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three
1. Understand how politics affects international trade and
foreign investment.
2. Distinguish between different types of political risk.
3. Discuss how Multinational Enterprises work with political
organizations and constituencies that affect their
operations and performance.
4. Identify the challenges of working in countries that have
differing political systems from home country.
5. Identify areas of jurisdiction with which Multinational
Enterprises should be concerned.
6. Identify some key international laws and issues that affect
Multinational Enterprises, like product liability, competition,
and intellectual property.
Political Environment:
Burger King Israel
• A Burger King franchisee opened a restaurant in Ma’aleh
Adumim, which is a suburb of Jerusalem under Israeli
control.
• Unfortunately, the restaurant was placed on the wrong
side of the 1967 border, so the Palestinian government
revoked the license of the restaurant to operate.
• Who had jurisdiction in this instance? Israel or the
Palestinian Authority?
• What types of political action will resolve this issue?
The Political Environment
• Political Pressure
• Commercial Pressure
• Financial Pressure
• Tied Aid
• Gifts, Favors
• Defense, Arms Sales
• Revocation Of Laws
• Visas
Political Risk
• Common law
• Civil law
• Theocratic law
The Common Law System