International Business Environment - Lesson Summary
Business decisions, particularly strategic ones need clear identification of the relevant variables and a detailed analysis in order to understand their impact and implications on the organization.
The purpose of conducting an environmental analysis is to identify the existing and emerging threats and opportunities to help formulate appropriate strategies.
The Macro approach to environmental analysis takes a broad view of the business environment with a long-term perspective and it develops alternative scenarios of the future.
A scenario is a detailed description of how certain events may occur in the future and their consequences on the organization.
The Micro approach to environmental analysis takes a narrow view of the environment and then forecasts the immediate future environment on the basis of ongoing environmental monitoring and it derives the implications on the organization and the entire industry.
A PESTEL analysis is a widely used tool that helps present a big picture of a firm’s external environment, particularly as it relates to foreign markets. It can help marketers assess whether macro-economic factors are affecting an organization.
Social stratification refers to a social differentiation whereby members of society are grouped into socioeconomic groups based on their gender, occupation, social status and wealth.
Every country has its own political and legal system to maintain a recognized procedure for allocating valued resources. These systems are useful in making decisions about the duties and responsibilities of citizens and their rights.
Countries with the individualistic orientation encourage businesses to support the good of the community by promoting fair and just competition.
Democracy is a political system that endorses the rule of law and grants the voting citizenry the power to alter the law and structure of the government.
The Freedom in the World Index is an annual global report on political rights and civil liberties which is composed of numerical ratings and descriptive texts for each country and a select group of territories.
The legal system in a country is the mechanism for creating, interpreting and enforcing the laws in a specified jurisdiction.
All countries legislate a broad range of laws in order to regulate business activities such as the investment of capital, the payment of dividends to foreign investors and decisions about internal structures and operations.
The rule of law institutes a just political and social environment and guarantees the enforceability of commercial contracts, business transactions and safeguards personal property.
The World Justice Project Rule of Law Index is the world’s most comprehensive dataset that relies principally on primary data, measuring each country’s adherence to the rule of law from the perspective of ordinary people and their experiences.
Intellectual property refers to creative ideas, expertise, or intangible insights that grant its owner a competitive advantage.
Intellectual property rights refer to the right to control and derive the benefits from writing, inventions, processes and identifiers.
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