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30 Cards in this Set

  • Front
  • Back


The powers exercised by a state in relation to other countries & supreme powers exercised over its own members

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


National pride can take an anti-foreign business bias, with harassment & controls f foreign investment being supported


Seizing a company's assets without payment


Requires some reimbursement for the government seized investment


A government takes control of some or all of the enterprises in an entire industry

When is Nationalization acceptable in International Law?

1. Satisfies public purpose (it's very important for the country's survival) 2. Includes compensation

Creeping Expropriation

Limits economic activities of foreign firms

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

Political Sanctions

A country may boycott another nation or may issue sanctions against the trade of specific products

Risk of Political and Social Activists

Can interrupt the normal flow of trade

Risk of violence and terrorism

Multinationals need to consider assessing political vulnerability of their activities

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

How does expanding the investment base reduce political vulnerability?

Including several investors and banks in financing an investment in the host country

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

How does Planned Domestication reduce political vulnerability?

Can be profitable and operationally expedient for the foreign firm

How do Political Payoffs reduce political vulnerability?

By paying those in power to intervene on behalf of the foreign company

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

What are the bases for Legal Systems?

1. Common Law

2. Civil or Code Law

3. Islamic Law


Gives an inventor exclusive right to make, use, and sell an invention for a specified period of time


Distinctive mark, motto, device, or emblem used to distinguish it from competing products


Establishes ownership of a written, recorded, performed, or filmed creative work

Three Infringements of Intellectual Property

1. Counterfeiting

2. Associative Counterfeit/Imitation

3. Piracy


Unauthorized copying and production of a product

Associative Counterfeit/Imitation

Product name differs slightly from a well-known brand


Unauthorized publication or reproduction of copyrighted work

3 Forms of Dispute Resolution

1. Mediation (conciliation)

2. Arbitration

3. Litigation


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


- 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

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