What is politics?

Politics is the practice and theory of influencing other people on a civic or individual level.
The methods or tactics involved in managing a state or government.
The activities or affairs engaged in by a government, politician, or political party.
Before going to enter into international business as a businessman you should bear in your mind
three issues or things

Must discard the hope that you can easily apply the principles and practice of the
domestic business to foreign business.
Must accept the notion that political and legal system of different countries vary
Must realize that these differences can affect opportunity and threat.

Political system
A political system is the complete set of institutions, political party, interest group, relationship
between those institutions, Political norms and rules that direct their functions.

Function of political function

1. Interest articulation
2. Interest aggregation
3. Policy making
4. Policy implementation and adjudication

Political ideology
A political ideology is the collection of ideas that express the goal, theories, economic
diplomacy, and aim that constitute a sociopolitical program.

Types of political ideology

Here we will discuss two types of political ideology
1. Democracy
2. Totalitarianism

Democracy
Democracy is by the people, of the people, for the people-----Abraham Linkon

Characteristics of democratic political system

The fundamental element of democracy is FREEDOM. Freedom of speech, freedom of
association, freedom of movement, freedom of religious belief. Factors for evaluating freedom is
political right and civil liberties.

Freedom of opinion, expression, press and freedom to organize

Election in which voters decide who will represent them
An independent and fair court system
Nonpolitical bureaucracy and defense infrastructure ( OSD)
People have access to decision making process.
Protection of human and individual rights.

Totalitarianism
That every aspect of an individuals life should be controlled and dictated by a strong central
government.
Totalitarianism is people for the state but not state for the people. In totalitarianism system
decision making is restricted to individuals.

Authoritarianism --- one person has total control over all people.
Fascismto control of peoples minds and soul.

Democratic state
Freedom

Totalitarian state
Imposed authority

Right

Restricted participation

Stable business environment

Companies might pay briberies to government

Freedom and no censorship

The business law is vague

Political risks
Political risk is the chance that political decision, event, condition in a country will affect the
business environment in such way that lead investors to lose some or all of the value of their
investment.

Reason of political risks

Changing opinion of political leader

Frequently changing government

Civil disorder( 1/11-2007)
External relation( GSP)

Types of political risk

Political risk can be four types
1. Systematic- systematic political risk is created by changing public policy (investment
policy, fiscal policy etc) which is changed by changing government. RED TAPISM,
BUREAUCRATIC INTERFERENCE.
2. Procedural- in everyday people, product, funds move from one point to another point in
the global market but sometimes political action creates problem in this transaction. This
is called procedural risk like government corruption, labor disputes etc. due to procedural
risk Bangladesh has lost GSP advantage.
3. Distributive- political officials will decide which company enters into the country or in
the global market. USA has the highest level of distributive risk.
4. Catastrophic- catastrophic political risk comes from such kind political development or
activities that adversely affect the operation of all companies like ethnic discord, civil
disorder, war. It can be also happened by sudden natural disaster like flood, tornedo etc.