Political, Legal, and Technical Decision-Making Student Advocacy and “Sweatshop” Labor: The Case of Russell AthleticUsing the Six Steps of Decision-Making

 Student Advocacy and “Sweatshop” Labor: The Case of Russell AthleticUsing the Six Steps of Decision-Making framework from this week’s content, develop an responding to the following questions related to the case study Student Advocacy and “Sweatshop” Labor: The Case of Russell Athletic.Recognize decision requirement: What are the factors to consider in a corporation when deciding to outsource labor to developing countries? Include the following:

  1. Diagnosis and analysis of causes: If labor outsourcing to developing countries is a legitimate business strategy, how can it be handled without risk of running into a sweatshop scandal?
  2. Development of alternatives: What are other countries doing to avoid, reduce or eliminate sweatshops? Selection of desired alternative: Decide on alternatives for outsourcing for companies in developed countries, including whether or not to maintain or implement the same high labor standards and regulations as in the home countries.
  3. Implementation of alternatives: Which alternatives would be best for outsourcing for companies in the United States?
  4. Evaluation and feedback: Have your recommendations been implemented in other countries? Are they working? What has been the outcome? 

  • Be 5-6 pages in length, which does not include the title page, abstract, or required reference page, which is never a part of the content minimum requirements.
  • Use APA (7th ed) style guidelines.
  • Support your submission with course material concepts, principles, and theories from the textbook and at least two scholarly, peer-reviewed journal articles. 
  • Review the  Critical Thinking Grading Rubric Critical Thinking Grading Rubric – Alternative Formats  to see how you will be graded for this

Required:

Chapters 2 & 3 in International Management: Culture, Strategy, and Behavior

Chapter 2 PowerPoint slides in International Management: Culture, Strategy, and Behavior

“In-Depth Integrative Case Study 1.1: Student Advocacy and “Sweatshop” Labor: The Case of Russell Athletic” (p. 109), in International Management: Culture, Strategy, and Behavior.

Lander, C. (2018). Foreign investment adaptations to the changing political and economic environments of the agro-food sector: A case study of Cargill Russia. Problems of Post-Communism, 65(3), 201-219. 

The Lancet. (2019). Dealing with drug pricing: not just one solution. Lancet (London, England), 392(10165), 2655.  

Comanor, W., Schweitzer, S., Riddle, J. & Schoenberg, F. (2018). Value based pricing of pharmaceuticals in the US and UK: Does centralized cost effectiveness analysis matter? Review of Industrial Organization, 52(4), 589-602.

International Management

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Chapter 2

The Political, Legal, and Technological Environment

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Learning Objectives

Introduce the basic political systems that characterize regions and countries around the world and offer brief examples of each and their implications for international management

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Learning Objectives (continued)

Present an overview of the legal and regulatory environment in which MNCs operate worldwide, and highlight differences in approach to legal and regulatory issues in different jurisdictions

Review key technological developments, including the growth of e-commerce, and discuss their impact on MNCs now and in the future

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Social Media and Political Change

Role of social media as an organizing tool, a journalistic tool, and a support-building tool in the context of political change underscores:

Technological progress

Political conflict and change

Managing the political and legal environment will be a challenge for international managers

Need to keep track of the rapid changes in the technological environment of global business

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Political Environment

Ideology underlies the actions of government

Reflects beliefs and values and behavior and culture of nations and their political systems

Dimensions in evaluating political systems

Rights of citizens based on a system of government, ranging from democratic to totalitarian

Focus of political system on individualism or collectivism

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Political Environment (continued)

Democratic nations emphasize individualism

Totalitarian nations lean toward collectivism

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Individualism

People should be free to pursue economic and political endeavors without constraint

Similar to capitalism and connected to free-market society

Private property is more successful, productive, and progressive than communal property

Encourages betterment of society, which is related to level of freedom individuals have to pursue economic goals

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Individualism (continued 1)

Research has shown that team performance is negatively influenced by individualists

Competition stimulates motivation and encourages increased efforts to achieve goals

Principles were evolved by David Hume, Adam Smith, and Aristotle

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Individualism (continued 2)

International managers must remain alert as to how political changes may impact their business

