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Cases
629
Economic Development in Bangladesh
When Bangladesh gained independence from Pakistan in
1971 after a brutal civil war that may have left as many as
3 million dead, the U.S. National Security Adviser, Henry
Kissinger, referred to the country as a “basket case.”
Kissinger’s assessment was accurate enough. At the time,
Bangladesh was one of the world’s poorest nations.
Although most of the country is dominated by the fertile
Ganges-Brahmaputra delta, a lack of other natural
resources, coupled with poor infrastructure, political
instability, and high levels of corruption, long held the
country back. To compound matters, Bangladesh is prone
to natural disasters. Most of Bangladesh is less than
12 meters above sea level. The extensive low-lying areas
are vulnerable to tropical cyclones, floods, and tidal bores.
Beginning in the mid-1990s, however, Bangladesh began
to climb the ladder of economic progress. From the early
2000s onward, the country grew its economy at around
6 percent per annum compounded. Today, this Muslim
majority country of 160 million people has joined the
ranks of lower-middle-income nations. Poverty reduction
has been dramatic, with the percentage of the population
living in poverty falling from 44.2 percent in 1991 to
18.5 percent in 2010, an achievement that raised 20.5 million people out of abject poverty. Today, the country ranks
64th out of the 154 countries included in the World Bank’s
global poverty database. It has a considerable way to go,
but it is no longer one of the world’s poorest countries.
Several reasons underlie Bangladesh’s relative economic success. In its initial post-independence period,
Bangladesh adopted socialist policies, nationalizing many
companies and subsidizing the costs of agricultural production and basic food products. These policies failed to
deliver the anticipated gains. Policy reforms in the 1980s
were directed toward the withdrawal of food and agricultural subsidies, the privatization of state-owned companies, financial liberalization, and the withdrawal of some
import restrictions. Further reforms aimed at liberalizing
the economy were launched in the 1990s. These included
making the currency convertible (which led to a floating
exchange rate in 2003), reducing import duties to much
lower levels, and removing most of the controls on the
movement of foreign private capital (which allowed for
more foreign direct investment). The reforms of the
1990s coincided with the transition to a parliamentary
democracy from semi-autocratic rule.
Bangladesh’s private sector has expanded rapidly since
then. Leading the growth has been the country’s vibrant
textile sector, which is now the second-largest exporter of
ready-made garments in the world after China. Textiles
account for 80 percent of Bangladesh’s exports. The
development of the textile industry has been helped by
the availability of low-cost labor, managerial skills, favorable trade agreements, and government policies that
eliminated import duties on inputs for the textile business, such as raw materials. The Bangladesh economy has
also benefited from its productive agricultural sector and
remittances from more than 10 million Bangladesh citizens who work in other nations. Bangladesh is also the
home of the microfinance movement, which has enabled
entrepreneurs with no prior access to the banking system
to borrow small amounts of capital to start businesses.
This being said, the country still faces considerable
impediments to sustaining its growth. Infrastructure
remains poor; corruption continues to be a major problem; and the political system is, at best, an imperfect
democracy where opposition is stifled. The country is too
dependent upon its booming textile sector and needs to
diversify its industrial base. Bangladesh is also one of the
countries most prone to the adverse affects of climate
change. A one-meter rise in sea level would leave an
estimated 10 percent of the country under water and
increase the potential for damaging floods in much of the
remainder. Nevertheless, according to the U.S. investment
bank Goldman Sachs, Bangladesh is one of the 11 lowermiddle-income nations poised for sustained growth.
Sources
W. Mahmud, S. Ahmed, and S. Mahajan, “Economic Reforms,
Growth, and Governance: The Political Economy Aspects of
Bangladesh’s Development Surprise,” World Bank Commission
on Development and Growth, 2008; “Freedom in the World
2016,” Freedom House; “Tiger in the Night,” The Economist,
October 15, 2016; Sanjay Kathuria, “How Will Bangladesh
Reach High Levels of Prosperity?” World Bank blog, January 5,
2017; and Qimiao Fan, “Bangladesh: Setting a Global Standard
in Ending Poverty,” World Bank blog, October 5, 2016.
Case Discussion Questions
1.
What were the principal reasons for the economic
stagnation of Bangladesh after its war for
independence?
2. Explain how the liberalization program in the 1990s
enabled Bangladesh to start climbing the ladder of
economic progress. What are the main lessons here
that can be applied to economic development in
other nations?
