Chapter 5 Powerpoint

Chapter 5 Powerpoint - Chapter 5 The Political, Legal, and...

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Unformatted text preview: Chapter 5 The Political, Legal, and 25-2 Introduction The global marketer must attempt to comply with each nations laws and regulations with respect to the cross- border movement of services, people, money, and know-how. Laws and regulations that change frequently or are ambiguous can hamper the 35-3 The Political Environment Made up of governmental institutions, political parties, and organizations that rulers and people use to wield power Each nations political culture reflects the importance of the government and legal system. Issues for foreign investors include the governing partys view on sovereignty, 45-4 Nation-States and Sovereignty Every sovereign state is bound to respect the independence of every other sovereign state, and the courts in one country will not sit in judgment on the acts of government of another done within its territory. U.S. Supreme Court Justice Fuller 55-5 Political Risk Risk of change in political environment or government policy that would adversely affect a companys ability to operate effectively and profitably When perceived political risk is high, a country will have a difficult time attracting foreign direct investment 65-6 Political Risk Some examples of political risk include War Social unrest Politically motivated violence Transparency Social conditions (population density and wealth distribution) Corruption, nepotism 75-7 Taxes Government taxation policies High taxation can lead to black market growth and cross-border shopping Corporate taxation Companies attempt to limit tax liability by shifting location of income 85-8 Seizure of Assets Expropriation governmental action to dispossess a foreign company or investor Compensation should be provided in a prompt, effective, and adequate manner Confiscation occurs when no 95-9 Seizure of Assets Nationalization a government takes control of some or all of the enterprises in an entire industry Acceptable according to international law if Satisfies public purpose Includes compensation 105-10...
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This note was uploaded on 06/12/2011 for the course MKTG 475 taught by Professor Field during the Spring '11 term at Nicholls State.

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Chapter 5 Powerpoint - Chapter 5 The Political, Legal, and...

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