How does a nation's legal environment affect an MNE's marketplace behavior, especially when the rule of man prevails?
Answer: National laws stipulate permissible practices in all forms of business activities, including sourcing, distributing, advertising, and pricing products. MNEs adjust their manufacturing configuration, supply chain coordination, and marketing strategy accordingly. In countries where the rule of man is the basis of law, acceptable marketplace behavior is unpredictable. MNEs often complain of trumped-up charges, solicitation of bribes, and favoritism for local rivals. Especially controversial in legal systems where the rule of man prevails is the issue of the protection—or lack thereof—of intellectual property.