3. Bangladesh is dependent for its prosperity upon
agriculture and textile exports. What are the risks
here? How might Bangladesh diversify its industrial
and commercial base?
المملكة العربية السعودية
وزارة التعليم
الجامعة السعودية اإللكترونية
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
Introduction to International Business (MGT 321)
Due Date: 11/11/2023 @ 23:59
Course Name: Introduction to International
Business
Course Code: MGT-321
Student’s Name:
Semester: First
CRN:
Student’s ID Number:
Academic Year:2023-24-1st
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
Marks Obtained/Out of 10
Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
•
•
•
•
•
•
•
•
The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Learning Outcomes:
Knowledge:
1.1: Identify and evaluate the significant trade agreements affecting global commerce
Skills:
2.1: Analyse the effects of culture, politics and economic systems in the context of
international business
Values:
3.1 : Carry out effective self-evaluation through discussing economic systems in the
international business context
Case study
Please read Case 3: “Economic Development in Bangladesh” available in your ebook (International business: Competing in the global marketplace (13th ed.), at
page no.629, and answer the following questions:
Case study Question(s):
1. What were the principal reasons for the economic stagnation of Bangladesh after
its war for independence? Discuss.
(Minimum words: 400, marks: 2)
2. Explain how the liberalization program in the 1990s enabled Bangladesh to start
climbing the ladder of economic progress. What are the main lessons here that can
be applied to economic development in other nations?
(Minimum words: 500,
marks: 4)
3. Bangladesh is dependent for its prosperity upon agriculture and textile exports.
What are the risks here? How might Bangladesh diversify its industrial and
commercial base?
(Minimum words: 500, marks: 4)
Important Notes:
• This is an individual assignment.
• All references must be cited using APA format. This includes both in-text
citations and the reference list at the end of the document.
• Originality, Similarity and Plagiarism Check: Your work must be original. All
papers will be submitted through SafeAssign software to check for similarity and
plagiarism. Any instance of academic dishonesty will result in a grade of zero for
the assignment. No exceptions and no second chances!
Answers
1. Answer2. Answer3. Answer-
Because learning changes everything. ®
Globalization
Chapter 1
© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom.
No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
Learning Objectives
1
Understand what is meant by the term globalization.
2
Recognize the main drivers of globalization.
3
Describe the changing nature of the global economy.
4
Explain the main arguments in the debate over the
impact of globalization.
5
Understand how the process of globalization is
creating opportunities and challenges for
management practice.
© McGraw Hill
What Is Globalization?
1
The Globalization of Markets
• Refers to the merging of historically distinct and separate
national markets into one huge global marketplace.
• Falling barriers to cross-border trade and investment.
• Global tastes.
• Benefits small and large companies.
• Significant differences between national markets.
• Products that serve universal needs are global: oil.
• Competitors may not change among nations.
© McGraw Hill
What Is Globalization?
2
The Globalization of Production
• Sourcing goods to take advantage of differences in cost
and quality of factors of production.
• Factors of production include labor, energy, land, capital.
• Early outsourcing was confined to manufacturing.
• Modern communications technology has advanced outsourcing
today for service activities.
© McGraw Hill
What Is Globalization?
The Globalization of Production
3
continued
• Robert Reich and “global products.”
• Impediments prevent optimal dispersion of activities:
• Formal and informal barriers to trade.
• Barriers to foreign direct investment.
• Transportation costs.
• Political and economic risk.
• Challenge of coordinating globally dispersed supply chain.
© McGraw Hill
The Emergence of Global Institutions
1
Institutions needed to help manage, regulate, and
police global marketplace.
• General Agreement on Tariffs and Trade (GATT).
• World Trade Organization.
• International Monetary Fund.
• The World Bank.
• The United Nations.
© McGraw Hill
The Emergence of Global Institutions
2
The World Trade Organization
• Polices the world trading system.
• Ensures nation-states adhere to the rules.
• Facilitates multinational agreements among members.
• 164 nations that account for 98 percent of world trade
were members as of 2019.
© McGraw Hill
The Emergence of Global Institutions
3
The International Monetary Fund
• Established to maintain order in the international monetary
system.
• Often seen as the lender of last resort.
• In return for loans, requires nation-states to adopt specific
economic policies aimed at returning their economies to
stability and growth.
© McGraw Hill
The Emergence of Global Institutions
4
The World Bank
• Promotes economic development.
• Focused on making low-interest loans to cash-strapped
governments in poor nations that wish to undertake
significant infrastructure investments.
