The Management of International Enterprises: A Socio-Political View

By Monir H. Tayeb | Go to book overview

1
The Significance of Socio-Political Influences on International Business Development

INTRODUCTION

This chapter discusses major historical and current economic, political and cultural factors that could lead to the competitive advantage of some nations over others in the international market. The chapter includes examples of both successful and unsuccessful nations to illustrate the relationship between these factors and their current standing in the business world. The success of these nations will be judged according to both economic and non-economic indicators, such as the state of health, literacy rate, per capita income and energy, pattern of income distribution, presence of their companies and products in the international market, and the like.

Currently, although the world is no longer divided along political and ideological lines, it is still divided into ‘haves’ and ‘have nots’. In historical terms we are still close to a time when the world was dominated by no more than a dozen powers from what we now term the North (Arnold, 1989). Much of the rest of the world belongs to the South. The ‘haves’ are the rich industrialised countries mainly situated in the northern hemisphere. They are characterised by high per capita income, high GNP, the manufacture of semi-processed and finished goods, the use of computers, capital-intensive technology, high per capita consumption of electricity and other sources of energy, a low level of natural resources relative to less-industrialised nations, mechanised agriculture, high rates of literacy, and long life expectancy.

The ‘have nots’ are the poor countries with predominantly agricultural economies mainly situated in the southern hemisphere. They are characterised by dense population, low per capita income, a low rate of literacy, high rates of infant mortality, short life expectancy, largely non-mechanised agriculture, and the export of usually one and sometimes two commodities, such as crude oil and cash crops. Given the disadvantages suffered by people in the ‘have not’ group and their

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