Quiz 6: Intellectual Property Rights and Other Legal Forces
Companies should be aware of the different kinds of risks which are associated to carry out the business in another country. Different kinds of countries have different kinds of risks. Company MM is considering the establishment of new factory in Country LR. The strategic division is in the process of assessing the specific location for the operation. The search for the countries has been narrowed to Country AA, Country BB and Country SS. The different countries have the different kinds of risks associated in order to carry out business. Country AA is a developing country which is has risk of suitable transportation arrangements and water supply to carry out businesses. Country BB is a developing country which has strict government policies and regulations to carry out business by companies from other countries. Country SS has a different culture and the climate is very humid which is not suitable to carry out business operation by Company MM. Company MM choses to establish the new factory in Country BB, as it has strict regulation by the government for carrying business. There will be documented and legislation of policies and agreements made by Company MM, before starting the business. The agreements and legislation with the government rules will make Company MM safe and secure to conduct business.
Chocolate is one of the most traded products of agriculture in the world. Most of the chocolate consuming countries are all in the developed countries and world's best cocoa is produced in Country WW. The beans are mixed from different countries and transported to processing plants in different countries. Results showed that in Country WW, most of the cocoa farms involve child labor to work in the hazardous condition. Most of the child is under 14 years of age, and there condition of working is slave like. Less pay, more work with instances of getting kidnapped and economic situations are faced by children below fourteen years. Labor practices in another country are not a relevant consideration in the international trade. This is against the ethical and moral value consideration in business. Labor practices in another country in international trade leads to devaluing the value and the cost of the labor. The laborers are made to work at cheaper rate in international trade in comparison to the laborers working in same country. The time and working hours are curtailed which are not suitable labor practices in international trade.
There are different types of government ownerships and government owned firms in a country. The firms which are owned by the government of a country is known as nationalized firms. Government has the right to nationalize firms due to several reasons. Government might nationalize firms due to the following reasons: • To extract money from the firms. • When the government suspects that the firms are concealing profit. • When government believes that it can run the firms better and earn more profit after nationalization. • In order to preserve the jobs by making dying industries stand on the systems of life support as backed by government. • When the government has provided funds to the industry or firm. The private companies at times that the government owned firms are having unfair advantages. Government owned firms have the unfair advantage over the privately owned companies due to the following reasons: • Government owned firms do not operate with the motive of profit, but for public welfare, which allows them to cut prices which is unfair towards private companies. • Government owned companies gets financing at cheaper rate in comparison to private companies. • Government owned companies gets government contracts but, private companies do not get it easily and on low costs. • Government owned companies get export assistance but, private companies do not get such assistance, which is unfair. • Government owned firms can hold down wages by the government assistance, which is not as much easy as in case of private firms. Hence, the government owned firms have unfair advantage over the privately owned firms.