6- 0 © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter 6 The Political Environment A Critical Concern

6- 1 © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Political Risks of Global Business Confiscation Expropriation Domestication Economic Risks  Exchange Controls  Local-Content Laws  Import Restrictions  Tax Controls  Price Controls  Labor Problems Political Sanctions Political and Social Activity Violence

6- 2 © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill International Terrorist Incidents By Region SOURCE:

6- 3 © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill International Incidents By Type of facility, SOURCE:

6- 4 © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill International Casualties by Terrorist Incidents, SOURCE:

6- 5 © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The MNCs Publics and Issues Church Labor Suppliers Customers Competitors Pressure groups Stockholders Academia General public Minority groups Public media Governments and agencies Conservationists Financial community Nationalism Industrial democracy Environment protection Energy and raw materials Taxes Incentives and restrictions Investment approvals and permits Personal relations Attracting personnel Mergers and acquisitions Money and credit Legitimacy Prices and profits Image (Company and product) Consumerism Women’s liberation Union relations Equal opportunities PublicsIssues* * The issues do not correspond with the publics listed. SOURCE: Adapted from “How Embattled MNCs Can Devise Strategies for External Affairs,” Business International, December 12, 1975, p. 394.

6- 6 © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Strategies to Lessen Political Risk Joint Ventures Investment Base Expansion Marketing and Distribution Licensing Planned Demonstration Other