MAN 3600 FSU Kim Exam 2
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1. Country Risk Exposure to potential loss or adverse effects on company operations and profitabil-
ity caused by developments in a country's political and/or legal environments.
2. Dimensions of -Harmful or unstable political system
Country Risk: -Laws and regulations unfavorable to foreign firms
-Inadequate or underdeveloped legal system
-Bureaucracy and red tape
-Corruption and other ethical blunders
-Government intervention, protectionism, and barriers to trade and investment
-Mismanagement or failure of the national economy
3. Two Types of 1. Systematic Country Risk- affects all industries and firms in a country.
Country Risk:
2. Unsystematic Country Risk- affects only a subset of firms.
4. Sources of Coun- -Government
try Risk: Political -Political parties
System -Legislative bodies
-Lobbying groups
-Trade unions
-Other political institutions
5. Sources of Coun- Laws, regulations, and rules that aim to:
try Risk: Legal -ensure order in commercial activities
System -resolve disputes
-protect intellectual property
-tax economic output
6. Political System A set of formal institutions that constitute a government. Three major types of
systems. Includes legislative bodies, political parties, lobbying groups, and trade
unions. Also defines how these groups interact with each other.
7.
, MAN 3600 FSU Kim Exam 2
Study online at https://quizlet.com/_68etag
3 Major Types of 1. Totalitarianism
Political Systems: 2. Socialism
3. Democracy
8. Legal System A system for interpreting and enforcing laws. Incorporates institutions and pro-
cedures for ensuring order and resolving disputes in commercial activities. Four
types of systems.
9. 4 Types of Legal 1. Common Law
Systems 2. Civil Law
3. Religious Law
4. Mixed Systems
10. Functions of Po- -Provide protection from external threats.
litical Systems -Ensure stability based on laws.
-Govern the allocation of valued resources among the members of a society.
-Define how society's members interact with each other.
11. Totalitarianism Political system where government controls all economic and political matters.
-Either theocratic (religious) or secular
-Led by a dictator
-Sustained via secret police, propaganda, regulation of free discussion and criti-
cism.
-Tend to have a lot of government intervention and bureaucracy.
-Ex. Cuba, Middle East, North Korea
12. Socialism Political system where capital is vested in the state and used primarily as a means
of production for use rather than for profit.
-Group welfare outweighs individual welfare
-Government's role is to control the basic means of production, distribution, and
commercial activity.
-Occurs often as social democracy (Western Europe, Brazil, India)
-Corporate income tax rates are higher
Study online at https://quizlet.com/_68etag
1. Country Risk Exposure to potential loss or adverse effects on company operations and profitabil-
ity caused by developments in a country's political and/or legal environments.
2. Dimensions of -Harmful or unstable political system
Country Risk: -Laws and regulations unfavorable to foreign firms
-Inadequate or underdeveloped legal system
-Bureaucracy and red tape
-Corruption and other ethical blunders
-Government intervention, protectionism, and barriers to trade and investment
-Mismanagement or failure of the national economy
3. Two Types of 1. Systematic Country Risk- affects all industries and firms in a country.
Country Risk:
2. Unsystematic Country Risk- affects only a subset of firms.
4. Sources of Coun- -Government
try Risk: Political -Political parties
System -Legislative bodies
-Lobbying groups
-Trade unions
-Other political institutions
5. Sources of Coun- Laws, regulations, and rules that aim to:
try Risk: Legal -ensure order in commercial activities
System -resolve disputes
-protect intellectual property
-tax economic output
6. Political System A set of formal institutions that constitute a government. Three major types of
systems. Includes legislative bodies, political parties, lobbying groups, and trade
unions. Also defines how these groups interact with each other.
7.
, MAN 3600 FSU Kim Exam 2
Study online at https://quizlet.com/_68etag
3 Major Types of 1. Totalitarianism
Political Systems: 2. Socialism
3. Democracy
8. Legal System A system for interpreting and enforcing laws. Incorporates institutions and pro-
cedures for ensuring order and resolving disputes in commercial activities. Four
types of systems.
9. 4 Types of Legal 1. Common Law
Systems 2. Civil Law
3. Religious Law
4. Mixed Systems
10. Functions of Po- -Provide protection from external threats.
litical Systems -Ensure stability based on laws.
-Govern the allocation of valued resources among the members of a society.
-Define how society's members interact with each other.
11. Totalitarianism Political system where government controls all economic and political matters.
-Either theocratic (religious) or secular
-Led by a dictator
-Sustained via secret police, propaganda, regulation of free discussion and criti-
cism.
-Tend to have a lot of government intervention and bureaucracy.
-Ex. Cuba, Middle East, North Korea
12. Socialism Political system where capital is vested in the state and used primarily as a means
of production for use rather than for profit.
-Group welfare outweighs individual welfare
-Government's role is to control the basic means of production, distribution, and
commercial activity.
-Occurs often as social democracy (Western Europe, Brazil, India)
-Corporate income tax rates are higher
