Questions
3.1 Recommend a perspective an MNE could use to make sense of the political situation in
China
3.2 How would you advise an MNE to manage the intricacies of China’s legal environment?
Questions
3.3 Would you expect piracy to thrive in a democracy or authoritarian state? Why?
3.4 Can you envision a scenario where developers and consumers of IP develop a relationship that
eliminates the profitability of piracy?
3-5 Put yourself in the place of a poor individual in a poor country struggling to improve the
quality of your life. What thoughts might shape how you interpret the legality of IPRs?
ADDITIONAL EXERCISES: Political and Legal Factors
Exercise 3.1. Ask students to discuss the economic difficulties faced when a country
changes from a totalitarian to a democratic political system. Then have them compare the
political transition of a large country (e.g., Russia) to the transition of a smaller country
(e.g., Hungary). Ask whether political transition has been a smoother process in one of the
two countries and examine the reasons for both the differences and the similarities in the two
processes. (LO: 1, Learning Outcome: To discuss the philosophy and practices of the
political system, AACSB: Analytical Skills.)
Exercise 3.2. Some people argue that the legal justification for ethical behavior is the only
truly important justification. However, others argue that such a position is insufficient and
note that everything that is unethical is not necessarily illegal. Ask students to discuss
possible guidelines they might use when underdeveloped legal systems lack clear guidance
with respect to business decisions. (LO: 4, Learning Outcome: To discuss the philosophy
and practices of the legal system, AACSB: Ethical Understanding and Reasoning Abilities.)
Exercise 3.3. Ask students to identify companies, both domestic and foreign, that operate
internationally. Have them explore the possible sources of political risk for each of those
firms, given (i) the countries in which they have a presence and (ii) the basic nature of their
products and operations. (LO: 3, Learning Outcome: To explain the idea of political risk
and describe approaches to managing it, AACSB: Multicultural and Diversity
Understanding.)
Exercise 3.4. Lead the class in a discussion of some of the economic costs associated with
the piracy and counterfeiting of intellectual property rights. Then ask students to explore the
basic issue in light of the following types of legal systems: common law, civil law, and
theocratic law. Is any one system better than the others for effectively dealing with the
problem? Why or why not? (LO: 6, Learning Outcome: To explain legal issues facing
international companies, AACSB: Analytical Skills.)