CAD Mex Case Study Globalism Has Resulted

CAD Mex Case Study

Globalism has resulted in a number of changes for the economic viability of the modern corporation. As both the developed world evolves in their new market structure, the developing world adds to the pressures and changes necessary to do business in the contemporary environment. Doing business is not the same worldwide, and the citizens of the global village realize that there are different cultural norms, behaviors, and expectations that stakeholders of all types have when thinking about the modern corporation. Business ethics sets up standards for organizations to act in a way that may be considered right or wrong, or at the very least acceptable or unacceptable. As trade barriers are falling around the globe, differences in morality are gaining more interest regarding such issues as human rights, political behavior or even environmental conservation. The core purpose of a multinational business is to continue to grow the organization, find more resources, develop more product and convert new customers. Without fiscal advantages, organizations would not have the impetus to expand globaly -- greater profits, less regulation expense, tax incentives, larger universe of workers, etc. Multinational corporations do, however, need to keep in mind that customs, laws, and expectations may very well change by country, but that there are still remaining overall global moral standards of behavior (Mayfield, 2003).

Our case study revolves around CaDMex Pharma, a pharmaceutical company based in Tampa, Florida. It markets products in 127 countries globally and is heavily invested in the reearch and development of new drugs. Gentura is a biotechnology company based in Candore, a small developing company experiencing viral growth. Gentura recently developed a breakthrough anti-diabetest drug cale ProPrez, but lacks the resources to produce and market it globally. Gentura is in discussion with CadMex to see if they can find a way for form a partnership to access the strengths of both organizations. This is particularly exciting because CadMex has developed a technique that lessens the manufacturing time of certain drugs. CaDMex may license the technique to Gentura as long as CaDMex retains global marketing rights. The complication focuses on Candore, at present under a dictatorship with a variable political and economic climate, unpredictable internal legal systems, and while in the process of becoming a WTO signatory, has not signed any of the major global trade conventions.

In the 21st century global economy it is even more complex to do business across borders and cultures that have divergent legal traditions; making it even more important to utilize legal tools of international commercial arbitration prior to litigation. The rapid and robust economic development of the second and third worlds has encouraged new trade relationships, laws, barriers, restrictions and even treaties. In fact, many global scholars see that one of the core problems in global trade in the 21st century is that after two centuries of protectionism and nationalism there will be a period in which the developing world has a rather steep learning curve which may result in legal barriers to continued globalization and free trade (Uncertainties bedevil plans, 2008).

Candore is a sovereign nation, which has its own set of laws and legal means of addressing conflict. An organization from another country, in this case the United States, has no real legal power within Candore. However, the United Nations Convention on Contracts for the International Sales of Goods (CISG) was created to help international contracts and transactions easier between countries by providing an international law of sales that can be the basis of contractual relationships (CISC, 2011). However, because Candore is not a signatory to CISG, and therefore leaves CaDMex in a precarious position for enforcing any copyright law. For example, there would be no real legal recourse if Gentura used the manufacturing technology on other drugs besides ProPrez. The impetus of trust would focus on Gentura being unable to actually market ProPrez in other countries, even under a different name, if the formulation was patented and the agreement enforceable in other countries that were signatories of major trade agreements.

Just as each sovereign nation has a set of rules and regulations that have arisen out of their particular culture, called law or legalism, once countries began to trade with one another and interact more regularly, it began necessary to find a way to build relationships between nations, and thus find a framework that would aid in disputes and other contractual or legal matters. It differs from national legalism in that in primarily concerns national or corporate behavior rather than that of private citizens. National law may also become international law when treaties delegate jurisdiction (e.g. The European Court of Human Rights or the International Criminal Court or even the Geneva Convention), but all are based on consent. A state may or may not participate in international legal treaties, but then may have consequences in trade or other agreements with member states. However, almost all legalisms surrounding international law state that the sovereignty of the nation is critical for a harmonious international relationship (Stomanson, 2011). Protection for CaDMex would be in the form of pressure from the WTO to ensure Candore to operate legally, and for Gentura to be able to market its product. A contract could be set up that, once signed, would put any legal matters into an International Court of Arbitration or other body, if the signatures included some codicil with the Candorean government.

When there is a conflict of law, the contract verbiage is the most important document to decide the responsibilities of each party. The best solution to protect both sides, and evade the question of local vs. international rights would be to place a clause that chooses International Arbitration over Candorean or U.S. Courts. In fact, Gentura would likely quality for the Foreign Sovereign Immunities Act, would disallow any U.S. legal involvement. Similarly, there would be tremendous risk involved in litigating in Candorean Courts because of the potential of governmental interference (U.S. Government, 1976).