Professional Documents
Culture Documents
Chap 002
Chap 002
Country Differences in
Political Economy
2-2
Opening case-India
Lessons learned:
Pace of reform determined by the interplay between the
economic goals of the reformers and the political and
cultural realities of the country
Managers need mental models to help them
Understand the similarities and differences of political,
economic, and legal infrastructures in nations across the
globe
Investigate the intricate changes in these infrastructures
that contain opportunities or threats for the business
Political Systems
System of Government in Nations”
Collectivism
Socialism
Socialist ideology is split into 2 broad camps
Communism
Communists believe that socialism can only be
achieved through violent revolution and
totalitarian dictatorship
Social democracy
Marxist roots. State owned enterprises run for
public good rather than private profit
Individualism
Democracy
Totalitarianism
Economic systems
Legal systems
Legal systems
Legal systems
Contract law
Contract law is the body of law that enforces a contract
specifies conditions under which an exchange is to occur
details rights and obligations of parties
Differences based on legal tradition
common law system
civil law system
theocratic law
bureaucratic law
Contract law
Dispute resolution is often complex
where to arbitrate and whose laws apply?
host country or home country
validity of contracts and decisions
Property rights
Fig 2.1
Fig 2.2
Map 2.1
Map 2.2
Map 2.3
Map 2.4
Map 2.6
States in transition
Map 2.5
Fig: 2.3
Centrally
Planned
Economies
Market –
Based
Shift Economies
Mixed
Economies