and income derived

-Intellectual Property Rights (IP): patents,

copyrights, trademarks: major bone of
contention especially in info-based economies

-Product safety and liability: standards

protecting consumers

- Enforcement of national and

international laws

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 Question:
Look for a multinational which troubled the international legal
issues.
- Summarize the case
- Give your recommendations

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 Corruption Perceptions Index 2011

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 - Discontinuities - Xenophobia
- Uncertainty - Social Unrest/disorder
- Political forces - Internal rebellion
-Business impacts - Armed conflicts
- Macro between nations
- Micro
- Local business groups
-

Classification: Internal