This chapter focuses on typical institutions and how their absences or weaknesses create voids. Emerging markets are characterized by institutional voids. The chapter discusses basic definition of institutions and the effects people have on organizations and individuals. It exposes to critical elements of the political environment with a focus on emerging markets. It then looks at some of the key aspects of the legal system and the different types of legal systems around the world. The chapter also examines the legal system in the light of emerging markets and some of the world's most important religions, another key institution that affects international business. It discusses key international business implications of each institution and ways that multinational companies (MNCs) can operate to deal with challenges inherent in institutional voids. The economic system refers to the structures and processes that guide the conduct of business activities that lead to the production of goods and services consumed by the members of a society.