In this chapter we will distinguish among the main types of political systems, identify the origins of political risk and how managers can reduce its effects, list the main types of legal systems and explain how they differ, describe the major legal issues facing international companies, and explain how international relations affect international business activities. A political system includes the structures, processes, and activities by which a nation governs itself. A country's political system derives from the history and culture of its people. Factors such as population, age and race composition, and per capita income influence a country's political system.
Swiss citizens vote directly on many national issues.
Participation occurs when people voice their opinions, vote, and show general approval or disapproval of the political system. Wide participation occurs when people who are capable of influencing the political system do so. Narrow participation occurs when few people participate. The world's two extreme political systems are anarchism and totalitarianism . Pluralism falls in-between with the belief that both private and public groups play important roles in a nation's political activities.