Culture and International Business Systems
heba.malki
Global_Business_Systems_and_Culture_-_Unit_3.pdf
CRKC 5003 Global Business Systems and Culture
Unit 3
Professor David Duffill
Unit Content
One The Evolving Global Context to Business
Two International Business Systems
Three
Legal and political foundations of international
management
International ethics and social responsibility
Four Interacting effectively in an international environment
Five Motivating and leading across cultures
Six The implications of international business practices in
different sectors
Unit 3: Tasks
1.Watch the third lecture and read Chapters 2 and 3 of
Sweeney and McFarlin and skim Chapters 1 and 2 of
International Business (A)
2.Read the International Law chapter of Business Law (D)
3.Skim “The New Political Role of Business in a Globalized
World” especially sections Corporate Responsibility on
Globalized Markets and Conclusions
4.Read “Global Political Economy” and “The Social
Responsibility of International Business”
5.Participate in the Forum discussion
(A): https://saylordotorg.github.io/text_international-business/
(D) Ch. 13 Introduction - Business Law I Essentials | OpenStax
Key elements to consider:
- Legal Systems of the Country
- Significance of International Laws
- Political Factors
- Risk Management
- Ethical Issues and Social Responsibility
Overview
There are several different systems although two (civil
and common law) are most common.
Legal Systems of the Country
The issue can become particularly relevant when legal
systems differ between the organisation’s home country
and the host country.
Multinational corporations can even impact the law in a
country: “MNCs are in a position to effectively escape
local jurisdictions by playing one legal system against the
other … by moving production sites and steering financial
investments to places where local laws are most
hospitable to them” (Shamir, 2004, cited in Scherer and
Palazzo, 2011)1.
Legal Systems of the Country
1: Scherer and Palazzo, 2011: The New Political Role of Business in a Globalized World
International law encompasses a wide range of issues of
international concern, such as human rights, disarmament,
international crime, refugees, migration, problems of
nationality, the treatment of prisoners, the use of force, and
the conduct of war, among others (www.un.org).
Many of the above are of limited direct relevance to
business, whereas treaties (legally binding agreement
between countries) are more important.
Significance of International Laws
Arguably the most important example of a treaty relating to
international business is the General Agreement on Tariffs
and Trade (GATT):
- GATT is overseen by the World Trade Organisation
(WTO), is aimed at “helping to raise standards of living,
achieving full employment, developing the world's
resources, expanding the production and exchange of
goods, and promoting economic development
- The treaty attempts to promote multilateral fair trade and reduce
trade barriers
There are many other international organisations and
treaties, often focused on specific industries, such as IATA
(airlines), IMO (maritime), International Labour Organization
(ILO), WIPO (intellectual property), WHO (world health), etc.
Significance of International Laws
Political Factors
Copyright 2014 © Professor Michael E. Porter
Political Factors
Copyright 2014 © Professor Michael E. Porter
Political Factors
Copyright 2014 © Professor Michael E. Porter
Political Factors
Copyright 2014 © Professor Michael E. Porter
Political Factors
Copyright 2014 © Professor Michael E. Porter
Political Factors
Copyright 2014 © Professor Michael E. Porter
Many organisations, such as Eular Hermes (part of the
Allianz Group), publish detailed country risk profiles.
Risk Management
These can incorporate many elements, as in the following
summary for the UK:
Risk Management
The article by Kolk, 2016 (The Social Responsibility of
International Business) provides a good background to
developments in this area, and the key areas of focus.
A full understanding of the country environment for any
planned international initiative is a critical starting point:
- Organisations such as the Social Progress Initiative
(see Unit 1) help to understand the broader strengths
and limitations of a country, both in an absolute and
relative sense.
Ethical Issues and Social Responsibility
The United Nations
Global Compact is a
partnership among
companies, labour,
academics and
government aimed at
addressing business
solutions to sustainable
development; the
compact can be
considered as a useful
“rule book” for
companies.
Ethical Issues and Social Responsibility
You can find an update of progress at: https://d306pr3pise04h.cloudfront.net/docs/publications%2FUN+Impact+Brochure_Concept-FINAL.pdf
Interim Assessment
Hints to developing data for the target country analysis:
- Outline the endowments (resources, location, climate, etc.)
- A snapshot of country size, growth, population, wealth, etc.
- Summarise briefly the status of monetary and fiscal policies, as well
as human development and political institutions
- Summarise briefly the quality of the business environment,
infrastructure, etc.
Focus more on comparing the target country with the
company’s home country in general terms, plus a
comparison of the target country with its local peer countries.
