Business > Global Political Environment

What factors will you take into consideration when analyzing the global political environment?

The global political environment is very dynamic, and has an enormous effect on the economic environment. In today’s globalized business environment there are thousands of multinational companies. For a company to be successful, its management needs to analyze the political situation of every country the organization is doing business in. A company cannot successfully operate both in China and Germany if it’s using the same operating strategies, but it has to adapt to their specific political climate.

Countries, whose political systems are based on democratic ideas, attract more foreign investment than countries with a totalitarian system. Under democracy we assume to have a wide participation by citizens in the decision-making process. There is a freedom of opinion, expression, and freedom to organize. Also there are elections in which voters decide who is to represent them, there is a limited term for elected officials. In addition democracies have an independent and fair court system, with high regard for individual rights and properties. At the other end of the political spectrum are the totalitarian systems. Totalitarian governments are usually theocratic or secular. In theocratic totalitarianism, religious leaders are also the political leaders. This system can be found in many Islamic countries, such as Iran. In secular totalitarianism, the government often imposes order through military power, for example in Cambodia, or Iraq under Saddam Hussein. In a totalitarian state a single person, party, or a group of individuals monopolizes political power, and doesn’t recognize nor permit opposition.

 

 

 

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