+ GBE: International Political Environment

Poppy S. Winanti

Emai l : poppysw@ugm.ac . id Web s i t e : h t t p : / / p o p py s w. s t a f f . u g m . a c . i d

MM UGM 25 February 2015

+Overview Understanding

business environment

External environments of Business

Changing profile of the global business environment

Transforming events Understanding

globalisation

Assignment

Understanding Business Environment

Environment is the total of several external and internal forces that affects the functions of business.

Every business organisation principally consists of internal environment factors and set of external environmental factors.

Environment factors influence to business directly and indirectly that control, manage and administration of business activities in the organisation.

(Hirriyapa, 2008)

+The External Environments of Business

External Environment Everything outside an organizations

boundaries that might affect it The domestic business environment The global business environment The technological environment The political environment The sociocultural environment The economic environment n The legal/regulatory environment

(Ebert & Griffin, 2009; McKenna, n.d)

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+The External Environments of Business (cont.)

Global Business Environment The international forces that affect a business:

International trade agreements

International economic conditions

Political unrest

International market opportunities

Suppliers

Cultures

Competitors

Currency values

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(Ebert & Griffin, 2009)

+Changing profile of the global business environment

Trade liberalisation

Technological development & innovation

Attitudes toward MNCs

International terrorism

Globalisation

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(Fatehi, n.d; Rugman & Collison, 2009)

+What is globalisation?

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The globalisation scholars and the elephant (Steger, 2003)

What is globalisation?

Globalisation is "the process of social, political, economic, cultural, and technological integration among countries around the world

(Hodgetts, et. al, 2006)

+Political

nThe extension of political power and political activity across the boundaries of the modern nation-state (Held, et.al: 1999) n The principle of state sovereignty n The growing impact of intergovernmental, international non-

governmental organizations, transnational pressure groups , regional and global governance

n Global problems: terrorism, environmental problems

nChallenges the traditional distinctions between the domestic/international, inside/outside, territorial/non-territorial

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+Global security & terrorism

n Terrorism: a form of political violence that aims to achieve its objectives through creating a climate of fear and apprehension

n Problematic: one persons terrorist can be anothers freedom fighter

(Heywood, 2011)

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+Global security & terrorism (contd)

More Spending on Security Technology: Communications, Computers, Military and Police, and Surveillance at Local, Regional and Global Levels

Increased Spending and Monitoring of Economic and Financial Transactions

Cost of Doing Global Business Increases and Speed of Transactions Decreases

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Source: Kaushik, n.d

+Economic

nThe intensification and stretching of economic interrelations across the globe (Steger, 2003) n Transnational corporations n International economic institutions n Regional trading systems

nIts measured in respect of the growing intensity, extensity, and velocity of world wide economic interactions and interconnectedness from trade through production and finance, to migration (McGrew, 2005)

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+ Cultural: Americanisation or Glocalisation?

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nThe intensification and expansion of cultural flows across the globe (Steger, 2003)

nHomogenized popular culture Vs. Glocalisation

The drivers of Globalisation

(McKenna, n.d)

Development of new

technology

Reduced barriers to

trade

Search for competitive advantage

+The Sustaining Forces of Globalisation

Greater policy liberalisation

Greater efficiency of

business

Greater market access

Increased flows of goods,

services, and people

(McKenna, n.d)

+Group/Individual Assignment

Short essay on international political environment

Based on an empirical study, analyse the impact of one of the following international political features for business activities : international trade regulations

technological innovation globalisation (economic, political, cultural) regional agreements

- greater policy liberalisation

- political unrest

- international terrorism, etc

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+Assignment (contd)

nEssay must focus on both opportunities and threats posed by international political enviornment for business activities

The length of the essay is between 1.000 1.500 words (or 4 5 pages, Times New Roman, 12 fonts, 1,5 lines)

Essay must be submitted on 18 March 2015

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