Politics, Law and Business Ethics Essays - International Business

Abstract Assignment Chapter 3: Politics, Law and Business Ethics The political and legal environment in the home country and the other countries, in which the organization expands itself, is very important for the organizations success or failure. The organizations have to comply with the rules and regulations of the home and host countries to keep their operations running. The businesses need to keep a keen eye on the political and legal situation of the country in order to anticipate their future strategy, because if managers fail to respond to the changing environment then it will be the circumstances that will be running the future of the company. There are three types of political ideologies which are totalitarianism, anarchism and pluralism. The businesses are affected by the rules and regulations imposed by the governments which may support or hinder the operations of a business. There are different kinds of measures which are taken by the government to control the businesses like export sanctions, embargoes and export controls which adhere the governments plan to support their economic conditions. The governments can also control the operations of the international organizations by usage of boycotts which limit the operations of the international organizations or limiting the trade partnerships. There are other regulations like discouraging bribes, corruption and any kinds of restraints on competitive environment. Other than the legal environment the ethical standards of the international firm and the individuals matter a lot. The international firms may look for help through partnerships, localizing its product or services, development assistance and insurance against any sort of loss. Political situation also includes situations like where the government expropriates, confiscates or allows domestication. In such cases the business is faced with high risk which may be backed up by an insurance contract or through legal help from the courts. The law varies from country to country but mainly there are two types of legal systems are followed. One, where each thing is clearly stated by law in writing; and the other, where the law is based on traditions, precedents and customs like United States. The international agreements between the countries like political relations, agreements and treaties directly affect the international businesses. Arbitration is considered as the simpler way of ending any sort of disagreements rather than going through the procedure of litigation.