Business and

CLASS 6 Management in A
Global Context
Dr. Howaida M. Barakat
 Room: A-105

2:30 – 4:00 pm 2:30 – 4:00 pm

Oct.: 24, 31 9:00 – 10:30 am
Nov.: 7, 14, 21, 28 Oct.: 25
Nov.: 1, 8, 15, 22, 29
Dec.: 5, 12, 19
Dec.: 6, 13, 20
Jan.: 9, 16, 23, 30 Jan.: 10, 17, 24, 31
Feb.: 6, 13, 20, 27 Feb.: 7, 14, 21, 28
Mar.: 6, 13, 20,27 Mar.: 7, 14, 21, 28
Apr.: 3, 10 Apr.: 4, 11, 18
Oct.: 26
Nov.: 2, 9, 16, 23, 30
Dec.: 7, 14, 21
Jan.: 11, 18, 25
Feb.: 1, 8, 15, 22
Mar.: 1, 8, 15, 22, 29
Apr.: 5, 12, 19, 26

2022 Dr. Howaida M. Barakat 2

 STUDY FOR THE QUIZ
CHAPTERS ONE & TWO
CLASSES 2, 3, 4, 5 & 6
WHEN?
M o nday, O c tobe r 2 4 , 2022

WHERE?
In Class

F O R M AT ?
Pa p er - ba s e d Mu l t i pl e C h o i c e & E s s ay Wr i ti ng

2022 Dr. Howaida M. Barakat 3

Topic one:
Introduction to the global
business environment
2. Political, Economic and Legal
Environments

2022 Dr. Howaida M. Barakat 4

 CLASS 5
Learning Outcomes
2.4, 2.5, 2.6
• Discuss the systemic differences among
economies and the related challenges
for international business
• Describe the basic differences between
legal systems in the world
• Engage in and assess leading debates
on political, economic, and legal
institutions and international business.

2022 Dr. Howaida M. Barakat 5

Legal Systems
What does the term legal systems mean?
The formal rules that regulate behavior, along with the processes by which the laws
of a country are enforced.

Why is it important for multinational enterprises to know the

legal systems of the countries they are operating in?
country’s laws:
✓ Regulate the business practice
✓ Define the way business transactions are to be executed
✓ Set down the rights and obligations of those involved in business transactions

2022 Dr. Howaida M. Barakat 6

Legal Systems

Do legal systems impact the attractiveness of a country as a

business investment or a potential target market?

Do political systems influence the legal system of a country?

Is it about having a legal system or about law enforcement?

2022 Dr. Howaida M. Barakat 7

Legal Systems

What type of economy would a ‘collectivistic totalitarian’ state

have? Would such a type of economy encourage private
enterprises?

What type of economy would ‘individualistic’ states have?

Would such a type of economy encourage private enterprises?

2022 Dr. Howaida M. Barakat 8


Common Law
✓ English in origin
✓ Influenced countries in Africa,
Asia, South Africa, Canada, and
the USA
✓ Based on court decisions and
judges’ interpretation of laws.
Implications for business:
Greater freedom to design contracts.
Contracts fill in for gaps in the legal
framework.
More legal disputes.
May favor the more powerful
companies.
2022
TYPES OF LEGAL SYSTEMS
Civil Law
✓ Practiced in more than 80
countries including
Germany, Japan, and Russia
✓ Judges apply the existing
law, not interpret the law
Implications for business:
Greater certainty.
Short contracts and codes of practice.
More consumer and employee
protection.
Bureaucracy and rigidity
Dr. Howaida M. Barakat
Religious
Theocratic Law
✓ Based on religious
teachings.
✓ Practiced in Iran, Libya,
Saudi Arabia, and Morocco
✓ In some countries practiced
with common or civil laws
✓ Based on the interpretation
of the Islamic scholars
9
Issues for international businesses
Legal systems are important for dealing with essential issues for international businesses:

• Property rights

• Intellectual property rights:

o Patent
o Copyright
o Trademark

• Product safety and liability

• Corporate governance:
o Common law: strong protection for financial investors (i.e. shareholders).
o Civil law: less protection for shareholders and more stakeholders

2022 Dr. Howaida M. Barakat 10

Ways to measure economic development
Gross National Income (GNI)
The total amount of money earned by a nation's people and businesses regardless of whether they
are located in the country or abroad

Purchasing Power Parity (PPP)

Price level differences across countries.

What does this mean for businesses?

Example: India and US multinational enterprise
Indians can consume about 6% of the goods consumed by the average US citizen.
India has an emerging middle class of about 100 million people.
Should US businesses have discounted India as a potential market?

2022 Dr. Howaida M. Barakat 11

Ways to measure economic development

Investing in Human beings:

- Healthcare
- Education
- Freedom

2022 Dr. Howaida M. Barakat 12

Why do some countries succeed in economic development
while others fail?
Peng and Meyer (2019) line up with the argument of North (2005) and see political, economic
and legal institutions as the basic determinants of a country’s national economic performance
✓ Institutions ensure that companies are able to make profits.
✓ Institutions ensure that companies are able to trade on a formal market, avoiding
over-dependence on informal relationships.
✓ Institutions ensure protection from political, legal, and economic risks in
conditions of instability
✓ Institutions support businesses moving into complicated long-distance trade
because they can see reasons for specialization and growing in size, and making
long-term commitments to international trade there.
✓ If property rights are protected, this will fuel innovation, entrepreneurship, more
economic growth, and increased inward investment

2022 Dr. Howaida M. Barakat 13

 Activity
Who is breaking whose copyright?

In your view, were the British behaving legally?

Why do you think legal systems and international agreements have such a
poor record against copyright and IP violations?

How could the IP laws in your own country be strengthened?

2022
Dr. Howaida M. Barakat 14
Week 5
INDIVIDUAL ASSIGNMENT
W R I T E A O N E - PAG E E S SAY O N A N Y TOP I C O F YO U R C HOI C E

WHEN?
D a t e : Tu es day, O c to ber 2 5 , 2 0 2 2
T i m e : 2 3 : 59 pm ( mi dn i g ht )

W H E R E TO S U B M I T ?
M o o dl e

2022 Dr. Howaida M. Barakat 15

 Topic 1: Introduction to the global business environment
Chapter 3: Informal institutions: cultural, social and ethical challenges

3.1 Introduction
Next Class 3.2 Cultures and International business
3.3 Languages

Reading pages: 41 - 46

05/10/2022 Dr. Howaida M. Barakat 16

Thank You
Dr. Howaida M. Barakat
Howaida.barakat@eue.edu.eg

2022 17