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This week we will discuss global politics and it’s affect on business/marketing.
So, what do you think are the primary POSITIVES and NEGATIVES of a democratic/free market system?
Then, what do you think are the primary POSITIVES and NEGATIVES of a more state controlled/socialist system?
Remember, there are at least in theory, pros/cons to BOTH albeit many believe one is far superior in structure to the other. This is about at least acknowledging the theoretical underpinnings of the other system.
Lastly, IF you were a business person located OUTSIDE the United States and considering doing marketing here, what would be your assessment of the political “climate” in the US now for your investors/colleagues to take into consideration.
Then, per chapter 7 (which is located in the attachments) on the legal environment…what are your thoughts about or what do you perceive as the pros/cons of the following legal systems:
COMMON LAW
CODED LAW
RELIGIOUS LAW
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I ALSO NEED A RESPONSE TO THESE TWO POSTS: (the responses needs to be 1 paragraph… 5-6 sentences)
J
acobs post(1)
The Biggest positive of the free-market system is that it promotes more freedoms for innovation and that is is consumer driven. In a free market system, it is up to companies to come up with the best ways to reach the wants/needs of consumers, leading to higher levels of innovation needed to achieve this. One of the major negatives of this system is that revenues/profits tend to be firm’s main focus. This can lead to firms not offering very high wages, sometimes cutting corners on product quality and employee safety, and companies misleading consumers to make a profit (like Enron).
A positive of a more state controlled system is that is results in workers having more power over employers. Generally, in these systems workers have more of a voice when it comes to demanding better wages and more safety. I find there to be more negatives than Positives to this system. One major negative is that these systems tend to require exponentially higher taxes. In order for things like universal healthcare and free education to exist, citizens must pay higher taxes to fund these things. While these things may be advertised as “free” they are just being paid for by the citizens in an indirect way. Another negative is that this type of system can lead to a lack of motivation among the workforces. If citizens are being provided with these “free” services, they may be less driven to work harder because they know they will not be paid more for it. Innovation will also be slowed because there is a lack of incentive for the innovation of new and better products/services.
The biggest thin to take into account when looking at the US political climate is that it is strongly divided. It would be important to take into account that the country is very split politically and there are very few people currently in the “middle” so to speak. Because of this, it would be important to understand that the political power in the country is likely not going to stay consistent, and both sides must be appealed to. Due to this, doing business here could be a high risk because if the political leadership changes, so could trade agreements/barriers, import taxes and many other factors that would affect an outside company doing business in the United States.
The main defining characteristic that I see in common law is that the basis for the laws continuously evolve through amendments to previous legislature. Common Law is more like a living document that can be changed as new relevant information and cultural changes take place. By this, the laws are more so interpreted than being matter of fact. This is important because not every situation is the same, so laws are better interpreted than being matter of fact in some situations.
Civil law seems to be the opposite of this. The laws of a Civil are based on a codified set of laws, not laws created because of past judicial judgements. I think that an issue that can arise from this is that it would take a lot to change these laws, and as the world continues to evolve and change, new or revised laws will be needed to cover topics not thought of when the original precedents were written.
My thoughts on religious law are that due to how many different religions there are, following religious law of one specific religion may be hard to do. Also, I feel that religious laws are too wide open to interpretation in some cases, and taekn too literally in others.
AND
Joshua Post (1)
What do you think are the primary POSITIVES and NEGATIVES of a democratic/free market system?
To my knowledge, a free-market economy promotes the production and sale of goods/services, with little or no control from government. Instead of price controls, a free-market economy allows the relationships between supply and demand. I believe there are positives of this system. For instance, you have the absence of bureaucracy and all the red tape. It reduces admin costs to the business and allows companies to allocate resources into other areas of their business. It also gives businesses the freedom to innovate. They can create new products and offer new services at any time they want. Doing their own research and identifying popular brands leads to competition as every company tries to improve their products. Another positive could be more consumer based. Ultimately, customers make the decision which products succeed or fail based on what they purchase. The Free market system also has its constraints as well. Good examples of market failure include the
Great Depression
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of the 1930s and the real estate market crash that happened in 2008. Market failures can lead to devastating outcomes such as unemployment, homelessness, and lost income. Companies would compromise safety of its workers and disregard other standards, both ethically and environmentally, just to make a better profit.
What do you think are the primary POSITIVES and NEGATIVES of a more state controlled/socialist system?
