Legal strategy plays a key role for multinational companies (MNC) in business decision and operation process. According to Constance Bagley, managers of MNC should know how business risk can be minimized by understanding the law and thereby creating value to the business. For a company that carryon business in an international level has to observe legal obligation of the host country in which it is doing business. As such, managers of MNC are to analyze and to perform on legal advice tendered by company’s legal counsel and company’s legal counsel has to acquaint the business concerns witnessed in a global business atmosphere by MNC’s business managers. Thus, business management and legal strategy are interlinked for a company that operates in many countries.
Under globalization, managers working in MNCs are frequently confronted with a mixture of host –country law and parent country laws that influence and affect business operations in other countries. For instance, Title VII of the Civil Rights Act of 1964 was empowered with extraterritorial effects in 1991 and it is estimated that 1991 amendment would adversely affect about 2100 U.S companies which runs more than 21,000 overseas units in 121 countries. Intricacy increases when U.S law is applied in German civil system or in the civil law of other countries that adhere a Scandinavian or a French replica.
The purpose of this research is to analyze the complexity involved in MNCs business in the areas that have legal implications like insider trading laws , intellectual property issues pertaining to launch of a new product , hiring and dismissing employees , an age discrimination case and company policies on staff welfare like childcare leave.
For a multinational company, procedures for dismissing employees are different according to location of its business. If business parent or subsidiary is located in U.S.A, employees can be terminated