The Political , Economics ,Legal

Environment
and Culture ;A Critical Concern
Ratih Hurriyati

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Political Systems
The system of government in a nation.
Collectivism: (kolektivisme)

A political system that stresses the primacy of

collective goals over individual goals.
Advocated by Plato in the Republic.
In modern times, the Socialists advocate Collectivism.

Socialism:

Trace intellectual roots to Karl Marx.

Argued that the pay of workers does not reflect the
full value of their labor.
Advocated state ownership of production, distribution,
and exchange (businesses), thereby ensuring that workers were
fully compensated for their labor.(kepemilikan sumber penting
oleh negara agar distribusi merata)
Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Political Systems
The system of government in a nation.
Individualism:

Opposite of Collectivism.
Individual should have freedom in political and economic
pursuits.(kebebasan individu dlm keg ekonomi)
Advocated by Aristotle.
Private property is more highly productive than
communal property and will thus stimulate progress.
Revived during the 16th century in England and the
Netherlands.
Hume (1711-1776)
Adam Smith (1723-1790)
John Stuart Mill (1806-1873)
Embodied in the U.S. Declaration of Independence.

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Democracy and Totalitarianism

Democracy

Totalitarianism

Government by the
people, exercised
either directly or
through elected
representatives.

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Government in which
one person or political
party exercises absolute
control over all spheres
of human life and
opposing political
parties are prohibited.

Economic Systems
Market Economy:
All productive activities are privately owned.

Command Economy:
Goods and services produced, their quantity, and prices
are determined by the government.

Mixed Economy:
Parts of the economy are left to private ownership and
free market mechanisms while other sectors are stateowned and have government planning.

State-Directed Economy:
The state plays a significant role through its industrial
policy and setting national goals.

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Differences in Economic
Development

Gross National Product (GNP)

Common yardstick for measuring economic

activity.
Measures total value of goods and services
produced annually.

Doesnt consider the differences in costs of

living.

Purchasing Power Parity.

Uses U.S. cost of living for basis of
adjustment among countries.
Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Both give
a static
picture of
development

Spread of Democracy
Why?

1. Totalitarian regimes failed to deliver

economic progress to the vast bulk of their
populations.
2. New information and communications
technologies, Internet, have broken down
the ability of the state to control access to
uncensored information.
3. Economic advances of the last quarter century
have led to the emergence of increasingly
prosperous middle and working classes who have
pushed for democratic reforms.

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

The Nature of Economic Transformation

The shift to market-based economies entails:
Deregulation

Removal of legal restrictions to free

markets.

Privatization

Transfer of state ownership of property into

private hands.

Legal Systems

Creation of systems to protect property

rights.

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

What is Culture?
A system of values
and norms shared
among a group of
people and, when
taken together,
constitute a design
for living.

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Norms and Values

Norms:
Social rules and guidelines that
prescribe appropriate behavior
in particular situations.
Folkways:
Routine conventions of
everyday life.

Mores:
Central to functioning of society
and its social life.

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Values:
Abstract ideas about what
a group believes to be
good, right, and desirable.
The bedrock of culture.
Have emotional
significance.
Freedom.

Determinants of Culture
Economic
Philosophy

Education

Language

Culture:
Norms and
Value
Systems

Religion

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Political
Philosophy

Social
Structure

Social Structure
Individual
Western

Mobile
Managers

Entrepreneurship

Group
two or more individuals
with a shared sense
of identity

Group
Eastern
Identity
Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Hard to
Build
Teams

Nonmobile
Managers

Lack
of
Loyalty

Lack of
Entrepreneurship

Lifetime
Employment

Social Stratification
Typically defined by family
background, occupation,
and income.

Caste:
Virtually no mobility

Class:
some social
mobility

Class Consciousness:
May play a role in
a firms operations

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Religion
Shared beliefs and rituals concerned with the
realm of the sacred.
Ethical Systems:
Moral principles or values used to guide and shape
behavior.

Shapes attitudes toward work and

entrepreneurship and can affect the cost of
doing business.

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Language
Allows people to communicate.
Structures the way the world is perceived.
Directs attention to certain features of the world
rather than others.
Helps define culture.
Creates separatist tendencies?

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung

Education
Formal education
supplements family role
in teaching values
and norms

For intl business, it is a

determinant of national
competitive advantage
Medium to learn
language, conceptual,
and math skills

Cultural norms such as

respect, obedience, honesty
Value of personal
achievement and
competition

Focus on facts of social

and political nature
of society
Obligations of
citizenship

Ratih Hurriyati, Tata Niaga Manajemen Bisnis, UPI - Bandung