Continuous struggle for a foothold in government power affects leaders in office

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Collectivism

Views the needs or goals of society as a whole as more important than individual desires

Plato believed individual rights should be sacrificed and property should be commonly owned

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Collectivism (continued)

Has no rigid form as societal goals differ greatly among cultures

Reflects some attributes of fascism

Nationalism and authoritarianism

Militarism and corporatism

Collectivism

Totalitarianism

Anticommunism

Opposition to economic and political liberalism

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Socialism

Society in which there is government ownership of institutions but profit is not the ultimate goal

Has been practiced in China, North Korea, Cuba

Democratic socialism

More moderate form of socialism

Practiced by Great Britain’s Labour Party, Germany’s Social Democrats, and in France, Spain, and Greece

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Socialism (continued)

Modern socialism draws on philosophies of Karl Marx, Friedrich Engels, and Vladimir Ilyich Lenin

Marx believed that governments should own businesses because in a capitalistic society only a few would benefit

Communism – Extreme form of socialism

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Social Democracy

Socialist movement that achieved its goals through nonviolent revolution

Reasons for not being viable

Businesses that were nationalized were inefficient due to the guarantee of funding and the monopolistic structure

Citizens suffered a hike in both taxes and prices, which was contrary to the public interest and the good of the people

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Social Democracy (continued)

Reasons for nationalization of businesses

Ideologies of the country encourage the government to extract more money from the firm

Government believes the firm is hiding money

Government has a large investment in the company

Government wants to secure wages and employment status because jobs would otherwise be lost

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Political Systems: Democracy

Government is controlled by citizens either directly or through elections

Democratic society cannot exist without at least a two-party system

Once elected, representative is held accountable to the electorate for his or her actions

Apart from getting reelected, the number of terms is limited

Winner can get voted out if he or she does not adhere to the goals of the majority ruling

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Political System: Totalitarianism

Only one representative party, which exhibits control over every facet of political and human life

Power maintained by suppression of opposition

Dominant ideals – Media censorship, political repression, and denial of rights and civil liberties

Common form – Communist totalitarianism

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Political Environment in China

Making trade liberalization a top priority since joining WTO in 2001

Supporting a more open and democratic society

Shifting toward greater tolerance of individual freedoms

Seeking to unleash a more dynamic market economy

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Political Environment in the Middle East

In Iran and Saudi Arabia, laws and government are based on Islamic principles

Arab countries operate business that is in many ways similar to the West

Seeking modern technology and having the financial ability to pay for quality services

Worldwide fallout from war on terrorism has made business environment risky and potentially dangerous

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Legal and Regulatory Environment

Many different laws and regulations in global business operations create confusion and pose challenges to MNCs

Adhering to disparate legal frameworks can prevent MNCs from capitalizing on manufacturing economies

MNCs must carefully evaluate legal framework in each market before doing business

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Global Foundations of Law

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22

Islamic law

Socialist law

Common law

Civil or code law

Islamic Law

Derived from interpretation of the Qur’an and teachings of Prophet Muhammad

Found in most Islamic countries in the Middle East and Central Asia

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Socialist Law

Originates from Marxist socialist system

Continues to influence regulations in former and current communist countries

Soviet Union

China and Vietnam

North Korea and Cuba

Forces MNCs to shy away from countries that follow this law

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Common Law

Derives from English law

Foundation of legal system in:

United States

Canada

England

Australia

New Zealand

Several other nations

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Civil or Code Law

Derived from Roman law

Found in non-Islamic and nonsocialist countries

France

Some Latin American countries

Louisiana in U.S.

