that effects e-commerce, marketing, business, and int'l business
updated 2008 May 13
| the
Political / Legal / Regulatory Environment
that effects e-commerce, marketing, business, and int'l business updated 2008 May 13 |
|
see also witiger.com/internationalbusiness/politicalenvironment.htm
see also witiger.com/internationalbusiness/politicalrisk.htm
see also witiger.com/internationalbusiness/politicalriskcontingencyplanning.htm
see
also witiger.com/internationalbusiness/politicalriskdefensiveintegrative.htm
see
also witiger.com/internationalbusiness/personalrisk.htm
see also
witiger.com/internationalbusiness/6environments.htm
 |
this unit is
in the text
"Current Issues in Marketing in the Information Age, 2nd. Edition" on page 7 - 11 |
 |
this unit is
in the text
"International Business Management" on page 63 - 78 |
| . | This page
used in the following courses taught by Prof. Richardson
.
|
| LEARNING
OBJECTIVES |
The objectives
for this unit are to help the reader understand
o the role
played by each of the 6 environments in business
When the reader has completed this unit it would expected that they could read information about a marketing, business or international business situation and analyze this in terms of what environments are involved and how they exerted influence WTGR |
| INTRODUCTION | The
Political / Legal / Regulatory Environment can be simply described as the
laws and regulations that business has to follow in order to make sure
the business owners do not get arrested, or have the business fined for
noncompliance of some regulation.
Laws are made by politicians - who enact these laws based on the likelihood they will get re-elected. The political environment is affected and effected by politicians who in turn are influenced by changes and challenges in the social - cultural enviromment (languages, ethnicity, immigration etc.), challenges in the economic enviromment (currency exchange rates, corporate activity, unemployment rates) and also to some extent the geographic environment in terms of how the region is laid out, rivers, mountains, proximity to other countries, weather, seasons etc. |
| Political
/
Legal / Regulatory |
The Political
/ Legal / Regulatory environment is often a direct consequence
of the political parties in power, which represents the popular opinion
of the citizens of the region. If the citizens are, for example, pro-Big
Business then probably taxation will be modest and there will not be a
lot of stringent rules about environmental considerations.If the citizens
are very concerned about safety issues, for example, then there will
be a lot of rules and regulations governing things such as transportation
safety, which will make it more expensive for some companies that have
big shipping costs.
The rules and regulations created by the politicians, have significant influence on the cost of running a business and the way it can market products and services - for example in Canada there are severe regulations about advertising for alcohol and tobacco. |
| Political / Legal / Regulatory Environment |
Prof. Mintz's article discusses the effect of U.S. regulations in the financial services industry - specifically securities, and how these regulations will effect the way Canadian companies have to operate when they do business in the U.S. |
| Mintz explains "A large
share of corporate Canada, measured by market capitalization, must comply
with new US securities rules, since it has been economically better
to raise capital in New York than in Toronto. Complying at the same time
with 10 provincial and three territorial regulators seems to be a rather
costly and unnecessary exercise, when the 180 or so companies that do that
need only one regulator....The cost of complying with provincial regulations
is quite substantial for medium-sized and small businesses. "
So Canadian companies are burdened by having to comply with U.S. regulations, at the same time as meeting Canadian federal and provincial regulations. permission to quote from Canadian Business magazine given by Scott Steele, Executive Editor. Prof. Richardson has written several e-commerce and international business articles for Canadian Business magazine over the years. |
| Political
Environment - how it effects the Technological Environment
|
Political Environment
- how it effects the Technological Environment
"Chinese Policies Push Some U.S. Tech Companies Out" Kessler says "Chinese government policies that favor Chinese companies over foreign firms are driving some U.S. tech companies from the booming market. This month, chipmakers Intel and Broadcom said they'll stop selling wireless Internet, or Wi-Fi, chips in China. A new law requires that the chips include a security technology licensed by Chinese companies." |
| Semiconductor taxes. "China slaps a 17% value-added tax on computer chips sold there. But it gives rebates of up to 14% to domestic chip plants. That makes it almost impossible for foreign chipmakers to compete, the SIA says. This month, the U.S. trade office filed a case against China's semiconductor tax with the World Trade Organization, which China joined in 2001. China must abide by the WTO's decision or risk censure.". |
| Political Environment - how it effects the Technological Environment | Political Environment
- how it effects the Technological Environment
Bruce Meyerson of ecommercetimes.com explains "one state-controlled company is angling to get a few months head start on another state-run company by playing on the name recognition of BlackBerry. On one level, this might sound impressive since the two rivals appear to be competing as you'd hope they would in a free market. But the obvious infringement on BlackBerry's trademark is so sophomoric that no company would bother trying it anywhere but in a nation with dubious legal protections." |
| What does RIM say? - Meyerson
says "well, they are hoping to make gazillions with their joint venture
with China Mobile and are hesitant to accuse the Chinese government of
being complicit of allowing this other Chinese company to be so blatant
in infringing on their product.