In socialist economies government, which owns or controls much of the economy?s resources, decides the what, when, and how of production. Supporters of socialism argue that the shared ownership of resources and the impact of central planning allow for more equal distribution of goods and services make for a fairer society. A key positive is that each worker in the community has a say on how resources are managed, and each person receives and contributes based on their own potential. Each person is also guaranteed access to basic goods, even when unable to contribute. As a result, the system helps minimize poverty levels in society. Also, each person has the same right to access health care and other social aspects like education. In contrast, a key negative to this system is its reliance on cooperative pooling to get things done. Being it is more about cooperation and not competitiveness, the competitive type tends to find ways to cause social unrest for personal gain. Other negatives of a socialist system are investors may refrain from investing in socialist countries because they often fail. I just don?t believe they are sustainable in the long run.
IF you were a business person located OUTSIDE the United States and considering doing marketing here, what would be your assessment of the political “climate” in the US now for your investors/colleagues to take into consideration.
My assessment would be that the US is a divided nation on where it stands politically, and people in power often change. I would consider it a vastly changing and growing climate that when stable, businesses can thrive. Considering the leadership isn?t all that likely to remain consistent over the years, you need to cater to both sides of the political parties. This also makes it a bit difficult to know what kind of other factors come into play, such as trades, alliances, taxes, etc. Especially now, being that the US is probably more divided now than it was pre-pandemic, it would be a difficult market to break into.
What are your thoughts about or what do you perceive as the pros/cons of the following legal systems: Common Law, Coded Law, and Religious Law
The advantage of Common Law is that because they are not bound by written rules, which can be both under inclusive and over inclusive, common-law judges can tailor legal principles to suit the instant case at hand. Also, common law can evolve better to adapt to modern society than systems based on written rules because it?s easier and less costly for judges to decide than for legislators pass laws to remedy every situation. The disadvantage of common law is that the laws aren?t all stated clearly and plainly in structured language, like statutes are in civil law countries, meaning you may want to get a licensed attorney. I also think common law gives judges a lot more room to come up with what they think is fair.
Code law is based on an all-inclusive system of written rules of law. An advantage of code law would be that it applies better the principle of legality, meaning the average person can be fully aware of the consequences of his/her actions by referring to written law. Countries with coded law systems have comprehensive, continuously updated legal codes that specify all kinds of matters that can be brought before a court, as well as the procedure to follow and the appropriate punishment for each offense. The disadvantage of such a system is that it remains static. A judge can never interfere in the domain of law by giving wide interpretations. He can only apply written law with a narrow margin of appreciation, which can lead to many injustices.
There are dozens of religions that exist in our world today. Each of them has a set of rules that govern how we should behave. For example, an important set of rules that Catholics and other Christian religions follow include the Ten Commandments. Religious laws essentially tell us what to believe and how to behave. My thoughts are that following religious law would be extremely hard to do considering how many religions are out there. Everything is too speculative for it to be considered a law in my opinion.
Chapter 7
The International Legal
Environment: Playing By the Rules
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Learning Objectives 1 of 2
7-1 The four heritages of today?s legal systems
7-2 The important factors in the jurisdiction of legal
disputes
7-3 The various methods of dispute resolution
7-4 The unique problems of protecting intellectual
property rights internationally
7-5 How to protect against piracy and counterfeiting
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Learning Objectives 2 of 2
7-6 The many issues of evolving cyberlaw
7-7 The legal differences between countries and how
those differences can affect international
marketing plans
7-8 The different ways U.S. laws can be applied to U.S.
companies operating outside the United States
7-9 The steps necessary to move goods across country
borders
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Introduction
Foreign Business Transaction Law
? No uniform international commercial law exists
? Legal systems in different countries are both disparate and
complex
? Important to comply with the laws in each country in
which the multinational corporation operates
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Bases for Legal Systems 1 of 6
Four heritages of today?s legal systems
1. Common law
2. Civil or code law
3. Islamic law
4. Commercial legal system
Interpretation of system varies by country
Importance of law also varies
? Number of attorneys per capita
?McGraw-Hill Education
Exhibit 7.1 Lawyers per 100,000 People in
Selected Countries
Sources: Randy Peerenboom, ?Economic Development and the Development of the Legal Profession in China,? presentation at Oxford University, 2006; Council of Bars
and Law Societies of Europe, http://www.ccbe.edu, 2010; http://www.oab.org.br, 2010; http://www.abanet.org, 2010; Bruce E. Aronson, ?The Brave New World of Lawyers in
Japan,? Pacific Rim Law & Policy Journal 21, no. 2 (March 2012), pp. 255?75.; Mitsuro Obe, “Japanese Lawyers’ Problem: Too Few Cases, The Wall Street Journal,
April 3, 2016, online.