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International Law

Sources

Laws of individual countries

Treaties – Universal, multilateral, and bilateral

Conventions – Geneva Convention on Human Rights or the Vienna Convention of Diplomatic Security

Contains unwritten understandings that arise from repeated interactions among nations

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Principle of Sovereignty

Holds that governments have the right to rule themselves as they see fit

One country’s court system cannot be used to rectify injustices or impose penalties in another country unless that country agrees

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Jurisdictional Principles of International Law

Nationality principle: Every country has jurisdiction over its citizens no matter where they are located

Territoriality principle: Every nation has the right of jurisdiction within its legal territory

Protective principle: Every country has jurisdiction over the behavior that adversely affects its national security

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Jurisdictional Principles of International Law (continued 1)

Doctrine of comity

Mutual respect for laws, institutions, and governments of other countries in the matter of jurisdiction over their own citizens

Part of international custom and tradition and not part of international law

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Jurisdictional Principles of International Law (continued 2)

Act of state doctrine

All acts of other governments are considered to be valid by U.S. courts

Even if such acts are inappropriate under U.S. law

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Treatment and Rights of Aliens

Countries have the legal right to:

Refuse admission of foreign citizens

Impose special restrictions on a foreign citizen’s conduct, their right of travel, where they can stay, and what business they may conduct

Nations can deport aliens, which may result in worker shortages

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Forum for Hearing and Settling Disputes

U.S. courts:

Can dismiss cases brought before them by foreigners

Are bound to examine issues such as:

Where the plaintiffs are located

Where the evidence must be gathered

Where the property to be used in restitution is located

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Financial Services Regulation

Global financial crisis of 2008–2010 underscored:

Integrated nature of financial markets around the world

Reality that regulatory failure in one jurisdiction had severe and immediate impacts on others

Crisis and its broad economic effects have prompted regulators to tighten the financial services regulation

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Foreign Corrupt Practices Act (FCPA)

Makes it illegal to influence foreign officials through personal payment or political contributions

Objectives of the FCPA

Stop U.S. MNCs from initiating or perpetuating corruption in foreign governments

Upgrade the image of both the United States and its businesses abroad

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Foreign Corrupt Practices Act (FCPA) (continued)

Implementation allowed the U.S. Justice Department to uncover several developments

MNCs found that they could live within the guidelines set down by the FCPA

Many foreign governments applauded the investigations under the FCPA

Helped them crack down on corruption in their own country

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Bureaucratization

Restrictive foreign bureaucracies are one of the biggest problems facing MNCs

Particularly true when bureaucratic government controls are inefficient and left uncorrected

In many developing and emerging markets, bureaucratic red tape impedes business growth and innovation

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Regulation of Trade and Investment

Individual countries use legal and regulatory policies to affect the international management environment

Trade practices that distort trade

Countries engage in government support

MNCs are required to accept local partners

MNCs are mandated to employ a certain percentage of local workers or produce a specific amount in their country

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Regulation of Trade and Investment (continued)

Trade agreements require that countries extend most-favored-nation status

Questioned by regional trade agreements

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Trends in Technology, Communication, and Innovation

Computers, telephones, televisions, and wireless forms of communication have merged to create multimedia products

Allow users anywhere in the world to communicate with one another

Internet allows people to obtain information from several sources

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Trends in Technology, Communication, and Innovation (continued 1)

Open-source model allows for free and legal sharing of software and code

Can be utilized by underdeveloped countries in an attempt to gain competitive advantage while minimizing costs

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Trends in Technology, Communication, and Innovation (continued 2)

For-profit and nonprofit firms have created low-cost computers

Provided them to several children in the developing world

Great potential exists for disruptions as the world relies more and more on digital communication and imaging

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Areas of International Management Affected by Technology

Biotechnology and nanotechnology

Satellites

Automatic translation telephones

Artificial intelligence and embedded learning technology

Silicon chips

Advancements in computer chip technology

Supercomputers

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Biotechnology

Creation of agricultural or medical products through industrial use and manipulation of living organisms

Advancement has led to pharmaceutical competition and cloning of animals

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Types of E-Business

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45

Business to business (B2B)

Business to consumer (B2C)

E-retailing

Financial services (e-cash)

Telecommunications

Technological leapfrogging is allowing the entire world to have global access to affordable cell phone services

Merging of telephone and the Internet has replaced access via computers

Wireless technology has been beneficial to less developed countries

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Telecommunications (continued)

Reason for the rapid increase in telecommunications services

Many countries believe that without an efficient communications system, their economic growth may stall

Governments cede control to private industry to attract foreign investments

Developing countries are eager to attract telecommunication firms and offer liberal terms

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Technological Advancements, Outsourcing, and Offshoring

Technology has reduced and eliminated middle manageme

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