POLITICAL SYSTEMS

1
POLITICAL SYSTEMS

• DEMOCRACY
• TOTALITARIANISM

2
DEMOCRACY

• Presidential Form
• Parliamentary System
• Various Combinations

3
Basic Political Ideologies

• Democracy
• Democratic systems involve wide participation by
  citizens in the decision-making process
• In representative democracy, majority rule is
  achieved through periodic elections
• Factors for evaluating freedom are
• Political rights
• Civil liberties
• Political rights include
• Fair and competitive elections
• Power for elected representatives
• Ability to organize
• Safeguards on rights of minorities

4
TOTALITARIANISM

• SECULAR
• THEOCRATIC

5
Basic Political Ideologies

• Totalitarianism
• In a totalitarian system, decision making is
  restricted to a few individuals
• Theocratic totalitarianism is the form prevalent
  in Muslim countries. With secular
  totalitarianism, control is often enforced
  through military power
• Communism is a form of secular totalitarianism
  that relates political and economic systems

6
The Impact of the Political System on Management
Decisions

• There is a dichotomy between governmental control
  and consumer control of the political system and
  the economy
• Managers need to understand the critical
  functions that a government performs in the
  economy
• The political process affects international
  business through regulation of cross-border
  transactions

7
Secular Totalitarianism

• Fascism
• Authoritarianism
• Communism

8
POLITICAL RISK

• Changes in the Political Climate that might
  adversely affect business operations

9
CAUSES of POLITICAL RISK

• Opinions of Political Leadership
• Civil Disorder
• External Relations