Addressing International Legal and Ethical Issues LAW/421 Contemporary Business Law

Addressing International Legal and Ethical Issues
With the increasing globalization of business, organizations are finding themselves in an global environment full of legal and ethical challenges. In some international environments, the very legitimacy of a company doing business in a specific country can be a challenge. International transactions and dispute resolution require both an understanding of the law and sensitivity to foreign culture, formal and information power structures and decision-making approaches. This paper will ethical and legal issues involved in resolving legal disputes in international transactions. From an ethical point of view, an organization seeking to expand globally should first consider whether they should conduct business in countries after researching the specific country’s sociopolitical environment. Corrupt public officials, participating in racial or gender discrimination, polluting the environment or violate the human rights of their citizens through slave or child labor or inhuman working conditions (Trevino & Nelson, 2011) is considered corporate culture in some countries.
For example, Foxconn is a multinational electronics contractor for major American, European, and Japanese electronic companies who has been involved in several controversies relating to how it manages employees in China. It is claimed that Foxconn uses underage workers and improperly dispose of hazardous waste and falsified records. Working in these conditions have caused employees to commit suicide, suicide attempts and a major explosion. As the conditions continue to get worse, Apple has decided to address the issue. It its supplier code of conduct Apple details standard on labor issues, safety protections and other topics but suppliers continue to violate aspects of the code and in some instances have violated the law. Apple contends the company will terminate contractual agreements with suppliers that violate labor laws (Weir, 2012) but the only action taken so far is audits performed by the Fair Labor Association.
To ensure a successful global relationship an organization must also ensure there is a successfully negotiated contract identifying the rights, duties and obligations of both parties. The contract should contain a dispute resolution clause which clearly identifies the process to be following in case of a dispute. That clause should include the law governing the contract and the dispute, the procedure to be followed, and whether the parties would arbitrate or litigate to resolve and predetermines which nation’s laws and court system will be used in potential disputes.
Arbitration is an alternative dispute resolution method where both parties present their side of the dispute to one or more neutral parties who renders a decision for a speedier resolution (Melvin, 2011). It is considered international if the parties involved in the business relationship are of different nationalities or the subject matter involves a state other than the country in which the parties are nationals. The difference between international and domestic arbitration is that international arbitration awards have very wide enforceability in many countries because of the acceptance of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Melvin, 2011). Litigation, on the other hand, is the dispute resolution process where the parties and their counsel argue their view in a court of law.
A key factor in all of this is learning about another culture and recognizing that values may be interpreted differently from country to country and ensuring that both legal and ethical issues are addressed in all contractual agreements.

References
Melvin, S.P. (2011). The Legal Environment of Business: A Managerial Approach: Theory To Practice. Retrieved from The University of Phoenix eBook Collection database
Trevino, L.K., & Nelson, K.A. (2011). Managing Business Ethics (5th ed.). Retrieved from The University of Phoenix eBook Collection database
Weir, B. (2012, February 20). A Trip to The iFactory: "Nigtline" Gets an Unprecended Glimpse
Inside Apple's Chinese Core (Video file). Retrieved from ABC News website: http:// abcnews.go.com/International/trip-factory-nightline-unprecended-glimpse-inside-apples chinese/story?id-15748745@