NATURAL RESOURCES AND ENVIRONMENTAL SUSTAINABILITY (Ch. 6) 1. LOCATION

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1 NATURAL RESOURCES AND ENVIRONMENTAL SUSTAINABILITY (Ch. 6) 1. LOCATION i. Political Relationships: Geographic Position Dictates Participation in Political and Economic Groups. ii. Trade Relationships: Geographical Proximity Often the Major Reason for Trade Between Nations. 2. TOPOGRAPHY: The Surface Features of a Region. Differences May Require Products to be Altered. Topography Includes: i. Mountains and Plains ii. Deserts and Tropical Forests iii. Bodies of Water Γιάννης Χατζηδημητρίου 61 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

2 2. TOPOGRAPHY (Continued) Mountains, Plains, Deserts and Tropical Forests: i. Divide Markets ii. Create Concentrations of Population iii. Increase the Cost of Transportation Bodies of Water as Inland Waterways and Outlets to the Sea: i. Attract People. ii. Facilitate Transportation. iii. Provide Inexpensive Access to Markets. iv. Permit Low-cost Transportation of Goods and People from a Country s Coast to its Interior. Γιάννης Χατζηδημητρίου 62 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

3 3. CLIMATE: Temperature, Precipitation and Wind. a. The most important element of physical forces. b. Sets the limits on what people can do both physically and economically. Climate influences economic development. Climate can impede distribution. Climate can increase operational costs. Γιάννης Χατζηδημητρίου 63 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

4 4. NATURAL RESOURCES: Anything supplied by nature on which people depend. Principal types of natural resources important to businesspeople include: a. Non renewable and renewable energy sources. b. Non fuel minerals. Both types of energy sources are central to productive capacity. Non fuel minerals are used in all areas of modern living, from house construction to the manufacture of computers and motor vehicles. Γιάννης Χατζηδημητρίου 64 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

5 ECONOMIC AND SOCIOECONOMIC FORCES (Ch. 7) 7 When a firm enters foreign markets, economic analyses become more complex. International Economic Variables and Conditions must be taken into consideration. Large differences in economic conditions (e.g. level of economic development) among countries make International Economic Analyses very difficult. Difficulties in obtaining sufficient and reliable data makes economic analyses even more complex. Γιάννης Χατζηδημητρίου 65 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

6 Dimensions of the Economy and Their Relevance to International Business A. IMPORTANT ECONOMIC DIMENSIONS 1. Gross National Income (GNI) 2. GNI Per Capita 3. Income Distribution 4. Private Consumption 5. Unit Labor Costs 6. Exchange Rates 7. Inflation Rates 8. Interest Rates Γιάννης Χατζηδημητρίου 66 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

7 B. IMPORTANT SOCIOECONOMIC DIMENSIONS 1. Total Population 2. Age Distribution 3. Population Growth 4. Population Density 5. Population Distribution 6. Other Socioeconomic Changes, e.g. rising divorce rates and women participation in work force. Γιάννης Χατζηδημητρίου 67 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

8 LEGAL FORCES (Ch. 8) 8 International Law: Laws that are valid in two or more countries. Two Types: a. Public International Law: Laws Governing Legal Relations Between Governments. b. Private International Law: Laws Governing the Transactions of Individuals and Companies Crossing International Borders. Sources of International Law: a. Bilateral and Multilateral Treaties Between Nations: Conventions, Covenants, Compacts or Protocols. b. United Nation s s International Court of Justice: Creates Law When it Decides Disputes Between Nations. c. Customary International Law: International Rules Derived from Customs and Usage Over Centuries. Γιάννης Χατζηδημητρίου 68 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

9 Extraterritoriality (Δωσιδικία Δωσιδικία/Ετεροδικία): A country s attempt to apply its laws to foreigners or nonresidents and to acts and activities that take place outside its borders not done through force, but by traditional legal means. International Dispute Settlement How Could a Contract Dispute be Resolved? a. Litigation b. United Nations Solution: UN Convention on Contracts for International Sales of Goods (CISG) ratified by 70 countries ( c. Arbitration: A process, agreed to by parties to a dispute in lieu of going to court, by which a neutral person or body makes a binding decision. Γιάννης Χατζηδημητρίου 69 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

10 Intellectual Property Includes: 1. Patents (Ευρεσιτεχνία) 2. Trademarks (Εμπορικό Σήμα) 3. Trade Names (Εμπορική Ονομασία) 4. Copyrights (Δικαιώματα Δημιουργού) 5. Trade Secrets Intellectual Property All result from the exercise of someone s intellect. Owner s are granted exclusive rights which are protected by law. However, protection differs among counties. Γιάννης Χατζηδημητρίου 70 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

11 Common Law or Civil Law? Common Law (Εθιμικό Δίκαιο): Courts make common law as they decide individual cases. Judges have the power to interpret the law and create new law (dynamic( in nature). Jurisdiction has more power to expand rules to fit particular cases. Derived from English law and found in the U.K., U.S., Canada and other countries once under English influence. Civil Law (Κωδικοποιημένο Δίκαιο): Courts decide based on written rules (codes) of law. Judges have the power to apply the law (static( in nature). Jurisdiction is bound by the words in the code. Found in most of Europe, Japan and generally in non- Islamic countries. Γιάννης Χατζηδημητρίου 71 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ

12 1. Taxation Specific National Legal Forces i. Tax Types and Levels ii. Complexity of National Tax Laws and Regulations iii. Compliance with Tax Laws and Their Enforcement iv. Tax Treaties or Conventions 2. Antitrust Laws 3. Bankruptcy 4. Tariffs, Quotas and Other Trade Obstacles 5. Torts (Ζημίες): Product Liability Civil and Criminal 6. Laws for Corrupt Business Practices Γιάννης Χατζηδημητρίου 72 Διοίκηση σε Διεθνείς Επιχειρήσεις, ΜΒΑ