The legal, technological, and political characteristics of a country impact the management of a company's international business. Knowing the differences in the legal systems of various nations can oftentimes be critical to the success of foreign investments. Multinational companies can, also, have both positive and negative affects on host countries. And, in the event of an international dispute, the proceedings towards a resolution can be complicated. The technological environment of a country is determined by its" resources and supply. And, last but not least, assessing the political environment in which a firm operates is vital to the success of foreign business.
The Legal Environment.
The legal system of various countries may be based on common law, civil law, religious law, or bureaucratic law. Common law is the type Americans are familiar with, and it is based on the collected court rulings of each and every case heard throughout the history of the United States. Civil law is practiced in the United Kingdom, it is based on a code of rules regarding what is and is not permissible behavior. Religious law recognizes and adheres to the rules and ethics of a particular religion; for example, in Iran, the laws are based on the Muslim religion. Bureaucratic law exists in communist countries and in dictatorships, wherein, there is no little formal law of the land, because bureaucratic law can be suddenly changed at the arbitrary discretion of those in leadership.
In the event of an international dispute, it is best to be prepared in advance. Out textbook lists four questions that must be answered in order to resolve an international dispute:.
1. Which country's law applies?.
2. In which country should the issue be resolved?.
3. Which technique should be used to resolve the conflict: litigation, arbitration, mediation, or negotiation?.
4. How will the settlement be enforced? (67).
The Technological Environment:.