International environment: economic aspects political and legal aspects cultural aspects

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International environmenteconomic
aspectspolitical and legal aspectscultural
aspects

• Elena Horska

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Aspects of the international environment
Home country environment
Host country environment
General international environment
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Kinds of information typically available/needed

• Economic, social, political data on individual
  countries
• Summary and detailed information on aggregate
  global market transactions
• Individual reports on foreign firms
• Specific export opportunities

• Lists of potential overseas buyers, distributors,
  and agents for various products in different
  countries
• Information on relevant government regulations
• Foreign credit information

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Major types of political risk in the host
country environment
Ownership risk
Operating risk
Transfer risk
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Effects of political risk

• Import restrictions
• Local content laws
• Exchange controls
• Market control
• Price controls

• Tax controls
• Labour restrictions
• Change of government party
• Nationalization
• Domestication

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How does the threat of terrorism affect
business?

• Short and long-term decline of customer demand
• Unpredictable shifts in the supply chain
• Government policies and laws
• Macroeconomic effects such as falling stock
  market values
• Deteriorating relations among countries

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• The international
• economic environment

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Classifying countries by income

• Less developed countries (LDCs)
• Newly industrialised countries (NICs)
• Advanced industrialised countries

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Benefits of regional integration
Trade creation
Greater consensus
Political cooperation
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EU China Business Summit 2010

• They called on China to grant better market
  access for European businesses, a better
  investment environment, stronger enforcement of
  intellectual property rights and the opening of
  public procurement. They also urged more respect
  of the rule of law and human rights. But there
  was no indication of any concession by Mr. Wen on
  any of these matters.

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EU China - India

• What challenges and obstacles do you see in doing
  business perspectivelly with
• China, India, EU countries
• from political, economic and socio-cultural
  aspects?

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• International
• cultural environment

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Culture

• Culture is the collective programming of the
  mind which distinguishes the members of one human
  group from another (Hofstede, 1980).
• It is the learned ways in which a society
  understands, decides and communicates.

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Characteristics of culture

• Culture is learned
• Culture is interrelated
• Culture is shared

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The visible and invisible parts of culture
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Halls Communication Context
Low-context cultures
High-context cultures
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The contextual continuum of differing cultures
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Globalization and changes in the culture

• Adoption of new cultural elements
• Cultural imperialism is the practice of promoting
  the culture or language of one nation in another.

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Westernization

• is related to the process of acculturation and/or
  enculturation.
• Acculturation refers to the changes that occur
  within a society or culture when two different
  gorups come into direct continuous contact. After
  the contact, changes in cultural patterns within
  either or both cultures are evident. In popular
  speech, Westernization can also refer to the
  effects of Western expansion and colonialism on
  native societies.

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Elements of culture

• Technology and material culture
• Language
• Education
• Religion

• Values and attitudes
• Aesthetics
• Religion
• Social institutions, social and political life

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The role of language in global marketing

• Language is important in information gathering
  and evaluation efforts
• Language provides access to local society
• Language capability is important to company
  communications
• Language enables the interpretation of context

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