The Political and Legal Environment in Global Business

These flashcards cover key terms and concepts related to the political and legal environment in global business, as discussed in the lecture.

Sovereignty

The supreme power exercised by a state in relation to other countries and over its own members.

Democracy

Government by the people, exercised either directly or through elected representatives.

Totalitarianism

Government in which one person or political party exercises control over all spheres of human life and opposing political parties are prohibited.

Political Risk

The likelihood that political forces will cause unexpected and drastic changes in a country’s environment affecting business opportunities.

Confiscation

The seizing of a company’s assets without payment.

Expropriation

When the government seizes an investment but provides some reimbursement for the assets.

Domestication

The gradual transfer of foreign investments to national control and ownership.

Terrorism

Use of violence against multinationals to embarrass governments or generate funds.

Political risk assessment

An attempt to forecast political instability to help businesses evaluate potential political events.

Intellectual Property

Property that is the product of intellectual activity, including patents, copyrights, and trademarks.

Patent

Protects the inventor of a product for a certain period through exclusive use rights.

Copyright

Gives exclusive rights to authors, composers, and artists to publish and distribute their work.

Trademark

Designs and names by which manufacturers differentiate their products.

Foreign Corrupt Practices Act

Makes it illegal for companies to pay bribes to foreign officials.

Sampling in field surveys

A major problem in gathering primary data due to the lack of adequate demographic data.

Cultural differences

Factors that affect the ability and willingness of individuals to respond in research.

Globalization

The shift towards a more integrated and interdependent world economy.

SWOT analysis

A strategic planning tool used to identify strengths, weaknesses, opportunities, and threats related to business competition.