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Microsoft in China

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Course Textbook
Daniels, J. D., Radebaugh, L. H., & Sullivan, D. P. (2015). International business: Environments and operations (15th ed.). Upper Saddle River, NJ: Pearson Education.


Write a paper incorporating the external influences that impact business. You should address each facet illustrated below. Your paper needs to be a minimum of three pages in length, double spaced, Times New Roman 12 point font, using APA style guidelines. The reference listings and title page do not count towards the minimum page requirement.

An abstract is not required.

Your paper should also include a minimum of four sources/references, in addition to your textbook. At least two sources must come from any of the academic databases located.

Please do not plagiarize others' work or submit a paper you have previously submitted. All sources quoted or paraphrased must have proper in-text citations with a corresponding listing in the reference page.

You are to choose one U.S. based company that has global operations in another country. You are to discuss each facet below and how it may impact the way the company you chose does business internationally. For example, the legal systems are civil law, common law, and theocratic law. If Coca-Cola does business in Iran, how does the theocratic legal system impact the way Coca-Cola does business? Thus, you are to;
MBA 6601, International Business 3
 Delineate the legal systems and discuss which legal system and political ideology applies to the country you chose that the company does business in.
 Delineate the economic systems and discuss which economic system applies to the country you chose that the company does business in.
 Discuss the culture of the country (both verbal and nonverbal) and how it may impact the way the company does business internationally.

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Microsoft in China
China is one of the most preferred destinations for businesses to set up their operations. However, success is not always guaranteed for multinationals seeking expansion opportunities in China. There are differences in Legal systems, Economic environment and culture of the country which can impact the way business is done.
Legal System
The legal system of China is referred to as socialist legal system by the government. The legal system of the People's Republic of China (PRC) is based on the PRC Constitution and is made up on a hierarchy of written laws, regulations and administrative directives ("Doing business in...", 2015). The However, the basis of this legal system is Civil Law. Because of the sudden shift of the power to China, the legal system of the country is evolving. Policymaking and administration is ambiguous, that is, sometime it can be highly centralized and formal and at other times it could be decentralized and informal. There are also gaps in the law. Policies can change all of a sudden without any warning and some of the changes may not be liked by many. Microsoft can face challenges due to such challenging legal environment. Chinese government can take advantage of technical intricacies in growing regulatory system to promote domestic companies and deter foreign competitors. One of the tools that the government is using is antitrust. Microsoft has already landed in soup because of allegations from Chinese antitrust regulators that Microsoft is engaging in anticompetitive behavior. Hence, there will always be uncertainty for Microsoft even if the company complies by all local ...

Solution Summary

The expert provides an analysis of legal, economic and cultural environment in China and how it impacts Microsoft

See Also This Related BrainMass Solution

I need your help answering some questions on a Case Study

I need your HELP answering some questions for this case study "Microsoft's Troubles in China" for each question I need to summarize the strategic and operational challenges facing global managers. And I need to comment on recent global developments affecting the company in this case study

This are the questions:

1. How important is China to Microsoft long term future?

2. What are the legal impediments to Microsoft growing its sales in China? What are the political impediments?

3.Why do you think it is so difficult to reduce software piracy in China? What strategies might Microsoft adopt to try to limit piracy in China? Are there ways of selling software that might make it difficult for piracy to occur?

4. Given the high level of software piracy around the world, to what extent can the threat of trade sanctions be used to force the Chinese to enforce their own intellectual property rights regulations?

5. In the context of the Chinese market, what advantages does Limux operating system have over Microsoft's Window 2000? What advantages does Microsoft have over Limux?

Microsoft's Troubles in China

Microsoft, the world's biggest personal computer software company, developed MS-DOS and then Windows, the operating system and graphical user interface that now reside on more than 90 percent of the world's personal computers. In addition, Microsoft has a slew of best selling application software, including its wordprocessing program (Microsoft Word), spreadsheet program (Excel), and presentation program (Power Point). An integral part of Microsoft's international strategy has been expansion into mainland China, which was projected to become the third largest PC market in the world in 2001. With a population of 1,273 billion, China represents a potentially huge market for Microsoft. Microsoft's initial goal was to buid up Chinese sales from nothing in 1994 to $100 million by 2000, a goal that it appears to have met. However, sales could have been very much higher were it not for a number of problems that Microsoft encountered in China.

The most obvious and serious obstacle to Microsoft's success in China has been the rampant level of software piracy. some 90 to 95 percent of the software used in China is pirated, according to figures from the Business Software Alliance. Microsoft is a prime target of this activity. Most Microsoft products used in China are illegal copies. China's government is believed to be one of the worst offenders. Microsoft's lawyers complain that Beijing doesn't budget for software puchases, forcing its cash-strapped bureaucracy to find cheap software solutions. Ths, Microsoft claims, much of the government ends up using pirated software. To make matters worse, China is an exporter of counterfeit software. Microsoft executives don't have to go far to see the problem. Just a few blocks from the company's Hong Kong office is a tiny shop that offers CDROM's each crammed with dozens of computer programs that collectively are worth about $20,000. The asking price is about 500 Hong Kong dollars, mor $52.

Microsoft officials are quick to point out the problem arises because Chinese judicial authorities do not enforce their own law. Microsoft found this out when it first tried to use China's judicial system to sue software pirates. Microsoft pressed officials in China's southern province of Guangdong to raid a manufacturer that was producing counterfeit holograms that Microsoft used to authenticate its software manuals. The chinese authorities prosecuted the manufacturer, acknowledged that a copyright violation had occurred, but awarded Microsoft only $2,600 and fined the private company $3,000. Undeterred the limited victory, Microsoft continued in its attempts to use the legal system in China to limit copyright violations.

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