INTERNATIONAL POLITICAL ENVIRONMENT

MM UGM 21 March 2014

Dr. Poppy S. Winanti

Email: poppysw@ugm.ac.id Website: http://poppysw.staff.ugm.ac.id

OVERVIEW

Understanding business environment External environments of Business Changing profile of the global business environment Transforming events Understanding globalisation Group 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 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 (Ebert & Griffin, 2009)
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TRANSFORMING EVENTS (1)

TRANSFORMING EVENTS (2)

TRANSFORMING EVENTS (3)

CHANGING PROFILE OF THE GLOBAL BUSINESS ENVIRONMENT

Trade liberalisation Technological development & innovation Attitudes toward MNCs International terrorism

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

WHAT IS GLOBALISATION?

The globalisation scholars and the elephant (Steger, 2003)

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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
The extension of political power and political activity across the boundaries of the modern nation-state (Held, et.al: 1999)
The principle of state sovereignty The growing impact of intergovernmental, international non-governmental organizations, transnational pressure groups , regional and global governance Global problems: terrorism, environmental problems

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

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

Its 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?
The intensification and expansion of cultural flows across the globe (Steger, 2003) Homogenized popular culture Vs. Glocalisation

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CULTURAL (2)
Global values

Hybrid
Local values

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THE DRIVERS OF GLOBALISATION

Search for competitive advantage

Development of new technology

Reduced barriers to trade

(McKenna, n.d)

THE SUSTAINING FORCES OF GLOBALISATION

Greater policy liberalisation

Increased flows of goods, services, and people

Greater efficiency of business

Greater market access

(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)
Essay 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 10 April 2014

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