Totalitarianism
Political Ideology that states that every aspect of people's lives must be controlled for a nation's political system to be effective
Anarchism
The belief that only individuals and private groups should control a nation's political activites
Theocratic Totalitarianism
Political system where people have to abide by a specific code that dictates every aspect of life including clothes and food since these traditions evolved from religion
Left-Wing Totalitarinism
Communism
Democracy
Political System in which government leaders are elected directly by the wide participation of the people or by their representatives
Minority Rights
The rights democracies try to preserve with peaceful coexistence among groups of people with diverse cultural, ethnic and racial backgrounds.
Private Sector
The segment of the economic environment comprising independently owned firms that seek to earn profits
Common Law
The basis of the U.S. legal system
Theocratic Law
A legal tradition based on religious teachings
How is law interpreted in a democratic nation whose legal system is based on common law
The law is interpreted on the basis of tradition, precedent, and usage
How is law interpreted in a democratic nation whose legal system is based on civil law
The law is based on the details set of written rules that constitute a legal code
Basis for business ventures in China
It is necessary to establish a trusting relationship before proceeding with business
Trademarks
Words or Symbol that distinguish a product and its manufacturer from competitors
Function of a Copyright
It gives creators or original work the freedom to publish or dispose of them as they choose
Traditional Philanthropy
The layer of corporate social responsibility whereby a corporation donates money, and perhaps, employee time toward a specific cause
Strategic CSR
When a company incorporates social responsibility into its core operations to create value and build competitive advantage
Utilitarian View
Philosophy which maintains that a company should maximize "good" outcomes and minimize "bad" outcomes wherever it operates
Political System
Structures, processes, and activities by which a nation governs itself
Totalitarian System
Individuals govern without the support of the people, tightly control peoples lives, and do not tolerate opposing viewpoints
Three forms of secular totalitarianism
1. Communist Totalitarianism
2. Tribal Totalitarianism
3. Right-wing Totalitarianism
Democratic System
Leaders are elected directly by the wide participation of the people or by their representatives
Representative Democracies
Citizens elect individuals from their groups to represent their political views
Political Risk
Likelihood that a society will undergo political changes that negatively affect local business activity
Macro Risk
Threatens the activities of all domestic and international companies in every industry
Micro Risk
Threaten companies only within a particular industry or more narrowly defined group
Five actions that cause political risk
1. Conflict and Violence
2. Terrorism and Kidnapping
3. Property Seizure
4. Policy Changes
5. Local content requirements
Seizure of arrests by local governments
1. Confiscation
2. Nationalization
3. Expropriation
3 Ways to Reduce the Effects of Political Risk
1. Adaptation
2. Information Gathering
3. Political Influence
Foreign Corruption Practices Act of 1977
Statue that forbids U.S. companies from bribing gov't officials or political candidates in other nations
Legal System
Set of laws and regulations, including the processes by which its laws are enacted and enforced and the ways in which its courts hold parties accountable for their actions
What is Common Law based on?
Based on the country's legal history (tradition), past cases that have come before its courts (precedent), and how laws are applied in specific situations (usage)
What is Civil Law based on?
Based on a detailed set of written rules and statutes that constitute a legal code, from which flows all obligations, responsibilities, and privileges
What is Theocratic Law based on?
Religious Teachings
Property Rights
Legal rights to resources and any income they generate
Intellectual Rights
Property that results from people's intellectual talent and abilities
Industrial Right
Intellectual Property (property, trademark) or copyright
Product Liability Laws
Responsibility for damage, injury, or death caused by defective products
Antitrust Laws
Designed to prevent companies from fixing prices, sharing markets, and gaining unfair monopoly advantages
Ethical Behavior
Personal behavior in accordance with guidelines for good conduct or morality
Corporate Social Responsibility
Practice of companies going beyond legal obligations to actively balance commitments to investors, customers, other companies, and communities
Freidman View of CSR
Says that a company's sole responsibility is to maximize profits for its owners while operating within the law
Cultural Relativist View of CSR
Says that a company should adopt local ethics wherever it operates
Religious Moralist View of CSR
Says that a company should maintain its home-country ethics wherever it operates
Utilitarian View of CSR
Says that a company should behave in a way that maximizes "good" outcomes and minimizes "bad" outcomes wherever it operates