Communism Case

Discussion Questions:

1. Assume that you are working for a company whose very survival is being threatened by government regulation. What are some of the ways you can help your company through interest articulation? Could you answer that question as easily for a subsidiary of yours that is located in a foreign country?

Ans: In the United States, we have a relatively open political system with clear means whereby businesses can make their arguments before government representatives. Lobbying, advocacy advertising, committee hearings are all means whereby firms can be heard during the regulatory decision-making process. Political systems vary significantly from country to country, and it could be difficult for HQ personnel to know how to be effectively involved in interest articulation in other countries. Big companies in strategic industries (e.g., petroleum, defense) often centralize political relations at HQ, and HQ deals with governments throughout the globe. Many firms, particularly those pursuing a multidomestic approach to business, rely on their foreign subsidiaries to handle relations with local governments. This approach makes sense when local political expertise is housed at the subsidiary level.

2. Has communism lost its place as the central form of totalitarian political regime? Explain.

Ans: Probably not yet. Over one billion people live in communist China alone, and communist governments remain in other countries as well (e.g., Cuba, North Korea). Though communism's role has been dramatically reduced with the dismantling of the USSR, it is still possible that some ex-communist countries will return to communism if their move toward democracy and capitalism proves too painful (economically) for their people. Military "juntas," another form of totalitarianism have been declining in numbers over the last decade as well. However, there may be a rise in theocratic totalitarianism if certain Muslim countries continue to move in that direction.

3. When China opened the doors to outsiders, it found that it had no legal system or people trained in law. Would you consider that a blessing or a handicap? Explain.

Ans: Despite all the lawyer jokes in the United States, a legal system is vitally important socially, politically, and economically. The lack of a developed legal system in China has made it difficult for foreign firms trying to do business there. Courts do not protect physical or intellectual property to the same extent that they are protected in most other countries. Local producers have copied the products of foreign firms and have been protected by Chinese courts. Also, businesses need enforceable contracts in order to succeed. Weak contract laws in China have made it more difficult for foreign firms to be assured that local parties will fully carry out activities

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