IBUS 330: Chp 2: Political Differences in Political, Economic & Legal System
What two broad issues for international business can be identified when considering the political, economic, and legal environments of a country?
- These systems clearly influence the attractiveness of a country as a market or investment site. - These systems raise important ethical issues that have implications for international business.
What are the three broad types of economic systems?
- mixed economy - command economy - market economy
If all other things are equal, what three environments would make a country more attractive as a place to do business in?
- strong protection of property rights - democratic political institutions - market-based economic system
The communist version of socialism reached its peak in the _____ and by the _______ it was in a state of collapse.
1970s; 1990s
If you were asked to provide a fact about a common law system, what should you say?
A common law system has a degree of flexibility that other legal systems lack.
What condition must be present to create an ideal representative democracy?
A nonpolitical state bureaucracy
What is the objective of a pure command economy?
Allotment of resources for the overall good of society
Jarek has been asked to give a characteristic of a command economy to the class. What should he say?
Command economies do not make innovation a priority and, therefore, tend to stagnate.
What is one way high levels of corruption affect a country?
It reduces the return on investment of a business.
What statement BEST defines right-wing totalitarianism?
It restricts political freedom, frequently on the grounds that it would lead to the rise of communism, but does allow some economic freedom.
Which one of these individuals should apply for a copyright?
Jude, a musician who is composing his maiden album
The members of the World Intellectual Property Organization have signed international treaties designed to protect intellectual property, including the oldest such treaty known as the __________ which dates to 1883.
Paris Convention for the Protection of Industrial Property
What is a difference between the contracts drafted in a common law framework and those in a civil law system?
Resolving contract disputes in a common law system tends to be more adversarial than in civil law systems.
What is an example of facilitating payment under U.S. law and the Organization for Economic Cooperation and Development (OECD) convention?
Small payments that are made for the purpose of speeding up the issuance of a permit.
Carrie's professor asked her to describe democracy. Which of these statements should she use?
The pure form of democracy believes that laws and policies should be made directly by citizens.
The concept of individualism had significant influence on the American colonies as they fought for independence from Great Britain
True
True or false: Patents provide a reassurance for companies and encourage them to pursue extensive research projects.
True
Which statement accurately describes a civil law system?
Unlike a common law system, a civil law system relies on detailed codes, and therefore, can be less adversarial.
Samuel wrote a screenplay and he is traveling to Los Angeles next week to pitch his idea to a movie studio. The screenplay is an example of ___________ property.
intellectual
The __________ system of a country refers to the rules, or laws, that regulate behavior along with the system that enforces them.
legal
Antitrust laws are put into place in a market economy in order to
limit monopolies.
In a pure ________ economy, all productive activities are owned privately - they are not owned by the state.
market
During the economic downturn of 2008-2009, the U.S. government "bailed out" AIG to prevent that financial institution from collapsing because it felt that if AIG collapsed, it would lead to serious consequences for the entire U.S, financial system. By helping out this troubled firm because it appeared vital to national interests, the U.S. government was acting as a __________ economy
mixed
In a _______ economy, both private enterprise and some state monopolies co-exist
mixed
Islamic law, a form of theocratic law, is mostly concerned with
moral behavior.
Under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, the intellectual property regulations established by the World Trade Organization
oblige members to grant and enforce patents lasting at least 20 years.
A _________ grants an inventor exclusive rights for a defined period to the manufacture, use, or sale of his or her invention
patent
Natalia, a research associate at a biotechnology firm, develops a diagnostic kit for the rapid detection of malaria. In order to prevent competitors from duplicating her invention, Natalia should apply for a
patent.
Lax enforcement of intellectual property rights in the computer software industry has lead to stealing of software applications. This lllegal process is also known as
piracy.
In a common law system, ________ refers to cases that have come before the courts in the past.
precedent
Organized crime, such as the "Russian Mafia" that existed following the collapse of communism in Russia and extorted money from businesses is an example of __________ action.
private
Property rights violation that occurs through theft or piracy is an example of _________ action.
private
Corner Coffee Inc. makes coffee pots. Last year, thirty people received serious burns when water leaked down the side of the carafe of a Corner Coffeemaker while the coffee was brewing. Even though Corner Coffee pulled this coffee pot from production, all thirty people who were injured have filed a criminal case against the company. These customers can hold the company responsible based on __________ law.
product liability
Hanson Manufacturing holds legal title to the land, buildings, and equipment associated with the business. These holdings represent the company's ___________
property
Shondra's company developed a new method for sealing medication bottles and has decided to license their patented method to the leading drug manufacturers in the United States. Shondra's company has the legal right to do this based on the _____________ rights they have for this method.
property
Shondra's company developed a new method for sealing medication bottles and has decided to license their patented method to the leading drug manufacturers in the United States. Shondra's company has the legal right to do this based on the ______________ rights they have for this method.
property
The legal rights regarding the use of a resource by a business or individual are known as ________ rights
property
Under a(n) __________, authoritarian elements are used to attempt to deny basic political and civil liberties to individuals.
pseudo-democracy
Under the government of Vladimir Putin in Russia, elections are held for political office while there are also systems in place that limit the civil liberties of opposition groups. What type of government does this represent?
pseudo-democracy
Governments that levy excessive taxes or require expensive permits from property holders are both examples of __________ action to violate property rights.
public
Governments that levy excessive taxes or require expensive permits from property holders are both examples of ___________ action to violate property rights.
public
High levels of corruption tend to affect a nation by
reducing foreign direct investment.
