International Management

Assignment 1

Vietnam

Q1

The political environment in Vietnam has both an opportunity and a threat for the American multinational corporation. In the recent years, the economy has been up and down due to the war in the country. However, Vietnam has been able to solve many of their problems making China a useful economic partner. The political environment has made intellectual property rights more persuasive in Vietnam despite legislative protection (Luthans & Doh, 2012). However, there are threats to America MNC due to the inadequacies in the code of law, insufficient enforcement of various regulations as well as a missed understanding of the private ownership concept of the IPR. There is also a huge and a strong price advantage of counterfeit products compared to that of genuine products. These problems are a threat to the MNC considering doing business in Vietnam.

Q2

The America multinationals are interested in going to Vietnam due to the growing economy. This is because they have a lot of potential that has not being exploited. Being an emerging market great profit can be made when resources are utilized. When comparing China and Vietnam the cost of production is very low in China. Companies tend to go for Vietnam due to the low income that people work for despite them being productive. China is well developed in terms of infrastructure while Vietnam is in the process of developing its own infrastructure. There is less competition in Vietnam creating a great environment for doing business (Luthans & Doh, 2012).

Q3

It is true to say that there are opportunities for high-tech American firms in Vietnam as the country has begun the high-tech time. This gives the firms a chance to produce at low prices with less competition in comparison to China. Vietnam creates a ground similar to the conditions of China hence a great new market. Being a socialist republic Vietnam can establish its social economy through the political arena which can be a significant reason for building a vast infrastructure and wholly improve the country (Luthans & Doh, 2012).

The Chinese Venture

Q1

China’s political environment is important for the Darby Company but to the extent of moderately conductive nature of doing business. The Darby Company has faced huge political challenges due to the agreement with the Chinese government due to the economic stand of China. The economy of china differs with that of most companies developing a great vary in countries that Darby operates in. the concerns of the political environment influence the management decision (Luthans & Doh, 2012).

Q2

Darby is well protected as it has the option of The Hague Court. However, the involved party is liable for their legal cost which makes the organization follow up the case it only when the fund to be awarded is more than the legal fees. This creates the ground for negotiation on small disagreements that end up in negotiations or abandon it with the Chinese. The world court can be made expensive by the Chinese making the process less attractive for the Darby resulting to non-legal methods of negotiation (Luthans & Doh, 2012).

Q3

It is true to say that the present technological and economic environment in China are favorable for Darby. However, if China duplicates Darby technology or competes with it then the position will change and will deteriorate at a high rate. If China decides to stay and support Darby despite the competitive offerings then the company will do better and the vice verse is true (Luthans & Doh, 2012).  It is important to note that despite the technological and the economic factors political and social relationships plays a significant role of great importance of Darby decision making.

Assignment 2

Q1

Pharmaceutical companies do not have a responsibility of distributing the drugs at zero or minimal cost to the emergent countries. The companies are not charity organization hence there is the need to consider the input cost.

Argument for

Many individuals mostly in developing countries are suffering and dying from diseases as they cannot afford proper treatment. This is devastating a reason that calls for various measures to be put in place in order to avoid loss of life as no price can be tagged on it.

Argument against

Pharmaceutical companies argue that there is huge cost that they bear as a result of research and when they give the drugs for free or at low cost they shall not make profit further limiting them to carry more research.

Giving of the drugs away for free can hurt the supplier at low prices as other people may start making business with the drugs. There is also a potential threat of drug misuse that may arise.

Q2

The major argument is that developing countries will make them lose a significant share of the market price as well as profit. The other principle of the NGOs and others organizations is that unfortunate people from developing nations are not able to purchase the original version of the drugs (Luthans & Doh, 2012). Therefore it is true to say that relaxing of the IPR laws will create room for generic drugs that will be affordable to them.

Q3

South Africa may choose to tax duties on the drugs obtained from Western countries the drug prices will increase as well as the importation costs. With an increase in price, demand will fall and many patients will suffer (Luthans & Doh, 2012).

Q4

I think it would be appropriate to change the policy. This is because the LDCs will get enough time to prepare for the exclusive rights protection as it will assist them in receiving relief. However, the policy change has some pessimistic impacts such as the developing nations will not be incapable of providing adequate drugs for themselves and the pharmaceuticals will face long-term threats in their business (Luthans & Doh, 2012).

Q5

Yes. It is necessary to relax some of the IPR rules. This is because it is harder for the people to us the inventor’s ideas without the approval of the IPRS as it protects innovation and creativity. However, it is important to protect the intellectual properties. With relaxing of this laws supplier of AIDS will be made available to the developing world (Luthans & Doh, 2012).

Q6

Through funding and donations MNCs have helped in support and development of drugs that have been used to enhance people’s lives. With continuous donations, a positive difference has been made. Education and awareness have also been enhanced in developing countries AIDS epidemic has been reduced (Luthans & Doh, 2012).

WTO Position

Q3

WTO is a major player in the world’s health. WTO has engaged in extensive collaborative with other world health organization in relation to health and trade matters. It tries to address the need for a policy of health and trade at both national and global level.  It has also facilitated in relaxing the intellectual properties rules in order to enhance the production as well as the distribution of affordable generic antiviral (Luthans & Doh, 2012).

Reference

Luthans, F., & Doh, J. P. (2012). International Management: Culture, Strategy and Behavior, Eight Editions. McGraw-Hill