Jump to long description.
?McGraw-Hill Education
Bases for Legal Systems 2 of 6
Common Law
? Derived from English law
? Found in England, U.S., Canada, and other countries once under
English control
? Based on tradition, practices, precedents
? Set by past courts? interpretations of statutes, legal legislation, and
rulings
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Bases for Legal Systems 3 of 6
Code Law
? Derived from Roman law
? Found in Germany, Japan, France
? Non-Islamic and non-Marxist countries
? Based on all-inclusive system of written rules of law
? 3 main codes: commercial, civil, and criminal
? All laws are codified, but broad interpretations are possible
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Bases for Legal Systems 4 of 6
Common Law
Code Law
? Based on tradition
? Based on system of written rules
? Not all-inclusive
? Catchall provisions with broad
interpretations possible
? Ownership of intellectual
property based on use
? Agreements binding as long as
proof of agreement is established
? Acts of God interpreted as
unforeseeable occurrences of
nature
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? Ownership of intellectual
property based on registration
? Agreements not enforceable
unless properly notarized or
registered
? Acts of God interpreted as
unforeseeable occurrences of
nature and human acts
Bases for Legal Systems 5 of 6
Islamic Law or Shari?ah
? Based on interpretation of the Koran
? Prescribes specific patterns of social and economic
behavior for all people
? Property rights, economic decision making, economic freedom
? Overriding objective is social justice and equality
? Emphasizes ethical, moral, social and religious dimensions
? Prohibits investment in activities that violate Shari?ah
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?Ali Haider/EPA/REX/Shutterstock
Islamic Law and Banking
Banking in Dubai, UAE, requires an understanding of Islamic law and customs.
Prohibition against the payment of interest and prohibition against
investments in businesses dealing with alcohol and gambling are two of the
tenets of Islamic law that affect banking.
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Bases for Legal Systems 6 of 6
Marxist-Socialist Tenets
? Pattern for development of economy differs by country
? Found in Russia, Eastern Europe, China, and other socialist states
? Law is subordinate to prevailing economic conditions
? Development of commercial legal system necessary
? Socialist countries trading with non-Marxist countries
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Jurisdiction in International Disputes 1 of 2
Legal disputes can arise in three situations
1. Between governments
2. Between a company and government
3. Between two companies
Situation 1: Resolved by The World Court at the Hague
Situations 2 and 3: Handled by a court in one of the
countries involved or through arbitration
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Jurisdiction in International Disputes 2 of 2
Which Law Governs?
? Jurisdiction generally determined by:
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1.
Jurisdictional clauses included in contracts
2.
Where a contract was entered into
3.
Where the provisions of the contract were performed
International Dispute Resolution 1 of 3
Conciliation
? Resolve dispute by asking third party to mediate
? Discussion during mediation is confidential
? May not be used in future litigation or arbitration
? Not legally binding
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International Dispute Resolution 2 of 3
Arbitration
? Disinterested and informed party chosen as referee
? Determine the merits of the case
? Make judgment both parties in conflict can honor
? Many arbitral centers each with standardized procedures
? Arbitration clauses require agreement on two counts
? Parties agree to rules and procedures of some arbitration tribunal
? Parties agree to abide by the awards resulting from the arbitration
? Legally binding in most countries
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International Dispute Resolution 3 of 3
Litigation
? Commonly initiated by a lawsuit; held in formal court
? Most try to avoid litigation
? Fear of creating poor image and damaging public relations
? Fear of unfair treatment in foreign court
? Difficulty in collecting judgment that may otherwise have been in a
mutually agreed settlement through arbitration
? Expensive and requires a lot of time
? Loss of confidentiality
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Protection of Intellectual Property Rights:
A Special Problem 1 of 6
Intellectual Property
? Global brand names and trademarks
? Used to symbolize quality of product or company
? Entices consumers to buy good or service
? Important to protect
? Among most valuable assets to a company
? Companies spend millions of dollars on establishing property
rights
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Protection of Intellectual Property Rights:
A Special Problem 2 of 6
Counterfeiting and Piracy
? Occurs in a range of industries
? Costs companies billions of dollars in lost revenue
? Counterfeit pharmaceuticals most dire; can cause death
? Collusion between manufacturer and illegitimate sellers
? Makes counterfeiting more possible
