Overseas Corporations: Laws and Markets Research Paper

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International Business

The international company to be featured in this paper is Avon International. Avon is a cosmetics company located in about seventy-five countries in five geographical locations: Latin America, North America, Central, Eastern and Western Europe, Middle East and Africa, and Asia Pacific. In addition to cosmetics (fragrances, skin care, personal care and color cosmetics), Avon also produces fashion items (fashion jewelry, watches, apparel, footwear, accessories and children's products) and products for the home (gift and decorative products, house wares, entertainment and leisure products and nutritional produces) (Forbes, 2014).

Avon was founded in 1886 in the United States and has 36,700 employees; Avon has annual sales of around $9.98 billion and is ranked #70 in Forbes' list of "World's Most Powerful Brands" (Forbes, 2014).

The company is unique in that it doesn't generally sell its products in department stores or other retail venues. It hires women to go door-to-door and use direct sales methods so that when the product that a customer has ordered arrives, it is delivered by the sales woman, a smart way to establish a long-term sales relationship.

Avon says it is "committed to empowering women," and that two-thirds of the population that lives under the poverty line are women (www.avoncompany.com). Hence, when a woman in a third world country (or in a poverty area of an industrial nation) becomes a successful sales person she has a "lifeline" in earnings opportunities.

Question Two: There are so many countries in which Avon has a business presence it would be impossible to present even a few of them in this paper.

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So South Africa and China were selected as examples of Avon internationally. In South Africa Avon has to abide by local laws, the same as home-grown businesses. Avon claims that a woman who sells Avon products for 16 months "or more" earns enough to "manage their household expenses" (Avon South Africa). The market system in South Africa is a free / open market where foreign companies are welcomed but must adhere to the legal systems in South Africa. "The Companies Act" has all the legal particulars that go along with operating a for-profit company in South Africa. The "memorandum of incorporation" (MOI) of a private company working in South Africa must prohibit the offering of "shares" to the public (ENSafrica, 2013). A private company like Avon doesn't have to appoint an independent auditor but it is obviously wise to do so because the South African government expects honesty when it comes to profits and taxes.

Foreign workers are not required to have a "separate residence permit," as the work permit they are issued gives them the right to live where they wish to live. The South African Labour Relations Act of 1995 (LRA) governs how employees must be treated by any company and foreign entities are also obliged to follow the LRA guidelines. Under the LRA employees are protected against "unfair dismissal and unfair labour practices," and the LRA regulates disputes between workers and employers, and it regulates strikes and lockouts.

China, meanwhile, is a tightly controlled communist….....

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