• Considered less controversial than the IMF.
© McGraw Hill
The Emergence of Global Institutions
5
The United Nations
• Promotes peace through international cooperation and
collective security.
• 193 member countries.
• UN Charter – four basic purposes:
• Maintain international peace and security.
• Develop friendly relations among nations.
• Cooperate in solving international problems and in promoting respect
for human rights.
• Be a center for harmonizing the actions of nations.
© McGraw Hill
The Emergence of Global Institutions
6
Group of Twenty (G20)
• Finance ministers and central bank governors of the 19
largest economies in the world, plus representatives from
the European Union and the European Central Bank.
• Represents 90 percent of global GDP and 80 percent of
international global trade.
© McGraw Hill
Drivers of Globalization
1
Declining Trade and Investment Barriers
• 1920s to 1930s: Many barriers to international trade and
foreign direct investment.
• International trade: when a firm exports goods or services to
consumers in another country.
• Foreign direct investment: when a firm invests resources in business
activities outside its home country.
• GATT lowered barriers.
• Uruguay Round extended GATT and established WTO.
© McGraw Hill
Drivers of Globalization
2
Declining Trade and Investment Barriers
continued
• Between 1960 and 2018 the value of the world economy
increased 9.4 times, while the value of international goods
increased 22.4 times.
• Trade in goods and services and the value of foreign direct
investment have all been growing faster than world output.
•
More firms dispersing production process to different locations around the globe.
•
Economies of the world’s nation-states are becoming more intertwined.
•
World has become significantly wealthier in the past two decades.
© McGraw Hill
Figure 1.1 Value of world merchandised trade and
world production 1960 to 2019
Access the text alternative for slide images
© McGraw Hill
Sources: World Bank, 2019; World Trade Organization, 2019; United Nations, 2019.
Drivers of Globalization
3
Role of Technological Change
• Communications.
• Development of the microprocessor single most important innovation
since World War II.
• Moore’s Law predicts that the power of microprocessor technology
doubles and its cost of production falls in half every 18 months.
• The Internet.
• More than half of the world’s population uses the Internet.
• Global e-commerce sales over $2.5 trillion.
• The Internet acts as an equalizer.
© McGraw Hill
Drivers of Globalization
Role of Technological Change
4
continued
• Transportation Technology.
• Commercial jets, superfreighters, and containerization have all
“shrunk the globe.”
• Implications for the Globalization of Production.
• Locating production in geographically separate locations has
become more economical.
• Implications for the Globalization of Markets.
• Cultural distance has been reduced and has brought some
convergence of consumer tastes and preferences.
© McGraw Hill
The Changing Demographics of the
Global Economy
1
The Changing World Output and World Trade
Picture
• 1960s: U.S. accounted for 38.3 percent of world output.
• 2018: U.S. accounted for 24 percent of world output.
• This reflects the faster economic growth of several other
economies, particularly China.
• China and BRIC countries growing more rapidly.
• Developing nations may account for more than 60 percent of world
economic activity by 2025.
© McGraw Hill
The Changing Demographics of the
Global Economy
2
The Changing Foreign Direct Investment Picture
• As barriers to the free flow of goods and services fell, nonU.S. firms increasingly invested across national borders.
• Desire to disperse production activities to optimal locations and to
build a direct presence in major foreign markets.
• Outward stock of foreign direct investment: the total cumulative value
of foreign investments by firms domiciled in nations outside of that
nation’s borders.
© McGraw Hill
Figure 1.2 FDI outward stock outward as a
percentage of GDP
Access the text alternative for slide images
© McGraw Hill
Sources: OECD data 2019, World Development Indicators 2019, UNCTAD data base, 2019
Figure 1.3 FDI inflows (in millions of dollars)
Access the text alternative for slide images
© McGraw Hill
Source: United Nations Conference on Trade and Development, World Investment Report 2019. (Data for 2019–2020 are forecast.)
The Changing Demographics of the
Global Economy
3
The Changing Nature of the Multinational Enterprise
• Multinational enterprise (MNE) is any business that has
productive activities in two or more countries.
• Non-U.S. Multinationals.
• In 2003, 38.8 percent of the world’s 2000 largest multinationals were
U.S. firms.
• By 2019, 28.8 percent of the top 2000 global firms were U.S.
multinationals, a drop of 201 firms.