? Some feel the intellectual property regime has gone too
far in favor of firms; hinders creativity
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Exhibit 7.2 Piracy Rates for Computer Software,
Top and Bottom Ten
Highest Rates
Country
Lowest Rates
Rate %
Country
Rate %
Libya
90
United States
17
Zimbabwe
90
Japan
18
Venezuela
88
New Zealand
18
Yemen
87
Luxembourg
19
Armenia
86
Australia
20
Bangladesh
86
Austria
21
Moldova
86
Sweden
21
Iraq
85
Denmark
22
Azerbaijan
84
Germany
22
Belarus
84
United Kingdom
22
Source: From 2016 BSA and IDC Global Software Piracy Study (Washington, DC: Business Software Alliance); Seventh Annual BSA/IDC Global Software Piracy
Study (Washington, DC: Business Software Alliance), www.bsa.org/globalstudy
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Protection of Intellectual Property Rights:
A Special Problem 3 of 6
Inadequate Protection
? Leads to loss of legal rights in profitable markets
? Patents, processes, trademarks, and copyrights
? Valuable in all countries
? Lack of adequate protection against foreign exploitation
? Many cases of companies losing rights to own trademark and
having to buy them back
? Patent infringement is commonly used by competitors with no
intent to compensate for use
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Protection of Intellectual Property Rights:
A Special Problem 4 of 6
Prior Use versus Registration
? Common law: ownership established by prior use
? First to use is typically considered the rightful owner
? Code law: ownership established by registration
? First to register is typically considered rightful owner
? Use of the property does not matter
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Protection of Intellectual Property Rights:
A Special Problem 5 of 6
International Conventions
? Designed for mutual recognition and protection of IP rights
? Three main conventions
? The Paris Convention for the Protection of Industrial Property
? The Inter-American Convention
? The Madrid Arrangement
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Protection of Intellectual Property Rights:
A Special Problem 6 of 6
Other Managerial Approaches
? Traditional, but feeble, remedies
? Prevention, engage local representation and diligently register
intellectual property with appropriate agencies
? Pursue negation and alternative dispute resolution
? Complain to authorities of host nation
? Complain to domestic government and World Trade Organization
(WTO)
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Cyberlaw: Unresolved Issues 1 of 4
Internet law is too vague
? Does not address uniqueness of Internet
? Global in reach, no political or geographic boundaries
? European Union, U.S., and other countries drafting
legislation
? Will cover the myriad legal questions not addressed by current law
? Until complete, businesses at risk
? Might have to rely on host nation?s laws
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Cyberlaw: Unresolved Issues 2 of 4
Domain Names and Cybersquatters
? Buy and register website names
? Using descriptive nouns, celebrity names, variations on company
trademarks
? Keep domain name to sell later at inflated price
? Hope owner of trademark or name will pay huge dollar amounts to
acquire the URL
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? Ng Han Guan/AP Images
Microsoft and Censorship in China
Potential customers visit a Microsoft booth in Beijing. When Chinese bloggers use
Microsoft?s service to post messages and type in such terms as ?democracy,?
?capitalism,? ?liberty,? or ?human rights,? they get a yellow light and a computer
warning: ?This message includes forbidden language. Please delete the prohibited
expression.? Microsoft has agreed to this sort of censorship, explaining that it is just
following local laws and that the company still provides a most useful service to its
Chinese clients.
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Cyberlaw: Unresolved Issues 3 of 4
Taxes
? Traditional system taxes economic activity where it occurs
? People can work from anywhere using the Internet
? When and where should these taxes be collected?
? Who should collect the taxes?
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Cyberlaw: Unresolved Issues 4 of 4
Jurisdiction of Disputes and Validity of Contracts
? Body of cyberlaw gradually being created
? For now, there are two main troubling areas
? Determining whose laws will prevail in legal disputes between
parties located in different countries
? Establishing contractual validity of electronic communications
? Many countries working to address issues
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Commercial Law within Countries 1 of 3
Marketing Laws
? Countries have unique laws in marketing
? Promotion, development, labeling, pricing, sales, distribution
? Laws vary in strictness by country and industry
? Discrepancies create challenges for marketers and traders
? Hope of common commercial code across countries
? European Union attempting to standardize law
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? Pat Roque/AP Images
Sale of Human Organs
In the Philippines and other developing countries, you can buy yourself a
kidney on the black market?the global price is around $2,000. However, U.S.
laws prohibit the buying and selling of human organs.
