Multinational Corporation Political and Legal Environment Quiz

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Questions and Answers

In a two-party system, what dominates and reflects electoral fortunes?

Trade unions and interest groups

Government and opposition (correct)

Public opinion and political parties

Political constraints and risk

In an authoritarian political system, who claims absolute power to govern a state with no substantive accountability to its citizens?

Government

Trade unions

Individual(s) (correct)

Interest groups

In a multi-party system, where is the government likely to be?

In a coalition of parties (correct)

In accountability to the voting public

In power determines law

In constitutional framework

In a democracy, what is the system based on at a minimum?

Accountability to the voting public Signup and view all the answers

In a two-party system, what are the two broadly based parties likely to dominate?

Government and opposition Signup and view all the answers

In an authoritarian political system, what determines law?

Individual(s) Signup and view all the answers

In a multi-party system, what reflects a wide spectrum of views?

Many parties Signup and view all the answers

In a democracy, what ensures accountability to the voting public?

Regular, fair, and free elections Signup and view all the answers

In a two-party system, what are the key players that the MNC has to deal with politically likely to include?

Government, political parties Signup and view all the answers

In an authoritarian political system, what are the key players that the MNC has to deal with politically likely to include?

Government, political parties Signup and view all the answers

What is a recommended strategy to minimize outright investment risk?

Lease assets instead of buying Signup and view all the answers

Which factor is not considered a determinant of international management in the political-legal environment?

Inflation rates Signup and view all the answers

What is a key implication of political behaviors within a region for international management?

Extent of political interference Signup and view all the answers

Which action is not a recommended way to manage political risk?

Engage in high visibility acquisitions Signup and view all the answers

What is a suggested approach to managing political risk in international management?

Sign treaties to protect mutual investment Signup and view all the answers

Which factor shapes management practice within a given location in the political-legal environment?

Environmental protection laws Signup and view all the answers

What is a recommended way to minimize transfer risk in international management?

Source locally Signup and view all the answers

What is a key implication of national traditions for organizing work in international management?

Familiarity with concepts such as teamwork Signup and view all the answers

What is a recommended strategy to build political support in international management?

Building alliances with local partners Signup and view all the answers

What is a key implication of legal determinants in international management?

Laws related to intellectual property Signup and view all the answers

Which factor can alter transaction costs for multinational corporations (MNCs)?

Historical relationships between countries Signup and view all the answers

What type of risk is ownership risk for multinational corporations (MNCs)?

Political risk related to government intervention Signup and view all the answers

What legal systems impact MNC operations?

Common law and civil law Signup and view all the answers

What is an example of political risk for MNCs?

Government intervention in a company's operations Signup and view all the answers

What is the probability of disruption to MNC operations from political forces and events?

Political risk Signup and view all the answers

What challenge do MNCs face in relation to governments?

Navigating relationships with both host and home governments Signup and view all the answers

What do legal issues for MNCs include?

Rule of origin laws, competition regulations, and product liability laws Signup and view all the answers

What influences trade and investment dominance for MNCs?

Historical relationships between countries Signup and view all the answers

What is the main aim of MNCs in host countries?

Establishing a favorable trade and investment climate Signup and view all the answers

What is the challenge for MNCs in relation to legal systems?

Being subject to the laws of both their home and host countries Signup and view all the answers

Study Notes

Multinational Corporations: Navigating Political and Legal Environments

Elections in some countries offer few candidates, limiting choice
The political environment can alter transaction costs for multinational corporations (MNCs)
Historical relationships between countries can influence trade and investment dominance
MNCs face the challenge of navigating relationships with both host and home governments
MNCs aim to establish a favorable trade and investment climate in host countries
Legal systems, such as common law and civil law, impact MNC operations
MNCs are subject to the laws of both their home and host countries
Legal issues for MNCs include rule of origin laws, competition regulations, and product liability laws
Political risk is the probability of disruption to MNC operations from political forces and events
Examples of political risk include government intervention in a company's operations
Internal and international political risks include corruption, social unrest, and disputes with trading partners
Ownership risk is a type of political risk where the government could change the governance structure or expropriate assets

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Description

Test your knowledge of the complex political and legal environments that multinational corporations (MNCs) navigate with this quiz. Explore topics such as the impact of political relationships, legal systems, political and ownership risks, and the challenges MNCs face in establishing favorable trade and investment climates.