ABSTRACT
Chapter 7 discusses another key element of the business environment of a country, namely social institutions. In this chapter, social institutions are defined, and you see some of the potential effects of institutional voids and the challenges such voids represent. The chapter therefore considers several social institutions such as the economic system, the legal system, and the religions of the world. You are exposed to the various types of economic systems (market-based, command, and mixed economies) and their implications for international business in emerging markets. You also look at the world's dominant legal systems. Specifically, international business implications of common law and civil law are examined. The section on religion should give you a good background on the international business implications of the world's major religions. The final section discusses how multinationals can spot institutional voids and what they can do about such voids. Potential responses discussed include identification of voids, potential strategies of joint ventures to deal with such voids, and the importance of developing contextual intelligence.