RIM may still end making some money - even if it gets ripped off by Redberry (because the Chinese market is so large they think they can still obtain a decent ROI) - but this situation sends a bad message to any other hi-tech company thinking about doing business in China. In a press release, China Unicom says standard five-megabyte e-mail account at RedBerry will cost less than a dollar a month, plus a few cents for each e-mail sent. A typical BlackBerry account in Hong Kong costs up to $64 (U.S.) per month." $1
Redberry versus $64 Blackberry
- I'd say that is a pretty good example of predatory pricing.
|
| Political Environment - how it effects the Technological Environment | Political Environment
- how it effects the Technological Environment
|
| Political Environment - how it effects the Technological Environment | .
|
| Political Environment - how it effects the Technological Environment | Political Environment
- how it effects the Technological Environment
Toronto Star ran an Associated
Press story 2005 Jan 25th about how
|
| Political
Environment - how it effects the Economic
Environment |
Political Environment
- how it effects the Economic Environment & Jobs
The U.S. has created new regulations about fuel efficiency requirements for cars. This has had an effect on Canadian auto assemblers. The rear-wheel drive Chevy Impala, which is made at the G.M. plant in Oshawa, and used as a police car in Canada and the U.S., is being dropped by G.M. in Oshawa and produced in the U.S. because it was reported that rear wheel drive cars produced at the G.M. plant in Oshawa cannot meet the "miles per gallon" requirements of the new U.S. regulations. This situation serves as a very good example of how political regulatory changes in the U.S. can have a direct effect on business in Canada. |
| Political
Environment - how it effects the Economic
Environment |
Political Environment
- how regulations effect small businesses
as discussed on 640AM radio A owner of a small bar/restuarant had a problem were a customer kept going outside the bar to smoke his "weed" on the sidewalk, and this bothered other customers. When the owner asked the man to move away he said he had a government issued card allowing him to smoke medicial marijuana. The bar owner said that may be legal but it doesn't mean you can smoke it outside the door to my bar, and bother all my customers coming and going. The smoker said "you can't stop me" and he threatened to file "discrimination" with the Ontario Human Rights Commission Incredibly,
in a moment of "political correctness", the Human Rights Commission"
http://www.ohrc.on.ca/ agreed to hear
the case, AND paid for a lawyer to represent the smoker. This forced the
small business owner to hire a lawyer to defend himself and he has (by
1st week of Feb 2008) spent more than $100,000 on lawyers fees and expert
witnesses to "defend" himself against this discrimination charge.
|
| Political
Environment - how it effects the Economic
Environment |
Political Environment
- how regulations effect small businesses
2008 May 13 UPDATE
|
| Political
Environment - how it effects the Economic
Environment |
Political Environment
- how it effects the Economic Environment & Jobs
Apparently the Alberta government is considering a recommendation to boost royalties and implement a new tar-sands tax. "Higher royalties may prompt the cancellation of $28 billion in oil-sands projects from 2008 to 2015, the brokerage said, resulting in the loss of an estimated 11,000 direct and indirect jobs, while reduced drilling would eliminate about 8,100 jobs on oil rigs." |
| Political
Environment - how it effects the Economic
Environment |
Political Environment
- how it effects the Economic Environment
|
New government legislation
[2006] by the provincial Liberal gov't is going to outlaw such advertising.
The Korean businessmen are also protesting the increased taxes on cigarettes,
which they say is causing more people to rob stores and the increased violence
is frightening for many store owners.
"The McGuinty government has repeatedly raised tobacco taxes without understanding the effect it has on safety in our stores," said Sonny Cho, spokesperson for the Ontario Korean Businessmen's Association.So, a combination of restrictive advertising regulations and tax regulations is making it difficult for these business people to conduct their business in an economical way. |
| Political
Environment
Canadian
|
Political Environment
- how Canadian government red tape effects international business situations
|
| Red
Tape |
Hasselback says "Permits to operate uranium mines and mills are granted by the Canadian Nuclear Safety Commission. Mr. Farmer [Denison's CEO ] said he doesn't mean to knock the commission for the lengthy approval process. The problem, he said, is that the commission is under staffed, so it takes too long to complete reviews. Other jurisdictions, such as Kazakhstan and Namibia, have processed operating permits much faster." |
| Political
Environment
Canadian
|
Political Environment
- how Canadian government red tape effects Management positions
Reuters
journalist Mark McSherry wrote a piece in Jan 2007 discussing the pressures
causing CFO's to quit
McSherry wries "Experts say turnover of CFOs has increased and tenure has shortened as incumbents struggle with a multitude of issues that include mounting regulation and the demands of investors, boards and chief executives. Some argue that many CFOs are being asked to perform in at least two different arenas — compliance and strategy" “The government regulations like Sarbanes-Oxley and unrelenting pressures from CEOs and boards are making life miserable for many CFOs” says McSherry quoting a headhunter. |
| Political
Environment
U.S.
|
Political Environment
- how U.S. government red tape effects Canadian businesses
Sarbanes-Oxley - 2002
Wikipedia explains "These scandals resulted in a decline of public trust in accounting and reporting practices...The legislation is wide ranging and establishes new or enhanced standards for all U.S. public company boards, management, and public accounting firms." WTGR adds, the reason this has an effect on Canadian companies involved in international business and e-commerce is simply due to the fact that many medium and large sized Canadian companies operate in the U.S. and therefore when they do their "financials" at the end of the year, their accountants have to abide by the reporting requirements of the Sarbanes-Oxley legislation. see http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act proper name: Public Company Accounting Reform and Investor Protection Act of 2002, Named after sponsors Senator Paul Sarbanes (D-Md.) and Representative Michael G. Oxley (R-Oh) |
| Political
Environment
U.S.
|
Political Environment
- how U.S. government red tape effects Canadian businesses
Sarbanes-Oxley - 2002 One of the big reasons why large Canadian companies need to comply with the Public Company Accounting Reform and Investor Protection Act is that they must comply with these regulations as part of being a public company operating in the U.S. What do we mean by being
"public"?
Why would you want to be a public company in the U.S.? - cause they have 300 million people who can invest in your company and we have just 30 million - therefore (simplistically expressed) you can raise more money from stockholders in the U.S. than in Canada. |
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