National Differences in Political Economy
• Understand how the political systems of countries differ.
• Understand how the economic systems of countries differ.
• Understand how the legal systems of countries differ.
• Be able to explain what determines the level of economic development of a nation.
• Discuss the macro-political and economic changes taking place worldwide.
• Describe how transition economies are moving towards market based systems.
• Articulate the implications for management practice of national differences in political economy.
This chapter discusses differences in national political, ...view middle of the document...
Begin by drawing the following scale on the board: ______________________________________________________
Then ask students to provide some examples of what might describe a collectivist system, where does Canada’s national healthcare system put it, which countries might be considered democratic, where should China be placed, and so on.
Finally, move to a discussion of how differences in political economy present both opportunities and threats for business. Managers must analyze each national market that they participate in and identify specific ways in which the political economy of that nation could support or threaten the company’s business model.
If there are foreign students in the class or students with foreign experience, you might draw on their observations of differences these dimensions impose on the practice of business.
OPENING CASE: Chavez’s Venezuela
The opening case explores the political and economic situation in Venezuela since the election of Hugo Chavez as president in 1998. Chavez, who ran on a platform against corruption and economic mismanagement, faced a country mired in recession. His strategy involved drafting a new constitution that keeps him in power until 2013, and reconfiguring the Supreme Court. As a result, Venezuela is now considered to be only “partly free.” Today, unemployment remains high, and poverty continues to rise, corruption is rampant, and there is a move to privatize certain industries, with the oil industry being a particular target. Discussion of the case can revolve around the following questions:
1. How has the political landscape of Venezuela changed under Chavez?
2. Discuss how Venezuela’s rampant corruption is impeding the country’s economic growth.
3. Imagine the company you work for has operations in Venezuela. How would you react to the changes under Chavez?
This lecture outline follows the Power Point Presentation (PPT) provided along with this instructor’s manual. The PPT slides include additional notes that can be viewed by clicking on “view”, then on “notes”. The following provides a brief overview of each Power Point slide along with teaching tips, and additional perspectives.
Slides 2-3-2-4 Political Economy
The political, economic, and legal infrastructure of a nation has a major influence on the way managers make decisions. Political systems have two dimensions: the degree of collectivism versus individualism, and the degree of democracy versus totalitarianism.
These dimensions are interrelated; systems that emphasize collectivism tend towards totalitarian, while systems that place a high value on individualism tend to be democratic.
However, a large gray area exists in the middle. It is possible to have democratic societies that emphasize a mix of collectivism and...