Chapter 2 International Business

contract law

* A contract specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved * In a common law state, contracts are very detailed with all contingencies spelled out * In a civil law state, contracts are shorter and much less specific

In a pure command economy the goods and services that a country produces, the quantity in which they are produced, and the price at which they are sold are all planned by the government

* All business are state-owned, and have little incentive to control costs and be efficient * Because there is no private ownership, there is little incentive to better serve consumer needs * Dynamism and innovation are absent

corruption is present in all countries to some degree, however when a country has a high level of corruption:

* Forgiven direct investment falls * International trade falls * Economic growth falls

A country's legal system is important because laws:

* Regulate business practice * Refine the manner in which business transactions are to be executed * Set down the rights and obligations of those involved in business transactions

The macro environment influences market attractiveness

* The political, economic and legal systems of a country raise important ethical issues that have implications for the practice of international business * The political, economic, and legal environments of a country clearly influence the attractiveness of that country as a market and.or investment site * A democratic country with a market-based economy, protection of property rights, and limited corruption is a more attractive place to do business.

intellectual property rights in other countries

* The protection of intellectual property rights differs greatly from country to country * Paris convention for the protection of industrial property: * Agreement signed by 170+ countries to protect intellectual property rights * Enforcement is lax in many nations especially in China and Tailland

Civil Law

* based on detailed set of laws organized into codes * Found in over 80 countries

Common law

* based on tradition, precedent, and custom * Found in most of Great Britain's former colonies

Intellectual property

A product of the intellect, such as an expressed idea or concept, that has commercial value.

Mixed economy

An economy in which private enterprise exists in combination with a considerable amount of government regulation and promotion.

Foreign Corrupt Practices Act (FCPA)

It is illegal to bribe a foreign government official in order to obtain or maintain business over which the foreign official has authority

Theocratic Law

based on religious teachings (Islamic law is the most widely practiced)

Trademarks

designs and names, often officially registered, by which merchants or manufactures designate and differentiate their products

Copyrights

exclusive rights legal rights of authors, composers, playwrights, artists, and publishers to publish and dispose of their work as they see fit

Patents

give the inventor exclusive rights to the manufacture, use, or sale of that invention

Product liability

involves holding a firm and its officers responsible when a product causes injury, death, or damage

The number of _______ economies in the world today is falling

mixed

public action

public officials extort income or resources from property holders

Product Safety Laws

set certain safety standards to which a product must adhere

Property rights

the legal rights over the use to which a resource is put and over the use made of any income that may be derived from the resource

Private action

theft, privacy, blackmail, and the like by private individuals or groups