BA310 Ch. 6

Private Corruption

Business corruption involving other private businesses, individuals, or groups. - I.e Businesses bribing businesses - Businesses dealing with the Mafia

Capitalism

Businesses are privately owned, strong individual incentives exist, and the government plays very little role in the economy

Foreign Corrupt Practices Act (FCPA)

FCPA Became law in the US in 1977 Prohibits U.S companies from bribing government / government officials.

Theocratic Law - (3. Legal System)

Based on a religious document and religious teachings - I.e Islamic Law & the Koran

Arbitration

(Arb-ately) Dispute handled privately - Where disputing parties designate a neutral private person or group of persons to hear and decide the case.

Caveat Emptor

(Empt-By) like 'Empty' "Buyer Beware" Places the burden of determining product safety on consumers. - Where product safety laws are more lax I.e tobacco in Pakistan, the gov doesn't interfere.

Litigation

(Pub-liture) Dispute handled publicily Handled in a government court of law

Caveat Venditor

(VenSell) like a Vessel "Seller Beware" On manufacturers or sellers the burden of making sure their products are safe. - Warning customers about the potential safety risks of their products. - I.e Dead babies on packs of cigs

Types of Laws

1. Criminal Law 2. Contract Law 3. Tax Law 4. Antitrust Laws 5. Product Safety Law 6. Dispute Settlement Law

Terrorism Risk Insurance Act of 2002

A U.S. law that after a certain deductible provides U.S. businesses government insurance coverage for the risk of terrorism. - Signed after September 11th

Civil Law - (1. Legal System)

A comprehensive listing of legal rules in sets of written codes of law. (Sets of laws/rules)

Trademark

A distinctive phrase, name, word, picture, symbol, or design, or a combination - Identifies a given business's service or product and is owned by said business. - I.e Nike 'Swoosh' or McD golden arches (The title to your formula)

Macro-Political Risk

A political risk that essentially affects ALL businesses in a given country. I.e A sudden political regime

Micro-Political Risk

A political risk that only affects a certain industry or set of firms in a given country. I.e A countries oil problem

Athenian Democracy

A pure form of democracy All adult citizens vote directly on matters affecting the community

Genericized Trademark

A trademark that has become so well known it describes the whole market class - I.e Asprin, Escalator, Zipper Companies: Post-It, Pull-ups

Tax Law

Dealing with governmental levying of taxes on individuals and corporations. - The UK and Switzerland have great tax laws

Antitrust Laws

Designed to promote "fair competition" among businesses. - Promotes companies from engaging in collusion. ('anti-monopoly' laws)

Dispute Settlement Law

How disputes arise in the conduct of business and they are settled. - Can be disputed publicly or privately

Representative Democracy

Form of government in which citizens vote to elect given individuals to serve as their representatives for a certain period of time Need to gather votes Current US Gov form

Contract Law

Governing legally enforceable agreements between parties to engage in economic exchange. - The law that enforces contracts - Need to be familiar with different countries contract laws

Democracy

Greek for "rule by the people" Form of government in which all citizens have the right to vote.

Socialist

In which the government plays a strong role in the economy and may own stakes in certain businesses. Put a high value of labor unions European countries I.e France, Great Britain

Terrorism

Involve unlawful acts of violence threatening the physical safety of others Top 5 most dangerous countries in the world: 1. Somalia 2. Afghanistan 3. Iraq 4. Syria 5. Yemen

Common Law - (2. Legal System)

Legislative bodies enact less specific legal rules giving judges/courts considerable authority in interpreting these rules based on precedent and other factors. (Less specific) - Judges have flexibility within laws

Overseas Private Investment Corporation (OPIC)

OPIC A U.S. government agency That sells political risk insurance to U.S. businesses operating in countries with which the United States has a bilateral investment treaty - "Political violence risk insurance"

Political Risks

Political forces or problems in a given country will have a meaningful negative impact upon the conduct of business in that country.

Product Safety Law

Product safety laws to which the manufacturers and sellers of products are held.

Economic Risks

Risks that economic problems or mismanagement in a given country will have a meaningful negative impact on the conduct of business in that country. - not independent of political risks Economic risks include: - Restrictions on transfer or exchange of a country's currency, or devaluation of the currency - Questionable ability to repay loans - Human resource and labor relations problems - Inflation and corruption

Monopoly

Situation where there is only a single seller of a product. In an industry and there are very high barriers to enter that industry. - AT&T cell when it first had the cell phone

Totalitarian Government

System of government in which individuals govern without the support or consent of the citizenry. Ex: A military dictatorship. Ie Iran

Tax Haven Countries

Tax haven countries include Mauritius, Belize, the Cayman Islands, Antigua, Barbuda, and the Isle of Man. - Enron illegally evading taxes by mauritius

Copyright

The exclusive legal right that authors, playwrights, publishers, artists, and composers have to publish and disseminate their work as they see fit. (your materials)

Communism

The government or state owns and controls all major factors of production and is philosophically an economically classless society. Give away rights to the collective. "Everything for the collective" I.e The Soviet union, North Korea, China (partially)

Intellectual Property Protections

The limited monopoly rights legally granted by a nation to the creator of intellectual property (CO-PAT-MARKS) Intellectual property protections include: Patents Trademarks Copyrights

Collusion

The practice of companies in which secretly thwart competition amongst themselves. I.e Collaborating on fixed prices or companies setting their own markets

Public Corruption

The practice of making illegal payments to government officials or engaging in blackmail, extortion, or other related activities to obtain government contracts or governmental approval for business activities. - Businesses WITH Gov curpt.

Intellectual Property

The product of intellectual rather than physical activity. Ie. A new drug formula, a biography - Hard to make, but easy to copy

Patent

The right granted to the inventor of a product - Or process that excludes others from selling, making, or using the invention for a certain period of time. - Typically 5 - 20 yrs (The formula)

Corruption

When business illegally alter relevant private and/or public decision making by way of bribes, kickbacks, blackmail, extortion, and related activities. - There is 1. Private corruption and 2. Public corruption

Criminal Law

violations of a nation's laws are crimes punishable by possible incarceration. - sometimes state specific - & can change overtime I.e The probition era and state sales of marjuana