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30 Cards in this Set
- Front
- Back
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Sovereignty |
The powers exercised by a state in relation to other countries & supreme powers exercised over its own members |
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Political Parties |
Knowledge of the philosophies of all major political parties within a country, since any one of them might become dominant and change the rules |
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Nationalism |
National pride can take an anti-foreign business bias, with harassment & controls f foreign investment being supported |
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Confiscation |
Seizing a company's assets without payment |
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Expropriation |
Requires some reimbursement for the government seized investment |
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Nationalization |
A government takes control of some or all of the enterprises in an entire industry |
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When is Nationalization acceptable in International Law? |
1. Satisfies public purpose (it's very important for the country's survival) 2. Includes compensation |
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Creeping Expropriation |
Limits economic activities of foreign firms |
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What's included in creeping expropriation? |
-Limits on repatriation of profits -Technical assistant fees -Increased local content laws -Quotas for hiring local nationals -Price controls -Discriminatory tariff and notariff barriers -Discriminatory laws on patents and trademarks |
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Political Sanctions |
A country may boycott another nation or may issue sanctions against the trade of specific products |
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Risk of Political and Social Activists |
Can interrupt the normal flow of trade |
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Risk of violence and terrorism |
Multinationals need to consider assessing political vulnerability of their activities |
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How do Joint Ventures reduce political vulnerability? |
Helps minimize anti-foreign feelings, and a joint venture with another firm adds the additional bargaining power of a third country |
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How does expanding the investment base reduce political vulnerability? |
Including several investors and banks in financing an investment in the host country |
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How does Licensing reduce political vulnerability? |
Eliminates almost all risks except appropriation of the company's know-how and/or a refusal to pay the required licensing fees while continuing to use the technology |
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How does Planned Domestication reduce political vulnerability? |
Can be profitable and operationally expedient for the foreign firm |
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How do Political Payoffs reduce political vulnerability? |
By paying those in power to intervene on behalf of the foreign company |
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Why is the legal environment important for Global Marketing? |
1. No single, uniform international commercial lawgoverning foreign business transactions exists2. International marketers must comply with the laws ofeach country within which it operate3. The legal systems of different countries are disparateand complex4. Best to get expert legal advice when doing business inanother country |
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What are the bases for Legal Systems? |
1. Common Law 2. Civil or Code Law 3. Islamic Law |
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Patent |
Gives an inventor exclusive right to make, use, and sell an invention for a specified period of time |
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Trademark |
Distinctive mark, motto, device, or emblem used to distinguish it from competing products |
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Copyright |
Establishes ownership of a written, recorded, performed, or filmed creative work |
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Three Infringements of Intellectual Property |
1. Counterfeiting 2. Associative Counterfeit/Imitation 3. Piracy |
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Counterfeiting |
Unauthorized copying and production of a product |
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Associative Counterfeit/Imitation |
Product name differs slightly from a well-known brand |
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Piracy |
Unauthorized publication or reproduction of copyrighted work |
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3 Forms of Dispute Resolution |
1. Mediation (conciliation) 2. Arbitration 3. Litigation |
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Concilation |
Conciliation is a non-binding agreement between parties to resolve disputes by asking a third party to mediate differences. The mediator carefully listens to each party and explores, clarifies, and discusses the various practical options and possibilities for a solution with the intent that the parties will agree on a solution |
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Arbitration |
- The parties involved select a referee to make a judgement that both parties agree to honour - Most arbitration is conducted under the auspices of one of the more formal arbitration groups - In most countries, decisions are enforceable under law - All have adopted standardized rules and procedures to administer cases |
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Deterrents to Litigation |
- Fear of creating a poor image and damaging public relations - Fear of unfair treatment in a foreign court - Difficulty is collecting a judgement - The relatively high cost and time required to bring legal action - Loss of confidentiality as litigation is public |