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Commercial Law within Countries 2 of 3
Green Marketing Legislation
? Environmental protection of global concern
? Extends beyond just pollution and hazardous waste
? Focuses directly on environmental-friendliness of products
? Germany has most stringent laws
? Regulate management and recycling of packaging waste
? ?Ecolabel? in Europe for products that comply with criteria
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Commercial Law within Countries 3 of 3
Foreign Countries? Antitrust Laws
? U.S. main enforcer in most of 20th century
? Now used as model for other countries
? European community, Japan, and others
? Focuses on issues to ensure fair commerce
? Antimonopoly, price discrimination, supply restrictions, full-line
forcing are highly penalized
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U.S. Laws Apply in Host Countries 1 of 5
Home-Country Laws
? Protect country?s political and economic interests
? U.S. law holds true in foreign jurisdictions
? For the firm, its subsidiaries, and licensees of U.S. technology
? Paying bribes, trading with the enemy, commercial ventures that
harm U.S., and unauthorized boycotts are punishable
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U.S. Laws Apply in Host Countries 2 of 5
Foreign Corrupt Practices Act (FCPA)
? Illegal for companies to pay bribes to foreign officials,
candidates, or political parties
? Stiff penalties for participating in bribery
? Bribery common business practice in many countries
? Still, U.S. strictly adheres to FCPA
? Some argue this disadvantages U.S. companies in ?corrupt?
markets
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U.S. Laws Apply in Host Countries 3 of 5
U.S. Antitrust Laws that Apply in Foreign Markets
? Two main purposes in international commerce
1. Protect American consumers by ensuring they benefit from
products and ideas produced by foreign and domestic
competitors
2. Protect American export and investment opportunities against
any privately imposed restrictions
? Defense of U.S. commerce against threatening foreign
behavior of chief concern
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U.S. Laws Apply in Host Countries 4 of 5
Antiboycott Law
? U.S. companies can?t participate in unauthorized boycott
? Need to report any request to cooperate with a boycott
? Response to Arab League boycott of Israeli businesses
? Creates challenging situation for U.S. companies
? Blacklisted by Arab League if they trade with Israel
? Punished by U.S. if they participate in boycott
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U.S. Laws Apply in Host Countries 5 of 5
Extraterritoriality of U.S. Laws
? Causes anxiety for foreign heads of states
? U.S. laws can interfere with economic or political goals
? Multinational corporations (MNCs) are held liable for
activities that violate human rights
? Like doing business with oppressive regimes
? Lawsuits brought to U.S. courts by foreign countries
? U.S. wants more firms to become multinational
? Needs to make more provisions for resolution of conflict
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Export Restrictions 1 of 4
U.S. Policy on Exports
? Businesses can export without a formal license
? Exports may need a license in certain situations
? Commodities and U.S. technical data, re-exports to other foreign
destinations, U.S-origin parts used to build foreign products
? Controlled by U.S. Bureau of Industry and Security (BIS)
? Exports from U.S. increased drastically over last decade
? Export Administration Regulations (EAR) published
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Export Restrictions 2 of 4
National Security Laws
? Sale of products cannot affect U.S. national security
? Applies to American firms, their foreign subsidiaries, and foreign
licensees of U.S. technology
? Responsibility extends to the final destination of the product
? Restrictions on weapons of mass destruction (WMD) post-9/11
? U.S. controls exports for a host of reasons
? Protect and promote human rights, enforce foreign policy, address
any national shortages
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Export Restrictions 3 of 4
Determining Export Requirements
? Exporter responsible for making determination
? If item can be exported, must choose appropriate license
? Depends on the product, where it is going, and its use
? General license
? Not subject to EAR control; lists product, value, and its destination
? Validated license
? Obtained only through a formal application
? Authorizes exportation with specific limitations of Export
Administration Regulations (EAR)
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?yuyangc /Shutterstock
Dual-Use of Technology Exports
China successfully test-fired a new type of long-range ground-to-ground missile within its
territory as tensions between China and Taiwan continue to rise and wane. Additionally,
China and the United States have both shot down their own ?errant? satellites with missiles.
Much of the electronic technology used in long-range missiles is dual-use; that is, the
technology can be used for both nonmilitary and military applications. It is the exporter?s
responsibility to ensure that the final user of restricted dual-use products complies with
export restrictions.
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Export Restrictions 4 of 4
Acquiring Export Licenses
? Four electronic services facilitate paperwork and expedite
process
1. ELAIN
2. STELA
3. ERIC
4. SNAP
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Appendix of Image Long Descriptions
?McGraw-Hill Education
Appendix 1 Exhibit 7.1 Lawyers per 100,000 People in
Selected Countries
China: 10
Japan: 20
South Korea: 25
Sweden: 50
Czech Republic: 70
France: 70
Turkey: 75
Netherlands: 80
Hungary: 100
Switzerland: 110
Germany: 175
United Kingdom: 260
Brazil: 310
Spain: 350
Italy: 360
United States: 375
Numbers are approximate.
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