© McGraw Hill
Figure 1.4 National share of the largest
2,000 multinational corporations in 2019
Access the text alternative for slide images
© McGraw Hill
Source: Forbes Global 2000 in 2019
The Changing Demographics of the
Global Economy
4
The Changing Nature of the Multinational Enterprise
continued
• The Rise of Mini-Multinationals.
• Growth in the number of medium- and small-sized businesses.
• Internet is lowering barriers that smaller firms faced in international
trade.
© McGraw Hill
The Changing Demographics of the
Global Economy
5
The Changing World Order
• Former communist countries present export and
investment opportunities.
• Signs of growing unrest and commitment to market-based economic
systems cannot be assumed.
• Risks of doing business in these countries are high.
• China moving to industrial superpower.
• In Latin America debt and inflation are down, more private
investors, expanding economies.
© McGraw Hill
The Changing Demographics of the
Global Economy
6
Global Economy of the Twenty-First Century
• Barriers to the free flow of goods, services, and capital
have been coming down.
• Strengthened by the widespread adoption of liberal
economic policies by countries that had opposed them.
• Globalization is not inevitable:
• Countries may pull back.
• Risks are high.
© McGraw Hill
The Globalization Debate
1
Antiglobalization Protests
• Began with 1999 protests at WTO meeting in Seattle.
• Protestors now typically show up at major meetings of
global institutions.
• Protestors believe globalization causes detrimental effects
on living standards, wage rates, and the environment.
• Theory and evidence suggest these fears may be exaggerated.
© McGraw Hill
The Globalization Debate
2
Globalization, Jobs, and Income
• Critics of globalization argue:
• Falling trade barriers allow firms to move manufacturing activities to
countries where wage rates are much lower.
•
Destroy manufacturing jobs in wealthy advanced economies.
• Services also being outsourced:
•
© McGraw Hill
Contributing to higher unemployment and lower living standards in their home
nations.
The Globalization Debate
Globalization, Jobs, and Income
3
continued
• Supporters argue:
• Benefits outweigh the costs.
• Free trade will result in countries specializing in the production of
goods and services that they can produce most efficiently, while
importing goods and services that they cannot produce as efficiently.
•
As a result, the whole economy is better off.
•
Companies can reduce their cost structure, and consumers benefit.
© McGraw Hill
The Globalization Debate
Globalization, Jobs, and Income
4
continued
• Data suggests the share of labor in national income has
declined over the past two decades.
• Share of national income by skilled labor has increased.
• Unskilled labor experienced a fall in income, but not necessarily
standard of living due to economic growth.
• The weak growth rate in real wage rates for unskilled
workers is likely due to a technology-induced shift within
advanced economies.
• Technological change has a bigger impact than globalization on
declining share of national income enjoyed by labor.
© McGraw Hill
The Globalization Debate
5
Globalization, Labor Policies, and the Environment
• Critics argue:
• Labor and environmental regulations increase manufacturing costs.
• Lack of regulation can lead to abuse.
• Firms move production to nations that do not have regulations.
• Supporters argue:
• Tougher environmental regulations and stricter labor standards go
hand in hand with economic progress.
• Free trade leads to less labor exploitation and less pollution.
© McGraw Hill
Figure 1.5 Income levels and
environmental pollution
Access the text alternative for slide images
© McGraw Hill
Source: C. W. L. Hill and G. T. M. Hult, Global Business Today (New York: McGraw-Hill Education, 2018
The Globalization Debate
6
Globalization and National Sovereignty
• Critics argue:
• Shift of power away from national governments toward supranational
organizations.
•
WTO, EU, United Nations.
• Supporters argue:
• The power of supranational organizations is limited to what nationstates collectively agree to grant.
• These organizations exist to serve the collective interests of member
states.
© McGraw Hill
The Globalization Debate
7
Globalization and the World’s Poor
• Critics argue gap between the rich and poor nations has
gotten wider.
• Totalitarian governments.
• Poor economic policies.
• Corruption and lack of property rights.
• Expanding populations in developing countries.
• Debt burdens.
• Supporters argue best way to change the situation is to
lower barriers to trade and investment and promote free
market policies.
© McGraw Hill
Figure 1.6 Percentage of the world’s population
living in poverty during 1981 to 2015
Access the text alternative for slide images
© McGraw Hill
Source: World Bank Data Base on Poverty and Equity, World Development Indicators, 2019
Managing in the Global Marketplace
Managers
• International business is any firm that engages in
international trade or investment.
• Managing an international business differs from managing
a purely domestic business.
• Countries are different.
• Range of problems is wider and problems more complex.
