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Explore managing risks in foreign societies, covering losses with insurance, and understanding legal differences worldwide, such as Common Law, Civil Law, Muslim Law, and International Law. Discover how global organizations like the United Nations and the World Trade Organization influence international business, and learn about choosing between arbitration and litigation in case of disputes.
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Managing the Risk • Demonstration of concern with host country’s society can be effective. • Firms can take out insurance to cover losses due to political and economic risk.
Legal Differences and Restraints • Countries differ in their laws as well as in their use of the law. There are two major legal systems worldwide: • Common Law & Civil Law Muslim Law
International Law • The World Trade Organization defines internationally acceptable economic practices for its member nations. • The United Nations has developed codes and guidelines that affect international business.
In cases of disagreement, the parties can choose: • Arbitration: Procedures are quicker and often spelled out in the original contract • Litigation: Often involves extensive delays and is very costly
