Description
how political runs in several country
Chapter - 4
Introduction Political environment ? Types of political system ? Political Risk ? Factor that contribute to political risk ? Analysis of political risk ? Management of political risk
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Political environment play a vital role in any type of business by providing several type of rules and regulation. ? By this topic we should get to know that how the political environment help and effect in our business and also the type of political systems , there risk , the factor that contributes to political risk , analysis of political risk and how to manage the political risk.
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Political systems can be classified on two points,
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Based on the mode of gaining of power.
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Based on the number of parties.
Classification based on the mode of gaining power?
In this the political system classified into parliamentary type like in India in which the citizens of country elect the parliamentary govt. and the govt. gives important to the wishes and desires of the people it represent
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In this political system based on the number of parties actives in a country, this political establishment can be classified into 4 typesSingle-party – This party has absolute power. Two-party – In this there is 2 major groups with differing political philosophies compete for control of the govt. Multiparty –In this there is no single party have the strength to form the govt. so they want to collaborate with another small party to form the govt. One-party dominated system-In this party only one party is strong enough to form the govt. although there is many parties in dominated system.
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Political risk refers to political action that has the negative impact on a firm’s value. “The process of establishing a cause-and-effect relationship between political factors and business income is called political risk analysis. Political risk effect both in micro and macro in micro its effect like regulation of certain industries adversely affect the value of a firm or firm within that industry, and in macro its effect on war and antiglobalization efforts affect the value of all firms in the country.
Companies operating internationally have to deal with –
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Foreign politics – The political environment in the host country is referred to as foreign politic. Domestic politics - The company may face problem due to a political crisis in its parent country International politics- Political relation between two countries also effect the environment of business quality.
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Nature of political risk occur by some govt. policies which adversely affect the business environment and these policies areNon convertibility of currency, preventing repatriation of profits ? Nationalization and inadequacy of compensation ? Domestic political violence ? Damage caused by terrorist attacks
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Social Unrest ? Attitude of nationals ? Policies of the host govt.
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Political risk analysis is an ongoing function and is not restricted to the initial investment decision. Publication of political analysts, international rating agencies and the views of the employees of foreign subsidiaries, are some of the source of information on political risk.
Political risk involves both macro and micro analysis. ? Macro analysis deals with political stability, composition of the ruling party, the strength of the opposition parties in the country. ? Micro analysis deals with the impact of govt. policies and political changes on the business of both the firm and the industry.
Companies operating internationally employ different strategies to reduces their political risk. The strategies techniques are –
Integrative technique – Company adopted this techniques to blend with the host country’s ethos ? Protective/defensive techniques – Company can minimize the political risk they face.
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THANKS YOU…..
doc_396539090.pptx
how political runs in several country
Chapter - 4
Introduction Political environment ? Types of political system ? Political Risk ? Factor that contribute to political risk ? Analysis of political risk ? Management of political risk
?
Political environment play a vital role in any type of business by providing several type of rules and regulation. ? By this topic we should get to know that how the political environment help and effect in our business and also the type of political systems , there risk , the factor that contributes to political risk , analysis of political risk and how to manage the political risk.
?
Political systems can be classified on two points,
?
Based on the mode of gaining of power.
?
Based on the number of parties.
Classification based on the mode of gaining power?
In this the political system classified into parliamentary type like in India in which the citizens of country elect the parliamentary govt. and the govt. gives important to the wishes and desires of the people it represent
?
In this political system based on the number of parties actives in a country, this political establishment can be classified into 4 typesSingle-party – This party has absolute power. Two-party – In this there is 2 major groups with differing political philosophies compete for control of the govt. Multiparty –In this there is no single party have the strength to form the govt. so they want to collaborate with another small party to form the govt. One-party dominated system-In this party only one party is strong enough to form the govt. although there is many parties in dominated system.
? ?
?
?
?
Political risk refers to political action that has the negative impact on a firm’s value. “The process of establishing a cause-and-effect relationship between political factors and business income is called political risk analysis. Political risk effect both in micro and macro in micro its effect like regulation of certain industries adversely affect the value of a firm or firm within that industry, and in macro its effect on war and antiglobalization efforts affect the value of all firms in the country.
Companies operating internationally have to deal with –
?
Foreign politics – The political environment in the host country is referred to as foreign politic. Domestic politics - The company may face problem due to a political crisis in its parent country International politics- Political relation between two countries also effect the environment of business quality.
?
?
Nature of political risk occur by some govt. policies which adversely affect the business environment and these policies areNon convertibility of currency, preventing repatriation of profits ? Nationalization and inadequacy of compensation ? Domestic political violence ? Damage caused by terrorist attacks
?
Social Unrest ? Attitude of nationals ? Policies of the host govt.
?
? ?
Political risk analysis is an ongoing function and is not restricted to the initial investment decision. Publication of political analysts, international rating agencies and the views of the employees of foreign subsidiaries, are some of the source of information on political risk.
Political risk involves both macro and micro analysis. ? Macro analysis deals with political stability, composition of the ruling party, the strength of the opposition parties in the country. ? Micro analysis deals with the impact of govt. policies and political changes on the business of both the firm and the industry.
Companies operating internationally employ different strategies to reduces their political risk. The strategies techniques are –
Integrative technique – Company adopted this techniques to blend with the host country’s ethos ? Protective/defensive techniques – Company can minimize the political risk they face.
?
THANKS YOU…..
doc_396539090.pptx