Chapter 12: The Political and Legal Environments Facing Business

Question 1

Civil Law

Answer 1

a body of rules that delineate private rights and remedies, and govern disputes between individuals in such areas as contracts, property, and family.

Question 2

commercial law

Answer 2

The area of law that governs the broad areas of business, commerce, and consumer transactions

Question 3

Collectivism

Answer 3

Perspective that the needs of the group take precedence over the needs of the individual; encourages dependence on the organization

Question 4

Common Law System

Answer 4

A legal system based on tradition, precedent, and custom and usage, in which the courts interpret the law based on those conventions; found in the United Kingdom and former British colonies.

Question 5

Constitutional Law

Answer 5

Law that is created and changed by the people

Question 6

country of origin

Answer 6

Where products or services are created, which affects trade in that consumers may prefer to buy goods produced in one country rather than another usually because of quality perceptions or because of nationalism

Question 7

Criminal Law

Answer 7

Body of laws dealing with crimes against the public

Question 8

Customary Law System

Answer 8

A legal system anchored in the wisdom of daily experience or great spiritual or philosophical traditions

Question 9

Democracy

Answer 9

A political system that relies on citizens’ participation in the decision-making process

Question 10

Individualism

Answer 10

A construct comparing people’s preference to fulfill leisure time, building friendships, and improve skills independently and outside the organization as opposed to collectively and within the organization.

Question 11

Intellectual Property (IP)

Answer 11

property in the form of patents, trademarks, service marks, trade names, trade secrets, and copyrights

Question 12

Intellectual property right (IPR)

Answer 12

Ownership rights to intangible assets, such as patents, trademarks, copyrights, and know-how

Question 13

legal system

Answer 13

rules that regulate behavior, the processes that enforce the laws of a country, and the procedures used to resolve grievances.

Question 14

Mixed Legal System

Answer 14

A legal system that emerges when two or more legal systems function in a country

Question 15

Political Freedom

Answer 15

the right to participate freely in the political process

Question 16

political ideology

Answer 16

The body of complex ideas, theories, and aims that constitute a sociopolitical program

Question 17

Political Risk

Answer 17

potential changes in political conditions that may cause a company’s operating positions to deteriorate

Question 18

Political Spectrum

Answer 18

A conceptual structure that specifies and organizes various types of political ideologies

Question 19

political system

Answer 19

the system designed to integrate a society into a viable, functioning unit

Question 20

Rule of Law

Answer 20

principle that every member of a society, including the ruler or government, must follow the same laws

Question 21

Rule of man

Answer 21

notion that the word and whim of the ruler, no matter how arbitrary, are law

Question 22

Theocratic Law

Answer 22

A situation whereby a nation’s legal system is based on whatever religious text the ruling religion abides by

Question 23

third wave of democratization

Answer 23

Expression to capture the collective set of nations that moved from nondemocratic to democratic political systems during the 1970s through the 1990s

Question 24

totalitarian system

Answer 24

A political system characterized by the absence of widespread participation in decision making and suppression of political and civil freedoms