GETTING GLOBAL: POLITICAL AND LEGAL

GETTING GLOBAL: POLITICAL AND LEGAL ENVIRONMENT

Getting acquainted with how politics and law affect business activities around the world is a critical concern of today’s successful global organizations. Especially in the past ten years, there have been substantial political changes around the world that have shaped business operations. New markets have opened, old ones have closed, and the level of uncertainty that exists presents many marketing challenges. Below I will discuss some of most important political and legal issues that are faced when doing business across borders.

Political Environment:

Stability of Government Policies: Although the preferred political climate for a global firm is stable and friendly, organizations may still profit and succeed in traditionally unfavorable conditions. The most important idea is that the government is stable and the set of rules or codes of behavior that affect business are predictable and adaptable. If the potential for profit exists and is permitted by government policies, a global firm can still function.

There are 5 main political causes of instability that affect the international markets:

Some forms of government seem to be inherently unstable
Changes in ruling political parties
Extreme nationalism
Animosity targeted toward specific countries
Trade disputes
Political Risks: Below is a brief list of the kinds of political risks a company faces when doing business internationally.

Confiscation, Expropriation and Domestication
Economic risks associated with the political environment (exchange controls, local-content laws, import restrictions, tax controls, price controls, labor problems)
Political Sanctions (boycotting trade altogether or on specific products by one country to another)
Political and Social Activist and Nongovenrmental Organizations
Violence, Terrorism and War
Cyberterrorism and Cybercrime
In order to understand how the political environment impacts your business, you must analyze how politically vulnerable your company is. Unfortunately, there are no universal guidelines to do so, but understanding how much your business is effected by the political environment can identify threats to your firm. It also important to note that high priority products and industries in a country may have more favorable government restrictions.
To decrease how vulnerable your business is to political conditions, it is especially important for the marketer to forecast risk and engage in business ventures that may benefit them. Some examples of these practices include forming joint-ventures, expanding your investment base, licensing your products/services, or political bargaining through lobbying.

Legal Environment:

Legal Systems:

It’s important to know the rules you must play by. There are four major bases for legal systems:

Common law: found in the UK, the US, Canada and other countries under English influence
Islamic Law: Derived from the Koran and found in Islamic States
Commercial legal system: Found in Marxist-socialist economies and states like China, and the former Soviet Union
Civil or Code law: found in Germany, France, Japan and non-Islamic and non-Marxist countries
This is just one way to categorize how different nations practice law. For more information on how law systems can be classified, click here.
Juridsiction in International Legal Disputes:

There are three different types of international legal disputes; those between governments, between a company and a government and between two companies. There is no absolute international law system, so there are many ways to handle conflict. The question most commonly asked in these instances are “Whose law governs?”

In order to resolve legal issues, there are three general ways to determine jurisdiction.

On the basis of jurisdictional clauses in contracts
On the basis of where a contract was entered into
On the basis of where the provisions of the contract were performed
Some laws that are essential to focus on that are involved with global marketing are: intellectual property rights laws, commercial laws within countries (such as marketing laws), environmental laws, foreign countries’ antitrust laws, and cyber laws.

Government policies and laws vary from country to country, and doing business abroad means that government may have a greater level of involvement than what you are used to in domestic business. Overall, the primary marketing objective is to develop a plan that will be enhanced or at least not negatively affected by the political and legal environments.

Sources:

Cateora, Philip R., Mary C. Gilly, and John L. Graham. International marketing. 14th ed. New York: Mcgraw-Hill Irwin, 2009. Print.

Kotabe, Masaaki, and Kristiaan Helsen. Global marketing management. Hoboken, NJ: J. Wiley, 1998. Print.

Kết quả (Anh) 1:

GETTING GLOBAL: POLITICAL AND LEGAL ENVIRONMENTGetting acquainted with how politics and law affect business activities around the world is a critical concern of today's successful global organizations. Especially in the past ten years, there have been substantial political changes around the world that have shaped business operations. New markets have opened, the old ones have closed, and the level of economic uncertainty that exists presents many marketing challenges. Below I will discuss some of the most important political and legal issues that are faced when doing business across borders.Political Environment:Stability of Government Policies: Although the preferred political climate for a global firm is stable and friendly, organizations may still profit and succeed in traditionally unfavorable conditions. The most important idea is that the government is stable and the set of rules or codes of behavior that affect business are predictable and adaptable. If the potential for profit exists and is permitted by government policies, a global firm can still function.There are 5 main causes of political instability that affect the international markets:Some forms of government seem to be inherently unstableChanges in ruling political partiesExtreme nationalismAnimosity targeted toward specific countriesTrade disputesPolitical Risks: Below is a brief list of the kinds of political risks a company faces when doing business internationally.Confiscation, Expropriation and DomesticationEconomic risks associated with the political environment (exchange controls, local-content laws, import restrictions, tax controls, price controls, labor problems)Political Sanctions (boycotting trade altogether or on specific products by one country to another)Political and Social Activist and Nongovenrmental OrganizationsViolence, Terrorism and WarCyberterrorism and CybercrimeIn order to understand how the political environment impacts your business, you must analyze how politically vulnerable your company is. Unfortunately, there are no universal guidelines to do so, but understanding how much your business is effected by the political environment can identify threats to your firm. It also important to note that high priority products and industries in a country may have more favorable government restrictions.To decrease how vulnerable your business is to political conditions, it is especially important for the marketer to forecast risk and engage in business ventures that may benefit them. Some examples of these practices include habit-forming joint-ventures, expanding your investment base, licensing your products/services, or political bargaining through lobbying.Legal Environment:Legal Systems:It's important to know the rules you must play by. There are four major bases for legal systems:Common law: found in the UK, the US, Canada and other countries under English influenceIslamic Law: Derived from the Koran and found in Islamic StatesCommercial legal system: Marxist-socialist economies and Found in states like China, and the former Soviet UnionCivil or Code law: found in Germany, France, Japan and non-Marxist and non-Islamic countriesThis is just one way to categorize how different nations practice law. For more information on how law systems can be classified, click here.Juridsiction in International Legal Disputes:There are three different types of international legal disputes; those between governments, between a company and a government and between two companies. There is no absolute international law system, so there are many ways to handle conflict. The question most commonly asked in these instances are "Whose law governs?"In order to resolve legal issues, there are three general ways to determine jurisdiction.On the basis of jurisdictional clauses in contractsOn the basis of where a contract was entered intoOn the basis of where the provisions of the contract were performedSome laws that are essential to focus on that are involved with global marketing are: intellectual property rights laws, commercial laws within countries (such as marketing laws), environmental laws, foreign countries ' antitrust laws, and cyber laws.Government policies and laws vary from country to country, and doing business abroad means that government may have a greater level of involvement than what you are used to in domestic business. Overall, the primary marketing objective is to develop a plan that will be enhanced or at least not negatively affected by the political and legal environments.Sources:Cateora, Philip r., Mary c. Gilly, and John l. Graham. International marketing. 14th ed. New York: Mcgraw-Hill Irwin, 2006. Print.Yoichi kotabe have, Masaaki, and Kristiaan Helsen. Global marketing management. Hoboken, N.J.: j. Wiley, 1998. Print.