• Must find ways to work within limits imposed by government.
• Transactions involve converting money into different currencies.
© McGraw Hill
Because learning changes everything.
www.mheducation.com
© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom.
No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
®
Because learning changes everything. ®
National Differences
in Political,
Economic, and Legal
Systems
Chapter 2
© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom.
No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
Learning Objectives
1
Understand how the political systems of countries
differ.
2
Understand how the economic systems of countries
differ.
3
Understand how the legal systems of countries differ.
4
Explain the implications for management practice of
national differences in political economy.
© McGraw Hill
Introduction
Political Economy
• Political, economic, and legal systems of a country.
• These systems are interdependent.
• They influence each other.
© McGraw Hill
Political Systems
1
The system of government in a nation is called the
political system.
• Assessed according to two dimensions:
• Emphasis on collectivism or individualism.
• Degree to which they are democratic or totalitarian.
© McGraw Hill
Political Systems
2
Collectivism and Individualism
• Collectivism:
• The needs of society as a whole are generally viewed as being more
important than individual freedoms.
• Socialism:
• Public ownership of the means of production for the common good.
• Karl Marx: The few benefit at the expense of the many in a capitalist
society where individual freedoms are not restricted.
• Communists versus social democrats.
•
© McGraw Hill
Privatization.
Political Systems
3
Collectivism and Individualism
continued
• Individualism:
• An individual should have freedom in economic and political pursuits.
• The interests of the individual should take precedence over the
interests of the state.
• Two tenets:
•
Guarantee of individual freedom and self-expression.
•
Welfare of society best served by letting people pursue their own economic selfinterest.
© McGraw Hill
Political Systems
4
Democracy and Totalitarianism
• Democracy: government is by the people, exercised either
directly or through elected representatives.
• Totalitarianism: one person or political party exercises
absolute control over all spheres of human life and
prohibits opposing political parties.
• Democracy and individualism go hand in hand, as do the
communist version of collectivism and totalitarianism.
© McGraw Hill
Political Systems
5
Democracy and Totalitarianism
continued
• Democracy:
• Representative democracy: citizens periodically elect individuals to
represent them.
• Includes a multitude of safeguards that are typically based in
constitutional law, including:
•
Freedom of expression.
•
Free media.
•
Universal adult suffrage.
•
Fair court system.
© McGraw Hill
Political Systems
6
Democracy and Totalitarianism
continued
• Totalitarianism:
• Communist totalitarianism: socialism can be achieved only through a
totalitarian dictatorship.
• Theocratic totalitarianism: monopolized by a party, group, or
individual that governs according to religious principles.
• Tribal totalitarianism: a party, group, or individual that represents the
interests of a particular tribe monopolizes political power.
• Right-wing totalitarianism: generally permits individual economic
freedom but restricts individual political freedom, including free
speech, on the ground that it would lead to the rise of communism.
© McGraw Hill
Political Systems
7
Democracy and Totalitarianism
continued
• Pseudo-democracies:
• Lie between pure democracies and complete totalitarianism
systems.
• Authoritarian elements have captured some or much of the
machinery of state and use this to deny basic political and civil
liberties.
© McGraw Hill
Economic Systems
1
Market Economy
• All productive activities are privately owned.
• Production is determined by supply and demand.
• To work, supply must not be restricted.
• Role of government is to encourage vigorous free and fair
competition.
© McGraw Hill
Economic Systems
2
Command Economy
• Government plans the goods and services, quantity and
price, then allocates them for “the good of society.”
• All businesses are state owned.
• Historically found in communist countries.
• No incentive for individuals to look for better ways to
serve needs.
© McGraw Hill
Economic Systems
3
Mixed Economy
• Some sectors are privately owned, some are government
owned.
• Once common in developed world, less so now.
• Government may aid troubled firms whose operations are
vital to national interests.
• U.S. helped Citigroup, General Motors.
© McGraw Hill
Legal Systems
1
Legal systems of a country refer to:
• Rules or laws that regulate behavior.
• Process through which laws are enforced.
• Process through which redress for grievances is obtained.
• Influenced by the prevailing political system.
© McGraw Hill
Legal Systems
2
Different Legal Systems
• Common law:
• Based on tradition, precedent, custom.
• More flexible than other systems.
• Civil law:
• Based on detailed laws organized into codes.
• Less adversarial than a common law system.
• Theocratic law:
• Based on religious teachings.
• Most common is Islamic law.
