PART NATIONAL BUSINESS ENVIRONMENT

4 Cross-Cultural Business
5 Politics, Law and Business Ethics
6 Economic Systems and Development

5 Politics, Law and Business Ethics

5

5.1 Political System

5.2 Political Risk
5.3 Legal Systems
5.4 Global Legal and Ethical Issues
5.5 Managerial Issues of Legal Problems
5.6 Business and International Relations

5.1 Political Systems

5.1
political system

5.1.1 Politics and Culture

5.1.1

representative

5.1.2 Political Participation

5.1.2

participation

Political Participation


wide participation

narrow participation

90%
35%
35%
2004 54.5%
172 139

5.1.3 Political Ideologies

5.1.3

continuum

1 anarchism

2 totalitarianism

3 pluralism

a
b
c

Political System
anarchism
constitutional
monarchies

pluralism

pure
democracy
democracy
representative
democracy
aristocracies

totalitarianism

theocratic
totalitarianism
secular
totalitarianism

tribal
totalitarianism
right-wing
totalitarianism

5.1.4 Types of Political Systems

5.1.4

1 Democracy

participative democracy
property rights
free markets

 1 pure democracy

a
b
c

 2
representative democracy

a
b
c

d
e

50
71 2001

private sector

2 Totalitarian System

 1
Theocratic totalitarianism
Theocracy

 2
secular totalitarianism

a
Tribal totalitarianism


1.

2.
1/6 4/5
3.
GDP 105%
4.

b
right-wing totalitarianism

80

3
Political Systems in Times of Change

5.2 Political Risk

5.2
political risk

5.2.1 Types of Political Risk

5.2.1

1
2

Types of Political Risk

conflict and violence

terrorism and kidnapping

confiscation

property seizure

expropriation

policy changes

nationalization

local content
requirements

macro risk
micro risk

1
1 macro risk

2 micro risk

2
1
2
3
4
5

 1 conflict and violence

a
b
c

 2
terrorism and kidnapping

3000

$12.5


1.

2.

3.

4.

5.

6.

 3 property seizure

a confiscation
b expropriation
c nationalization

a confiscation

b expropriation

c nationalization

 4 policy changes

 5
local content requirements

a
b
c

5.2.2 Managing Political Risk

5.2.2

Managing Political Risk

local equity / debt
localization
adaptation

development assistance
partnerships
insurance

information
gathering

employees

Influence
local politics

lobbying

agencies

corruption

1 adaptation

1
2
3
4
5

2 information gathering

3
influence local politics
Present firms views on political matters

 1 lobbying

 2 corruption

1977 Foreign
Corrupt Practices Act

144

151

152

152

152

155

155

155

158

10

158

OPEC

5.3 Legal Systems

5.3
legal systems

e-government :

nationalism

5.3.1 Types of Legal Systems

5.3.1

1 Common Law
2 Civil Law
3 Theocratic Law

1 Common Law
11

1
2
3

2 Civil Law
5

3 Theocratic Law

1 Islamic Law

1.

2.

3.

5.3.2
1

20

Contingency Fee

5.4 Global Legal and Ethical Issues

5.4

2
American Law Institute

1987

a
b

2000

1930
1964
1966
1978
1980
1988 1 1

2 Global Legal Issues

2

5.4.1 Standardization of Laws

5.4.1

standardization of laws

5.4.2 Intellectual Property

5.4.2
intellectual property

property rights

intellectual property laws

30%

80%


1 industrial property
1 patent
2 know-how
3 trademark
2 Copyright

Intellectual Property
patent
industrial
property
intellectual
property

know-how

trademark
copyright

1
industrial property

 1
patent

1995 6 8

WTO
20

 2
trademark

2 Copyright

1978 1 1
50
75
100

5.4.3 Product Safety and Liability

5.4.3

product liability

defective product

a
Privity of Contract Standard
1842

b
1916

burden of proof

c
Strict Liability
1944
product defect

d
Absolute of Total Liability

5.4.4 Taxation
5.4.4

value added tax, VAT

5.4.5 Antitrust Antimonopoly Laws

5.4.5

1
1

19 70

1890
1914 Clayton Act
1914

per se illegal

 rule of reason

1970

performance

threat of entry


1911 1976

intra-brand vs. interbrand

1977

Fair Trade
Commission
4

2
1

90%

 2
extraterritorial effect

70
80

5.4.6

1 Foreign Branch
a

b
c

 Treaties of
Friendship Commerce and Navigation

personnel of their choice

race and
national origin

 2 Subsidiary
a
b

51%

40%
30%

 1
a agent
principal

b independent agent
independent contractor

consultant

evergreen contract

5.4.7

1
employment at will
2
a

2
1
a
two-tiered board structure
supervisory board

management executive
committee

2000
2/3

1952 Works
Constitution Act of 1952 5

1/3

1994
Volvo

 1964 Civil Rights

Act of 1964

5.4.8 Ethics and Social Responsibility

5.4.8

1 Ethical Behavior


Anronitis

1997 2001 11 8

2000.8 90
2001.11.8 1.01
2006

2002 -
Sarbanes-Oxley Act

2 Social Responsibility

5.5 Managerial Issues of Legal Problems

5.5
5.5.1

 Marc Galanter

a
b

 2
a repeat users

b one-shotters

5.5.2
1
a

5.5.3
1

principal-agent conflict


concensus oriented appropriate result
maximum benefits
maximum net
benefits

 1
discovery

 1
professional
]

3C
Cost
Competence
Chemistry

 2
a

 3
professional

5.6 Business and International Relations

5.6

5.6.1 The United Nations

2 Main Bodies
1 General Assembly

 2 Security Council
15
5

10

 3
Economic and Social Council

United Nations
Conference on Trade and Development,
UNCTAD

 4 Trusteeship Council
5

 5
International Court of Justice
15

 6 Secretariat

5.6.2 Multilateral Agreements

multilateral agreements