Introduction
As many firms continue to expand into multinational corporations, they begin to understand that business environments have their differences. What may be essential and common in their home country could be a taboo in another region. Therefore, it is critical first to assess the political, social, legal, and economic factors of a promising market before establishing a branch in the area. This essay sheds light on the usefulness of assessing business environments by deriving ideas from several articles that indicate the diversity in legal processes in various regions. The litigation procedures are fundamental to a firm so that it can avoid entering into conflicts in a foreign nation.
Body
The Islamic business institutions have the duty of following the Sunnah and Quran so that they do not get carried away by excessive and flamboyant profits as well as the surpluses provided by the conventional economic system. A company that plans on entering the Islamic market has to follow the standards and rules given by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) that is somewhat similar to the Sarbanes and Oxley Act. The strict observance of the ethical credentials and guidelines of the Islamic economic system will make buyers find solace in the foreign businesses. Ethical regulations are vital in society to prevent people from interfering with other individuals’ rights. The Islamic community does not wait for something bad to take place for them to institute a rule (Adebayo & Hassan, 2013).
The Muslim laws are stricter than those in the United States. The moral argument of the Islam goes beyond that of the American corporate policies. The concepts of the Muslims go deeper that the common principles in Ethics such as utilitarianism and relativism. Islamic values are set based on their religion unlike those of the contemporary society. Hence, an enterprise must be willing to integrate its culture with that of Islamic values to attract Muslim consumers. Maria-Jose Garcia-Lopez and Juan Jose Duran also look at the Islamic financial system particularly finance and banking. The internationalization of the sector has led to the evolution of financial integration of services and institutional changes. The basis for most activities in the Islamic financial institutions lies in the doctrine of the Sharia (Durán & García-López, 2012).
Garcia and Lopez evaluate the parallelism between qualitative and quantitative developments of the Muslim economic industry and the establishment of supportive systems. The authors identify a certain convergence in the Islamic banking institutions and products regarding traditional banking activities and the economic integration at the global and regional level. Compared to the Western financial system, the Islamic economy has had lesser effects on international crises (Durán & García-López, 2012). The study done by Bashir Fida and Adeel Javed examines the Islamic financial projects within Pakistan that present both opportunities and challenges. The advancement of infrastructure is a significant indicator of growth and stability. Many nations attempt to develop their infrastructure to compete at a global level (Javed & Fida, 2015).
Considering the crucial role of infrastructure, Islamic financing can have numerous benefits to countries such as Pakistan. The projects can provide new economic channels, but they are yet to be explored. Therefore, Islamic corporations need to get involved in infrastructure financing in Pakistan. The article provides one fundamental technique that can assist companies to maintain good relationships with the political and legal systems in foreign regions. They outline the role of investing and developing the areas. By taking part in programs and projects that can enhance the consumers’ lives, the firm generates a better reputation and loyalty from the buyers (Javed & Fida, 2015). Ji-fu Cai analyzes the judicial and political systems in China. The rules in the country are geared towards the rule of the law and governmental control that maintains organizational efficiency. Cai study addresses the establishment of order and law by evaluating a sample of inefficient investments from listed firms in the Shenzhen and Shanghai Stock Exchange (Cai, 2013).
The level of order and law has tremendous impacts on the quality and amount of investments in China. In a globe where there are not transaction expenses and taxes and the data present is perfect, company decisions are not relevant when making economic choices and the market will obtain its maximum values. However, in the real business surroundings, there is no such thing as a perfect financial system. Reality has transaction costs and information asymmetries in the capital markets that give rise to two consequences: moral hazards and adverse selection. The investment procedures of most corporations are sensitive to their internal cash flows. The sensitivity occurs due to over investments in inefficient financial resources and agency conflicts (Cai, 2013).
The governmental control and the rule of law can alleviate the wasteful investments in Chinese enterprises. Based on financial guidelines and legal processes, the rule of law is a critical institution in supporting the economic development of a nation. It also enables institutional management resulting in effective and limited governance. Most importantly, the rule of law determines the extent of organizational leadership and the financial growth performance and mode in a region. In China, the local government takes precedence by providing incentives and policies that enhance local taxes, encourage jurisdiction jobs, achieve political and social goals, and promote economic development at the local level. The application of the rule of law in the country raises legal well-being and protection of private rights to property; hence, reducing agency conflicts and financial constraints (Cai, 2013).
