This document discusses different types of legal systems that influence business, including common law, civil law, and theocratic law. It also covers legal issues that affect international business such as trade regulations, intellectual property protection, and taxation. The document examines ways governments can intervene in business through ownership controls, foreign exchange and trade policies, and marketing regulations. Students are assigned to research the political and legal systems of various countries.

1. LEGAL SYSTEM Legal systems is another dimension of external environment that influence business 1

2. CATEGORIES Common Law Civil Law Theocratic Law 2

3. Common Law Based on tradition, precedent and custom and usage Courts are an important role in interpreting the law according to those characteristic Contracts is very important and must very detailed Ex. United Kingdom & United State of America 3

4. Civil Law Based on very detailed set of laws that are organized into a code as a foundation for doing business Based on how the law is applied to the facts Contracts is shorter and less specific or not very detail Less adversarial than common law Ex. German, France & Japan 4

5. Theocratic Law Based on religions percepts ex. Islamic Law or syariah that based on following sources ex. Al-Quran, As Sunnah & Hadith Is a moral law 5

6. LEGAL ISSUES IN INTERNATIONAL BUSINESS Trade and investment regulation Intelectual property protection Financial flows regulation Taxation Reporting requirement Ownership regulations 6

7. INTERVENE OF GOVERNMENT Reasons of intervene:- Self interest of the government Government needs the support from many constituencies ex. Labour union, religious organization etc. 7

8. INTERVENE OF GOVERNMENT Types of intervention:- Ownership + control - Confiscation - Expropriation - Domestication Foreign Exchange, Export, Import + taxation - Currency down, gov establish exchange control - Gov demand to the MNC to export certain amount of MNC output to earn foreign exchange - Gov demand to the MNC to import raw material to control price - Gov can changes tax rates to increase tax revenue The marketing mix - certain portion of product must locally manufacturing - set a price ceilling - requirement to distribute product that not give profit 8

9. Assignment Find out the following country's political system practices. Information is available through the website or any sources that could be adopted: Malaysia United Kingdom United States of America Japan China Indonesia Saudi Arabia Thailand Brunei Sepanyol Singapura India Vietnam Burma Date to submit: 9