International Business Essay

4164 words - 17 pages

Chapter three
Governmental and legal systems
CHINA COMPLICATED RIS, BIG OPPORTUNITIES
During its thirty years of communist rule, China prohibited foreign investment and restricted foreign trade. Then, China enacted the Law on Joint Ventures using Chinese and Foreign Investment in 1978. China’s subsequent transformation has been fueled by a landslide of foreign investments made in response to the country’s market potential, market performance, improved infrastructure, enormous resources, and strategic position. Frustrating this process, however, have been the politics of China’s elaborate bureaucracy, as well as its ill-defined legal system and pervasive corruption. Historically China ...view middle of the document...

Thus, it integrates the various parts of a society into a viable, functioning entity. It also influences the extent to which government intervenes in business and the way in which business is conducted both domestically and internationally. The ultimate test of any political system is its ability to hold a society together.
1. Individualism versus Collectivism: it is useful to profile the similarities and differences among political systems according to the general orientation within a society about the primacy of the rights and role of the individual versus that of the larger community. Under an individualistic paradigm (e.g., the United States), political officials and agencies play a limited role in society. The relationship between government and business tends to be adversarial; government may intervene in the economy to deal with market defects, but generally it promotes marketplace competition. This concept that the government should not interfere in business affairs is captured in the idea of laissez-faire. Under a collectivist paradigm, the government defines economic needs and priorities, and it partners with business in major ways. Government is highly connected to and interdependent with business; the relationship is cooperative.
2. Political Ideology: applying the implications of individualism and collectivism to a political system brings us to the discussion of political ideology. A political ideology is the body of goals, theories, and aims that constitute a sociopolitical program. Pluralism indicates the coexistence of a variety of ideologies within a particular society. Although shared ideologies create bonds within and between countries, differing ideologies tend to split societies apart. The two extremes on the political spectrum are democracy and totalitarianism. Understanding the impact of political ideologies on business environments allows managers to adjust company practices and decision making.
* Spectrum analysis guides the assessment of complex issue, political ideology. A common dominator integrates the diversity of political ideologies of political freedom. Political freedom reflects the degree to which fair and competitive elections occur, the extent to which individual and group freedoms are guaranteed, the legitimacy ascribed to the rule of law and the existence of expression. Political spectrum, with democracy, with its call to preserve, protect and defend political freedom and totalitarianism, with its call to control. The ideologies that fall between these endpoints interpret political freedom differently. Freedom is the distinguishing characteristic of political ideologies. Political freedom measures the degree to which fair and competitive elective occur, the extent to which individual and group freedom are guaranteed, the legitimacy scribed to the rule of law, and the existence freedom of the press.
* A democracy represents a political system in which citizens participate in the...

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