Podcast
Questions and Answers
What is the primary function of the International Court of Justice?
What is the primary function of the International Court of Justice?
What is Sharia in the context of Islamic law?
What is Sharia in the context of Islamic law?
Which entity primarily handles legal disputes between a company and a government?
Which entity primarily handles legal disputes between a company and a government?
What does the Corruption Perceptions Index measure?
What does the Corruption Perceptions Index measure?
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What is one method for resolving disputes between two companies?
What is one method for resolving disputes between two companies?
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Which of the following refers to practices that are forbidden in Islamic law?
Which of the following refers to practices that are forbidden in Islamic law?
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What risk do businesses face until Internet law is fully drafted?
What risk do businesses face until Internet law is fully drafted?
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Which of the following best describes piracy?
Which of the following best describes piracy?
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Which country has the highest known piracy rate for software?
Which country has the highest known piracy rate for software?
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What is associative counterfeiting?
What is associative counterfeiting?
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What is the ideal political climate for a multinational firm?
What is the ideal political climate for a multinational firm?
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Which of the following factors can lead to political instability?
Which of the following factors can lead to political instability?
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Which form of government is characterized by rule by a single individual?
Which form of government is characterized by rule by a single individual?
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How can companies lessen their political vulnerability?
How can companies lessen their political vulnerability?
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What is a characteristic of companies that are considered less vulnerable to political risks?
What is a characteristic of companies that are considered less vulnerable to political risks?
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Which legal system is NOT one of the four heritages of today's legal systems?
Which legal system is NOT one of the four heritages of today's legal systems?
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What may increase a company's likelihood of facing unpredictable government restrictions?
What may increase a company's likelihood of facing unpredictable government restrictions?
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Why is it important for multinational corporations to comply with foreign business transaction laws?
Why is it important for multinational corporations to comply with foreign business transaction laws?
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Study Notes
Political Climate
- A stable and friendly government is ideal for multinational companies
- Instability can be caused by wars, political shifts during elections, and trade disputes
Forms of Government
- Monarchy - rule by one
- Aristocracy/oligarchy - rule by few
- Democracy - rule by many
- It's important for international companies to know the philosophies of the major political parties to understand their potential impact on trade
Assessing Political Vulnerability
- Some companies are more vulnerable than others to political attention and unpredictable government restrictions
- Vulnerable companies may face restrictions, while less vulnerable companies in high-priority industries for the host country may be exempt from taxes, duties, quotas, and controls
Lessening Political Vulnerability
- Expand the investment base, licensing, and franchising can reduce political vulnerability
- Boycott campaigns can affect a company's operations
Legal Environment
- There is no uniform international commercial law
- Companies must comply with the laws of every country they operate in
Bases for Legal Systems
- Common law
- Civil or code law
- Islamic law
- Commercial legal system
- The interpretation of legal systems varies by country, as does the importance of law
- The number of lawyers per capita can indicate the importance of legal matters
International Law
- The rules and principles considered binding among nation-states
- Disputes between nations are issues of public international law
International Court of Justice
- The judicial arm of the United Nations, founded in 1947
- Settles disputes between nations
- Located in the Hague, Netherlands
- Based on international conventions, international custom, and general principles of law
Islamic Law
- Legal system for many Middle Eastern countries
- Sharia - a code governing Muslim conduct in all areas of life, including business
- Identifies forbidden practices as "haram"
Bribery and Corruption
- Transparency International publishes an annual Corruption Perceptions Index ranking countries based on perceived corruption levels
Jurisdiction in International Disputes
- Legal disputes can happen between governments, a company and a government, or between two companies
- Disputes between governments are handled by the International Court of Justice
- Other disputes may be handled by a court in one of the countries involved or through arbitration
Cyberlaw: Unresolved Issues
- Internet law is vague and global in reach, lacking political or geographic boundaries
- The EU, US, and other countries are drafting legislation
- Businesses might have to rely on host nation's laws until a global framework is established
Infringement of Intellectual Property
- Counterfeiting - unauthorized copying and production of a product
- Associative Counterfeit/Imitation - product name slightly differs from a well-known brand
- Piracy - unauthorized publication or reproduction of copyrighted work
Protecting Intellectual Property
- To protect intellectual property, businesses can:
- Register trademarks
- Secure copyrights
- Apply for patents
- Seek legal action against infringers
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Description
This quiz explores the impact of political climate on multinational companies, focusing on different forms of government and assessing political vulnerability. It also discusses strategies for lessening political vulnerability and navigating the legal environment. Understanding these concepts is crucial for international business operations.