Hua Shiping looks at the influences of the United States on the legal system in China during the era of reforms. The Chinese borrowed many characteristics from America in the Post-Mao Period. 60-70 percent of their laws on transplantation are derived from the United States. China has copied most of America’s policies than any other region in the globe over the past three decades. The borrowing contradicts the cultural values of the country and the departure of the previous transplantation experiences in China. Massive integration allows business activities between the two regions to take place smoothly due to similar economic foundations and perspectives. It acts as a common ground that prevents the existence of conflicts and financial issues. However, the Chinese should not entirely let go of all their traditional practices with the aim of formulating an economic system like the one in the U.S (Shiping, 2014).
Narendra Subramanian articulates a different ideology by focusing on Hindu Laws during the Post-colonial times. The Post-colonial communities did not respond well to the personal guidelines followed by the colonial cities. Most of the areas sought to keep the colonial rules while others yearned for change. The policy makers in India retained the personal rules concerning religion as well as the minority laws. The colonialists turned the Hindu policies based on their values. They saw the reforms as a suitable mechanism for establishing a citizen and a nation. The new policies followed Western valuation and transformed most Hindu standards to conform to modernity. The changes may have eroded some of the Hindu traditions, but they opened up opportunities for India to interact with a modern and westernized world (Subramanian, 2010).
The international courts and the cohesiveness of the national laws can help to eliminate the limits of the tribunal jurisdiction a country has over another. Take the case of the trademark and copyright action against Indian citizen who sold rights to a foreign website all over the globe. The lawsuit tested the preparation tactics and materials concerning the violation of the United States laws on trademarks. The holder of the copyright lived in Virginia. The court’s enforcement and jurisdiction in any particular foreign cases are finding out whether the laws of the violated State (Virginia) can attain a long-arm statute that exceeds its grasp constitutionally. Due process allows the tribunals to exercise their jurisdiction on someone outside the nation as long as he or she directs his or her electronic or business activities into the violated State (JUSTIA US Law. 2003).
Conclusion
The review provides that various regions have their own rules and policies that may limit jurisdiction during international conflicts. However, there are those that have copied or have been influenced by particular places to borrow policies that may create cohesiveness in the punishment of foreign crimes. Countries such as China and India will find that the penalty or jurisdictions of American and Western courts are similar to theirs. Hence, the resolving of foreign issues amongst the nations may not present much of a challenge. However, for the Islamic policies that seem to bear a different perspective from the Western and American standards, a conflict of interest may arise, and it may be hard to execute tribunal enforcement and jurisdiction.
References
Adebayo, R. I., & Hassan, M. K. (2013). Ethical principles of Islamic financial institutions. Journal of Economic Cooperation and Development, 34, 1, 63-90.
Cai, J. (2013, March). Rule by law, government control and company investment efficiency: Empirical evidence from China. Journal of Politics and Law; Vol. 6, No. 1.
Durán, J., & García-López, M. (2012). The internationalization of Islamic banking and finance: The co-evolution of institutional changes and financial services integration. International Journal of Business and Management. Vol 7, No 13.
Javed, A., & Fida, B. A. (2015, January). Islamic project financing in Pakistan: Current challenges and opportunities ahead. Iranian Journal of Management Studies (IJMS) Vol. 8, No. 1, pp: 47-71.
JUSTIA US Law. (2003). Graduate Management Admission Council v. Raju, 241 F. Supp. 2d 589 (E.D. Va. 2003). JUSTIA Annotations.
Shiping, H. (2014, December). The U.S. impact on China’s legal system during the Reform Era. International Journal of China Studies Vol.5, No.3, pp.681-703.
Subramanian, N. (2010, August). Making family and nation: Hindu marriage law in early postcolonial India. The Journal of Asian Studies / Volume 69 / Issue 03, pp 771-798.
