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International Business 240 Task 3 Political Economics and International Business

Political economics refers to an interdisciplinary social science branch focusing on the interrelationships among governments, individuals, and public policy (Martin et al., 2018). It examines the role of capitalism, communism, and socialism, and how it involves global politics and economy.

           PepsiCo’s move into the international marketplace was met with criticisms and other challenges. For instance, a range of issues emerges, which included reduced revenue, health concerns of the cola products the health experts claimed, criticism from environmentalists (Witt, 2019). PepsiCo struggled to tackle health and environmental concerns. Other than these concerns, PepsiCo encountered stiff competition in the global marketplace from Coca-Cola and other small rival beverage companies.

           Political systems involve processes involved with making official government decisions. In this case, major political systems comprise republic (government under the control of the governed); and democracy, for example, the U.S., and characterized by freedoms. Others include monarchy, dictatorship, and communism (Whitten et al., 2020).

           An economic system comprises a production system, allocation of resources, and distribution of goods/services (Martin et al., 2018). Major economic systems comprise a traditional economic system, as well as command, mixed, and market economic systems.

           Major legal systems are two: Civil law and common law. Culture affects legal systems in the sense that culture influences the establishment of laws that respect and value individuals’ rights and guarantee them from violation (Whitten et al., 2020).            Lastly, political factors affect international business, for example, changes in tax rates and government policies and actions, including a country’s political stability, and foreign trade regulations (Whitten et al., 2020). These factors affect the working of a global business firm. The lack of political stability directly influences international business.

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