© McGraw Hill
Legal Systems
3
Differences in Contract Law
• Contract: specifies conditions under which an exchange is
to occur, and details rights of parties involved.
• Contract law: body of law that governs contract
enforcement.
• Under common law:
•
Contracts are very detailed with all contingencies spelled out.
•
More expensive and can be adversarial.
• Under civil law:
•
© McGraw Hill
Contracts tend to be much shorter and less specific.
Legal Systems
4
Differences in Contract Law
continued
• United Nations Convention on Contracts for the
International Sale of Goods (CISG):
• Establishes a uniform set of rules governing certain aspects of the
making and performance of everyday commercial contracts between
sellers and buyers who have their places of business in different
nations.
• Applies automatically to all contracts for the sale of goods between
different firms based in countries that have ratified the convention,
unless the parties opt out.
© McGraw Hill
Legal Systems
5
Property Rights and Corruption
• Property: a resource that an individual or business owns.
• Land, buildings, equipment, capital, mineral rights, businesses,
intellectual property.
• Property rights: legal rights over the use to which a
resource is put and over the use made of any income that
may be derived from that resource.
© McGraw Hill
Legal Systems
6
Property Rights and Corruption
continued
• Private action:
• Theft, piracy, blackmail by private individuals or groups.
• Public action and corruption:
• Public officials extort income, resources, or property.
•
Can be done legally by levying excessive taxation, requiring licenses or permits
from property holders, taking assets into state ownership without compensating
owners, redistributing assets without compensating prior owners.
•
Can be done illegally through corruption, demanding bribes.
© McGraw Hill
Figure 2.1 Rankings of corruption by country, 2018
Access the text alternative for slide images.
© McGraw Hill
Source: Constructed by the author from raw data from Transparency International, Corruption Perceptions Index 2018.
Legal Systems
7
Property Rights and Corruption
continued
• Foreign Corrupt Practices Act (FCPA):
• Illegal to bribe a foreign government official to obtain or maintain
business over which that foreign official has authority.
• Requires all publicly traded companies to keep detailed records that
would reveal whether a violation of the act has occurred.
• Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions (1997):
• Bribery of a foreign public official is a criminal offense.
• Allows for facilitating or expediting payments.
© McGraw Hill
Legal Systems
8
The Protection of Intellectual Property
• Refers to property that is the product of intellectual activity,
such as computer software, a screenplay, a music score.
• Patent: inventor’s exclusive rights for a defined period.
• Copyrights: exclusive legal rights of authors, composers,
playwrights, artists, and publishers.
• Trademarks: officially registered designs and names used to
differentiate products.
• World Intellectual Property Organization.
• Paris Convention for the Protection of Industrial Property.
© McGraw Hill
Legal Systems
9
Product Safety and Product Liability
• Product safety laws set certain safety standards to which a
product must adhere.
• Product liability involves holding a firm and its officers
responsible when a product causes injury, death, or
damage.
• Can be much greater if a product does not conform to safety
standards.
• Criminal and civil laws apply.
• Raises ethical issues when doing business abroad.
© McGraw Hill
Focus on Managerial Implications
The Macro Environment Influences Market
Attractiveness
• Two broad implications:
• Political, economic, and legal systems of a country raise important
ethical issues that have implications for international business.
• Political, economic, and legal environments of a country clearly
influence the attractiveness of that country as a market or investment
site.
•
© McGraw Hill
A country with democratic political institutions, market-based economic system, and
strong legal system clearly more attractive to do business in.
Because learning changes everything.
www.mheducation.com
© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom.
No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
®
Because learning changes everything. ®
Differences
in Culture
Chapter 4
© 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom.
No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
Learning Objectives
1
Explain what is meant by the culture of a society.
2
Identify the forces that lead to differences in social
culture.
3
Identify the business and economic implications of
differences in culture.
4
Recognize how differences in social culture influence
values in business.
5
Demonstrate an appreciation for the economic and
business implications of cultural change.
© McGraw Hill
Introduction
Understanding and adapting to the local cultural is
important in international companies.
• Cross-cultural literacy refers to understanding how cultural
differences across and within countries can affect the way
business is practiced.
• Cultural differences create a common bond among people.
• Numerous values and norms exist in these cultural systems that
might affect international business.
• Culture can and does evolve.
© McGraw Hill
What Is Culture?
1
Culture
• A system of values and norms shared among a group of people and
that when taken together constitute a design for living.
Values
• Ideas about what a group believes to be good, right, and desirable.
Norms
• Social rules a
