1. International Marketing 国际市场营销学 School of International Trade, Shandong University of Finance and Economics 山东财经大学（筹） · 国际贸易学院

2. School of International Trade, Shandong University of Finance and Economics The Political & Legal Environment of International Marketing Chapter 4

3. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Chapter Learning Objectives 1. The factors that affect stability. 2. The political risks of global business. 3. Reducing the effect of political vulnerability.

4. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Chapter Learning Objectives 4. The three heritages of today’s legal systems 5. The four methods of dispute resolution 6. The legal differences between countries and how to affect international marketing plans

5. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics 4.1 Causes of political instability Some forms of government seem to be inherently unstable Changes in political parties during elections can have major effects on trade conditions Nationalism Animosity targeted toward specific countries Trade disputes themselves Some forms of government seem to be inherently unstable Changes in political parties during elections can have major effects on trade conditions Nationalism Animosity targeted toward specific countries Trade disputes themselves Five main political causes of international market instability ：

6. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics 4.2 Political Risks of Global Business Risks of global business include: 1.Severe political risks 2.Economic policy risks, and 3.Other risks 1.Severe political risks 2.Economic policy risks, and 3.Other risks

7. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Confiscation, the most severe political risk, is the seizing of a company’s assets without payment Expropriation is where the government seizes an investment, but some reimbursement for the assets is made; Nationalization refers to the government seizes an investment and becomes a government run entity Expropriation is where the government seizes an investment, but some reimbursement for the assets is made; Nationalization refers to the government seizes an investment and becomes a government run entity Domestication occurs when the government mandates local ownership and greater national involvement in a foreign company’s management Confiscation, Expropriation, Nationalization and Domestication

8. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Economic Policy Risks 2.Local-Content Laws 3.Import Restrictions 4.Tax Controls 1.Exchange Controls 5. Price Controls 6.Labor Problems

9. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Other Political Risks Political, Social Activists and Nongovernmental Organizations Violence, Terrorism and Wars Cyberterrorism and Cybercrime Political Sanctions

10. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics 2. Expanding the investment base 3. Licensing 4. Planed Domestication 1.Jiont Ventures 6. Political Payoffs 4.3 Strategies to minimize political vulnerability and risk 5. Political Bargaining

11. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics (1) Common law, derived from English law and found in England, the United States, Canada, and other countries once under English influence (2) Civil or code law, derived from Roman law and found in Germany, Japan, France, and in non-Islamic and non-­Marxist countries (3) Islamic law, derived from the interpretation of the Koran and found in Pakistan, Iran, Saudi Arabia, and other Islamic states 4.4 Bases for Legal Systems The bases for the majority of the legal systems of the world include:

12. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Common Law Common law seeks “interpretation through the past decisions of higher courts which interpret the same statutes or apply established and customary principles of law to a similar set of facts” The basis for common law is tradition, past practices, and legal precedents set by the courts through interpretations of statutes, legal legislation, and past rulings

13. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Code Law Under code law, the legal system is generally divided into three separate codes: (1) Commercial code (2) Civil code, and (3) Criminal code Under code law, the legal system is generally divided into three separate codes: (1) Commercial code (2) Civil code, and (3) Criminal code Code law is based on an all-inclusive system of written rules (codes) of law.

14. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Islamic Law The Koran forms the basis for the Shari’ah (Islamic law) It encompasses religious duties and obligations and patterns of social and economic behavior for all individuals It includes issues such as property rights, economic decision making, and types of economic freedom The overriding objective of the Islamic system is social justice

15. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Islamic Law Islamic law prohibits the payment of interest Islamic doctrine advocates risk sharing, individuals’ rights and duties, property rights, and the sanctity of contract Emphasis placed on the ethical, moral, social, and religious dimensions to enhance equality and fairness for the good of society Prohibits investment in activities that violate the Shari’ah, e.g., business dealing with alcohol, gambling, and casinos

16. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics

17. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics 4.5 International Dispute Resolution International disputes can be resolved by: Consultation （协商） Dispute resolution begins with bilateral consultations. Consultation is the first step to resolve any dispute informally.

18. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics 4.5 International Dispute Resolution Conciliation (also as mediation) （调解） is a nonbinding agreement between parties to resolve disputes by asking a third party to mediate differences Conciliation sessions are private and all conferences between parties and the mediator are confidential

19. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics International Dispute Resolution International disputes can be resolved by: The arbitration （仲裁） procedure calls for the parties involved to select a disinterested and informed party or parties as referee to determine the merits of the case and make a judgment that both parties agree to honor In most countries, decisions reached in formal arbitration are enforceable under the law

20. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics International Dispute Resolution Litigation （诉讼） deals with filing a lawsuit to settle commercial disputes Lawsuits should be avoided for many reasons including – Fear of creating a poor image and damaging public relations – Fear of unfair treatment in a foreign court – Difficulty in collecting a judgment that may otherwise have been collected in a mutually agreed settlement through arbitration – The relatively high cost and time required when bringing legal action – Loss of confidentiality

21. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics All countries have laws regulating marketing activities – Promotion – Product development – Labeling – Pricing – Channels of distribution 4.6 Marketing Laws within Countries

22. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Assignment 试分析某中国餐馆欲往法国某大城市开设分店连 锁可能面临的政治风险。 试分析某国产电视机在进入日本市场和美国市场 时所面临的法律环境的差异。

23. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Chapter Summary Vital to every marketer's assessment of a foreign market is an appreciation for the political environment of the country within which he or she plans to operate. Government involvement in business activities abroad, especially foreign-controlled business, is generally much greater than business is accustomed to in the United States. The foreign firm must strive to make its activities politically acceptable or it may be subjected to a variety of politically condoned harassment.

24. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Chapter Summary In addition to the harassment that can be imposed by a government, the foreign marketer frequently faces the problem of uncertainty of continuity in government policy. As governments change political philosophies, a marketing firm accepted under one administration might find its activities undesirable under another. An unfamiliar or hostile political environment does not necessarily preclude success for a foreign marketer if the company becomes a local economic asset and responds creatively to the issues raised by political and social activists. The U.S. government may aid American business in its foreign operations, and if a company is considered vital to achieving national economic goals, the host country often provides an umbrella of protection not extended to others.

25. 山东财经大学（筹） · 国际贸易学院 School of International Trade, Shandong University of Finance and Economics Key Terms nationalism confiscation expropriation Nationalization domestication localization Common law Code law Islamic law Marxist-socialist tenets Conciliation Arbitration Litigation