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Chapter02_HodgettsRev

Chapter02_HodgettsRev - 1 PowerPoint slides by R Dennis...

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1 PowerPoint slides by R. Dennis Middlemist, Professor of Management, Colorado State University
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Chapter 2 The Political, Legal, and Technological Environment The specific objectives of this chapter are: 1. EXAMINE some of the major changes that are currently taking place in the political environment of China, Europe, Russia, and Central and Eastern Europe. 2. PRESENT an overview of the legal and regulatory environment in which MNCs operate worldwide. 3. REVIEW key technological developments as well as their impact on MNCs now and in the future.
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3 Political Environment Change in government policies MNCs must adjust their strategies and practices to accommodate the new perspectives and actual requirements Less stable governments Greater risk Significant differences among political systems across countries and regions
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4 Political Environment Emerging economic power Government’s desire to balance National, immediate needs Challenge of a free market economy and globalization Government attempting to open up the economy 1. Speed up conversion of state enterprises into corporations 2. Expand capital markets by authorizing new stock listings 3. Sell off most of the 305,000 state enterprises (or let go bankrupt) 4. Worker retraining, low-cost housing and other programs 5. Reduce tariffs to 10 percent China
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5 Political Environment Privatization and economic liberalization reinforce EU- wide political and economic integration Political power is variable and complex Strong opposition to U.S.-led intervention in Iraq sometimes spill over into business relationships and dealings Europe is a large interwoven region economically, but contains vast cultural differences Europe
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6 Political Environment Neglect, corruption, and confusing changes in economic policy Infrastructure is weak and a political quagmire Legal Financial Trade sectors Corruption interferes with attraction of more foreign investment Russia
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7 Political Environment Many of these countries have joined the EU Movement from centrally planned to market economy plagued with problems in many countries High unemployment Economic slowdown Large trade deficits Some countries more successful in economic reforms Estonia Latvia Lithuania Central and Eastern Europe
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