A country that is ruled based on theocratic totalitarianism is governed based on
religious principles.
In a theocratic law system, the law is based on
religious teachings.
In a(n)_______ democracy, elected officials represent the citizens and make decisions on behalf of the electorate.
representative
Collectivism refers to a political system that
restricts an individual's right to do something on the grounds that it runs counter to the "good of society."
The CISG establishes rules that govern contracts specifically between
sellers and buyers who have companies in different nations.
Under the TRIPS agreement, the very poorest of countries have _____________ to comply to the rules of the agreement.
ten years
Compared to contracts drafted in a common law system, contracts in a civil law system
tend to be much shorter and less specific.
The Foreign Corrupt Practices Act was established in the 1970s following the revelation that companies in __________had bribed government officials in foreign countries as an attempt to win lucrative contracts.
the United States
Public action to violate property rights exists when ___________ is responsible for the action.
the government
What does individualism emphasize?
the importance of guaranteeing one's freedom and self-expression
In a pure market economy, production of goods is determined by
the interaction of supply and demand.
Under a common law system, custom refers to
the ways in which laws are applied in specific situations.
The three main types of legal systems found around the world include common law, civil law, and ___________ law.
theocratic
When considering how intellectual property rights are viewed around the world, it can be said that
they are subjected to various forms of protection from country to country.
On the democracy and totalitarianism continuum _________ represents the form of government in which one political party experts absolute control over all spheres of human life.
totalitarianism
A(n) _________ is a recognizable sign, design or name, often officially registered, that identifies products or services from a particular source.
trademark
To guarantee that elected representatives can be held accountable for their actions by the electorate, an ideal representative democracy has a number of safeguards. What is one of those safeguards?
universal adult suffrage
One way to describe collectivism is to say that it
belleves that welfare of the society is best served by a governing body dictating what is in the society's best interest.
Grease payments are considered an acceptable form of a
bribe
A ____________ law system is based on a detailed set of laws organized into codes.
civil
The Cold War is an example of how _____, adhered to by the former Soviet Union and __________, adhered to by the United States created conflict.
collectivism; individualism
A government plans the quantity of goods and services produced as well as the prices at which they are sold in a pure ________ economy
command
In a ___________ economy, dynamism and innovation are absent because private ownership does not exist and there is no incentive for individuals to look for a better way to serve customers.
command
A country that bases its laws on the traditions within the country's legal history operates under a __________ law legal system.
common
Based on the political party beliefs of the governments of China and North Korea, these countries practice _____ totalitarianism
communist
A(n) ____________ is a document that specifies the conditions under which an exchange is to occur, detailing the rights and obligations of the involved parties.
contract
The body of law that governs oral and written agreements associated with the exchange of goods, services, money, and property is known as _____ law
contract
A _________ refers to a legal right that enables the creator of an original work the right to publish and distribute their work as they see fr
copyright
The Greek philosopher Aristotle argued in favor of individualism by noting that
diversity and private ownership are beneficial to society.
In a market economy, the government's role is to
encourage free and fair competition and minimize restrictive business practices.
The purpose of a(n) _______ payment is to facilitate the performance of duties that a government has already obligated itself to do.
grease
The purpose of a(n) ________ payment is to facilitate the performance of duties that a government has already obligated itself to do.
grease
Compared to the United States, the piracy of computer software is _______ in China
higher
When product safety laws are more stringent in a firm's home country than in a foreign country the firm is entering, the most ethical thing to do is to follow __________ standards.
home-country
Select the correct statement about democracy and totalitarianism.
It is possible to have a democratic state in which some degree of collectivism exists.
________ refers to a political system in which the citizens exercise power directly or elect representatives to form a governing body.
Democracy
History shows that state ownership of the means of production never ran counter to the public interest
Fals
True or False: Unlike the economic system of a country, the legal system is NOT influenced by the prevailing poltical system
False
True or false: To date, all major trading nations have accepted the United Nations Convention on Contracts for the International Sale of Goods.
False
Which law makes it illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority?
Foreign Corrupt Practices Act
According to many business executives, what makes American businesses less competitive in the global marketplace?
High costs of liability insurance in the United States
What is an accurate description of intellectual property laws?
Intellectual property laws reward creativity and provide an incentive for people to search for novel ways of doing things.
What statement BEST describes a totalitarian system?
It is a form of government in which the state recognizes no limits to its authority and strives to regulate all aspects of public and private life.
Kent needs to describe theocratic totalitarianism to his classmates. Which of these statements should he use?
It is a political system in which rulers govern based on religious rules and principles
