Ch. 7 Political and Legal Systems in National Environments Flashcards
Common Law
The basis of common law is tradition previous cases, and legal precedents set by the nation’s courts through interpretation of statutes, legislation, and past rulings.
Because common law is more open to interpretation by courts, it is more flexible than other legal systems. Thus, judges in a common-law system have substantial power to interpret laws based on the unique circumstances of individual cases, including commercial disputes and other business situations Common law is mainly judicial.
Civil Law
Civil law is considered complete as a result of catch-all provisions found within the law.
Rules and principles form the starting point for legal reasoning and administering justice. The codified rules emerge as specific laws and codes of conduct produced by a legislative body or some other supreme authority.
civil law is primarily legislative in origin and based on laws passed by national and local legislatures.
Common law originated in
England, and spread to Australia, Canada, the United States, and former members of the British Commonwealth.
Civil Law, also known as code law, is found in…
France, Germany, Italy, Japan, Turkey, Mexico, and Latin America.
Civil Law origins
go back to Roman Law and the Napoleonic Code-based on an all-inclusive system of laws that have been “codified”- clearly written and accessible.
Four major Legal systems
Common law, Civil Law, Religious law, Mixed systems
Basis of common law
tradition, past practices, legal precedents set by the nations courts through interpretation of statutes, legislation, and past rulings
Both common law and civil law systems originated in…
and both represent the…
Western Europe…Common values of western Europeans
Key difference in Common Law is primarily ….in origin and based on… whereas Civil Law is primarily … in origin and based on laws passed by …
- judicial* …on court decisions
- legislative…* national and local legislatures
Labels for Country Risk in National environments
Political Systems and Legal Systems
Country Risk Produced by Political Systems and Government takeover of corporate Assets
expropriation-asset seizure with compensation
confiscation- seizure of corporate assets withou compensation
nationalization- takeover of an industry with or without compensation
Country Risk by political systems continued..
Creeping expropriation?
Sanctions?
Embargoes
government modifies regulations and laws after foreign MNE’s have made big local investments in property and plants
A sanction is a type of trade penalty imposed on one or more countries by one or more other countries. Sanctions typically take the form of tariffs, trade barriers, import duties, and import or export quotas.
Ban on exports/imports that forbid trade in specific goods with specific countries
Drivers of Country Risk
three major political systems (totalitarianism, socialism, and democracy)
the four major legal systems(common, civil, religiou laws and mixed systems)
the actors in political and legal systems
the types of country risk produced by political and legal systems
the importance of corporate citizenship and managing country risk (intellectual property rights*)
Political country risks list
WEB-SCENT
boycotts
wars/terrorism
sanctions/embargos
confiscation/expropriation/nationalization
To take advantage of the opportunities and minimize risks, managers must develop
an understanding of all facets of the host community, government, political,legal, and social forces that shape the business landscape of the countries that businesses are conducted in
