1. Culture Environment
Culture is an integrated
system of learned
behavior patterns that are
characteristic of the
members of any given
society.

2. Elements of Social and Culture
Language (verbal
and nonverbal)
Religion Values and
Attitudes
Manners and
Customs
Material
Elements
Aesthetics
EducationSocial Institutions

3. Political Environment
• The Home-Country Perspective
• Host Country Political and Legal
Environment

4. The Home Country Perspective
Major areas of governmental activity that
are of concern to the international
business manager:
– Embargoes and Sanctions
– Export Controls
– Regulation of International
– Business Behavior

5. Host Country
• Political Action and Risk
– Varies widely from country to country
• Economic Risk
– Less dangerous, but more common

6. Three Types of Political Risk
• Ownership Risk
– Exposes property and life
• Operating Risk
– Interference with the ongoing operations of a
firm
• Transfer Risk
– Limitations on the outflow of funds

7. Political Risk May Involve
• Confiscation
– The government takeover of a firm without
compensation to the owners.
• Expropriation
– A form of government takeover in which the
firm’s owners are compensated.
• Domestication
– The government demands transfer of
ownership and management responsibility.

8. Economic Environment
• Economic Size
• Economic Systems
• Key Macroeconomic Indicators
• Economies in Transition