Political-Legal, Socio-Cultural, and Economic Environment

1 Political-Legal, Socio-Cultural, and Economic Environment Multinational businesses operate in local and global environments, varying depending on each country's political, economic, social, and cultural values and norms. The domestic political, legal, socio-cultural, and economic environments differ from the global, underlining the need for the management to study each environment keenly to manage the company properly. The paper will offer a study of the domestic environment in the US in contrast to the global environment, with Saudi Arabia as a reference point.

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2 The Political and Legal Environments/Structures of the Home and Global The US has a stable and predictable political system where democracy and respect for human rights and freedoms are highly valued. Public participation is encouraged to give the citizens a say in the government's policies (Hofstede, 2001). Elections are always considered free, transparent, and fair, implying there is little worry about political violence.

Legal The US legal structure is split into state and federal. Each state has its laws that govern its affairs. State laws mainly regulate business companies, although federal laws also apply based on the nature of the business. The US upholds constitutionalism in handling local and foreign businesses (Hofstede, 2001). The country is also known for its strong protection of Intellectual Property Rights. The judiciary is independent of the meddling of the executive arm, and it practices transparency in the prosecution of cases. The US legal system is more secular and does not emphasize religious correctness.

Internationally, each country has its own political and legal system that contrasts with the US's. In Saudi Arabia, the political system is monarchical, which guarantees political stability because locals embrace it as their ideal political system. However, unlike in the US, the state restricts human rights and freedoms. Freedoms of speech and association are highly controlled.

Saudi Arabia has a unitary constitution, making it easier for foreign businesses to trade (Hofstede, 2001). However, the executive controls the Saudi Arabian judiciary compared to the US. Moreover, the Saudi Arabian legal system is embedded in Islamic values and norms to emphasize religious correctness.

The Socio-Culture of the Domestic and Global Environments

3 The socio-cultural environments in the US and Saudi Arabia differ in various ways, as highlighted in Hofstede's analysis below: Power Distance Index The US scored below average in the power distance index, while Saudi Arabia scored highly, two times the American score. The score means there are more inequalities in power distribution in Saudi Arabia than in the US (Hofstede, 2001). The difference is caused by each country's political culture, monarchical versus democratic.

Individualism versus Collectivism The US embraces individualism more, while Saudi Arabian culture aligns with collectivism. In the US, people value privacy and personal achievement more than in Saudi Arabia, where there is a strong emphasis on community well-being and success.

Masculinity versus Femininity The US and Saudi Arabia are masculine societies, with males controlling much power and seen as more powerful than females (Hofstede, 2001). However, Saudi Arabia is more masculine than the US due to its Islamic values and strong conservatism. While in the US, there is a growing sense of equality between men and women, especially in performing domestic chores and access to political power, in Saudi Arabia, gendering or roles are stressed, and women's access to political power is more limited.

Uncertainty Avoidance Index The US scores below average in uncertainty avoidance, while Saudi Arabia scores above average. This score implies that Americans are more likely to embrace new ideas and take risks than Saudi Arabians.

Long- Versus Short-Term Orientation

4 The US has a low score for long-versus short-term orientation, implying that there is more emphasis on short-term gains over long-term. Principles will likely be compromised to advance short-term gains (Hofstede, 2001). On the other hand, in Saudi Arabia, the score is high, which means that the focus is on long-term achievement and principles of protection.

Indulgence versus Restraint The US scores high for indulgence versus restraint, while Saudi Arabia scores lower. The scores imply that the US culture promotes gratification of personal passions, emotions, success, leisure, and fun (Hofstede, 2001). On the contrary, the Saudi Arabian culture emphasizes restraint and living according to societal values and norms.

Comparison and Contrast of the Domestically and Global Economic Environment McDonald's Corporation is an American fast-food chain with a presence worldwide. The company operates more than 200 restaurants in Saudi Arabia. The economic environment in the US and Saudi Arabia differs in various ways that impact McDonald's Corporation's business.

First, the US is the largest global economy, more than 24 times the Saudi Arabian economy. The US is a developed economy while Saudi Arabia is developing, a factor that impacts the levels of manufacturing industry in both countries (Galbraith, 2017). Saudi Arabia is less industrialized as compared to the US. Moreover, the US economy is more diverse and stable than the Saudi Arabian economy, which mainly depends on oil and natural gas. The differences in the economies of the two countries in terms impact the purchasing power. According to Rostow (2010), economic development levels influence businesses' consumption and performance. The US has a higher purchasing power than Saudi Arabia, which makes it ideal for large businesses.

5 The cost of labor in the US and Saudi Arabia is high; both countries rely on immigrants to bridge deficits in labor supply. However, Saudi Arabia has relatively cheap labor than the US. The cost of labor influences the expansion of McDonald's and profit-making.

The exchange rates between the US. The dollar and Saudi Riyal are another economic factor that marks the differences between their economies. The dollar is about three times stronger than the Riyal, and fluctuations in exchange rates affect the flow of money in and outside McDonald's business in Saudi Arabia. Nevertheless, the two currencies are stable.

Conclusion The domestic and global political-legal, socio-cultural, and economic environment differs, impacting the choices the business company has to make. The US political and legal environment is premised on democracy and constitutionalism, which has resulted in a stable democracy that promotes transparency and accountability. The monarchical political system in Saudi Arabia guarantees political stability but little respect for human rights and freedoms. The legal structure promotes some degree of constitutionalism but with executive influence and much emphasis on Islamic values. The two countries' socio-culture of the domestic and global environments have many differences, with the US showing a lower power distance than Saudi Arabia. Americans are more individualistic, while Saudi Arabians value collectivism by emphasizing brotherhood. Both societies are masculine, and Saudi Arabians tend to be more restrained than American in their indulgence. Americans are more likely to take risks and embrace new ideas than Saudi Arabians. Economically, America is the largest, most stable economy with higher purchasing power than Saudi Arabia.

6 References Galbraith, J.K. (2017). Money: Whence it came, where it went. Princeton University Press.

Hofstede, G. (2001). Culture's consequences: Comparing values, behaviors, institutions, and organizations across nations. SAGE Publications.

Rostow, W.W. (2010). Concept and controversy: Sixty years of taking ideas to market.

University of Texas Press.