Addressing International Legal and Ethical Issues
Many global organizations face cultural issues when doing business abroad. Those issues can range from religious to political. Religion and politics are usually the front runners concerning the challenges a company must face. When facing these challenges, they must make decisions to be ethically and socially responsible in and to the communities they will be a part of as well as give consideration to any legal actions against their foreign business partner.
Legal Actions Against a Foreign Business Partner
One major consideration of a US company is the impact on their future business relations internationally. Prior to considering legal action, the US-based company must first look to the written contract. The contract should contain any jurisdiction clauses as well as the governing law. This is a must as it will determine which country’s law will be used to resolve the dispute and where the disputes will be resolved ("Legal Action in Foreign Countries", 2013).
Another consideration to be looked at would be the negotiation of the original contract that could lead to delays and further disputes. Usually when there is a need to renegotiate a contract with a foreign business partner, it will have the full backing of the government and country in which it is located as mentioned in the simulation by Vali Saman.
There are laws the United States has put in place governing international business activities. They are broken up into two categories; laws surrounding antitrust, employment, and economic-espionage and laws that apply to companies involved in international business activities ("Do It Right Overseas", 2012).
Factors working against CadMex granting sublicensing agreements
CadMex’s decision to grant sublicensing agreements involves factors that can work against them. As stated by Vali Saman in the simulation, it would require extra time and other pharmaceutical companies would have to be contacted to sublicense the production. Facilities would have to be set up for training on the technical know-how. Just as Jack Brandt from the simulation stated, CadMex would have to ensure the other pharmaceutical companies brought on would be able to meet the standards and production requirements that have already been set and put in place.
This would involve more due diligence on CadMex’s part. Defined by Merriam-Webster, due diligence is the research and analysis of a company or organization done in preparation for a business transaction. According to Taylor, (2013) “Due diligence is an intelligence-gathering tool, but all too often is treated by companies as an end in itself. The most successful companies are those that use due diligence to drive commercial decision-making and provide a framework for operational reform once the deal is done.
A sublicense agreement is an agreement that the licensee grants to another part of the licensee’s rights. This could involve several tiers of sublicenses. It would need to state if the licnsor’s participation in or consent to or notice of, any sublicense is required (Shultz, 2005-2013).
Conflicts with local customs and laws. They ethical and social responsibility of a company involves more than hiring local people to work for the company. A company must take into consideration the cultural heritage a country has, and the religious beliefs of the people. It must also consider the environment and landscaping.
According to a blog spot surrounding Starbucks’ business operations, the corporate pyramid of social responsibility has four categories. The economic responsibility of a company is at the bottom of the pyramid and deals with money. The next level up is the legal responsibility, obeying the law. The ethical responsibility of a company involves the…