The Political, Legal, & Technological Environment &

Ethics & Social Responsibility

Carlos Kichul (Warren)

Dong Woo

TopicsChapter 2: The Political, Legal, and Technological

Environment

Chapter 3: Ethics and Social Responsibility

Case: Colgate’s Distasteful Toothpaste

Table of Contents1. Opening

2. Chapter 2 Explanation

3. Chapter 2 Discussion

4. Chapter 3 Explanation

5. Chapter 3 Discussion

6. Case Study

7. Closing

Objectives In what ways do different ideologies and political systems

influence the environment ain which MNCs operate? Would these challenges be less for those operating in the EU than for those in Russia or China? Why or why not?

How will advance in technology and telecommunications affect developing countries? Gives some specific examples.

What lessons can U.S. multinationals learn from the political and bribery scandals in Japan that can be of value to them in doing business in this country? Discuss two.

How do ethical practices differ in the U.S. and in European countries such as France and Germany? What implications does your answer have for U.S. multinations operating in Europe?

Ideologies &Political System

Totalitarianism

Democracy

Discussion 1In what ways do different ideologies and political

systems influence the environment ain which MNCs operate? Would these challenges be less for those operating in the EU than for those in Russia or China? Why or why not?

Legal Environment

Principles of International Law

Principle of Sovereignty Countries should be able to rule themselves.

Nationality Principle Countries have jurisdiction over its citizens regardless of their location.

Territoriality Principle Countries have jurisdiction over their territories.

Protective Principle Countries have jurisdiction over behavior that affects national security.

Doctrine of Comity Countries must respect each other’s jurisdiction over its citizens.

Act of State Doctrine Acts of other countries are allowed in U.S. courts even if there are illegal under U.S. law.

TechnologyThe World is getting smaller.

Technology

Technology http://www.youtube.com/watch?v=-

4CV05HyAbM

New OpportunityIn Bangladeshi, the cellphones are

commercialized for all people in 1997.

Market bigger than before.

Individual incomes have increased and the economy has developed.

Win Win Game

MNCs penetrate New Market.

Developed country take new technology.

Discussion 2How will advance in technology and

telecommunications affect developing countries? Gives some specific examples.

Discussion 3What lessons can U.S. multinationals learn from

the political and bribery scandals in Japan that can be of value to them in doing business in this country? Discuss two.

How do ethical practices differ in the U.S. and in European countries such as France and Germany? What implications does your answer have for U.S. multinations operating in Europe?

Ethicshttp://www.youtube.com/watch?v=91K3Trn4_YI

CSR

Marketing Change

Product Quality Customer World

http://www.youtube.com/user/tomsshoes?blend=8&ob=5

SustainabilityIndividual Exercise

If your boss mention that “we need more sustainability, give your ideas or solutions,” what ideas or solution will you give to him or her?

Sustainability

http://www.youtube.com/watch?v=B5NiTN0chj0

Colgate Case StudyColgate is New York-based.

International sales is half of revenue.

Bought 50% partnership in Hawley and Hazel.

H&H makes Darkie toothpaste.

Asians love it. Americans not amused.

Pressure on Colgate by ICCR.

Darkie changes to Darlie. Colgate distances itself.

Colgate Case Study Cont.

http://www.youtube.com/watch?v=QQI9HGV9uhw (Darkie ad)http://www.youtube.com/watch?v=fUQeZPqGVn0&feature=related (Darlie ad)

Discussion Identify the major strategic and ethical issues faced by

Colgate in its partnership with Hawley and Hazel

What do you think Colgate should have done to handle the situation?

Is it possible for Colgate and Hawley and Hazel to change the toothpastes’ advertising without sacrificing consumer brand loyalty? Is that a possible reason for Colgate’s not responding quickly to domestic complaints?

In the end, was a “no management rights” clause good for Colgate? What could have happened during the negotiations process to get around this problem?