978-0136157397 Chapter 3 Lecture Notes

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Chapter 3: The Political, Legal, and Regulatory Environments of Global Marketing

Learning Objectives

• Describe how the political environment affects global marketing decisions

• Discuss the functions of international law and the legal issues that affect global

businesses

• Explain the significance of intellectual property rights, antitrust laws, and

licensing agreements to global marketers

• Describe the nature of corruption in the global business environment

• Discuss the rising use of arbitration among international firms

• Explain the roles of regulatory agencies and trade agreements in international

trade

Chapter Overview

The legal and political environment of global marketing is the set of governmental

institutions, political parties, and organizations that are the expression of the people in the

nations of the world. In particular, anyone engaged in global marketing should have an

overall understanding of the importance of sovereignty to national governments. The

political environment varies from country to country, and risk assessment is crucial. It is

also important to understand a particular government’s actions with respect to taxes,

dilution of equity control, and expropriation. The legal environment consists of laws,

courts, attorneys, and legal customs and practices. Although these environments are

complex, astute marketers plan ahead to avoid situations that might result in conflict,

misunderstanding, or outright violation of national laws.

Lecture Outline

I. The Political Environment (p. 77)

a. Nation-States and Sovereignty

b. Political Risk

c. Taxes

d. Dilution of Equity Control

e. Expropriation

II. International Law (p. 80)

a. Common Versus Code Law

III. Sidestepping Legal Problems: Important Business Issues (p. 82)

a. Establishment

b. Jurisdiction

c. Intellectual Property: Patents and Trademarks

d. International Trademark Filings

e. Antitrust

f. Licensing and Trade Secrets

IV. Bribery and Corruption (p. 91)

a. Forms of Corruption

b. Estimating the Pervasiveness and Magnitude of Corruption

c. Characteristics of Countries with High Perceived Corruption

d. Anticorruption Laws and Regulations

V. Conflict Resolution, Dispute Settlement, and Litigation (p. 95)

a. Alternatives to Litigation for Dispute Settlement

VI. The Regulatory Environment (p. 98)

a. The European Union

b. The World Trade Organization and Its Role in International Trade

VII. Ethical Issues (p. 100)

VIII. Summary (p.101)

Tables and Figures

Table 3-1 Top 10 Law Firms in the World (p. 82)

Figure 3-1 Software Piracy Rates (p. 86)

Table 3-2 Foreign Company Trademark Filings (p. 88)

Table 3-3 Lawyers: An International Comparison (p. 96)

Table 3-4 International Economic Organizations (p. 98)

Table 3-5 Uncommon Laws in the EU (p. 100)

Sidebars

Sidebar 1 National Controls Create Barriers for Global Marketing (p. 78)

Sidebar 2 The Multilateral agreement on Investment (p. 83)

Sidebar 3 Software Piracy (p. 85)

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