Free Essay

Global Regulations

In: Business and Management

Submitted By farudalonto
Words 924
Pages 4
Alonto, Faruddin
MGMT 460.99 - IBM

July 12, 2016
Government Policies, Development, and IBM

Globalization continues to open gates of opportunities for most countries. In my opinion, this is gearing towards lessening the gap between the classifications of the country’s global economic status. This reality encourages more and more businesses to expand to other markets where they see would generally increase their profits and revenues. After all, most people do business with one mindset: minimize cost, and increase/maximize the profit.
Risks from Foreign Government Policies
It is generally true for a fact that most businesses’ next step is to expand to other markets to increase profits. However, expanding to other markets is not as easy as it sounds. There are many risks that affect decisions of businesses to invest in a foreign country. The greatest risk international businesses face is government regulation
(Deresky, 2014). Businesses have to follow foreign government policies before they can start doing international business. Although following government policies may sound as easy as checking boxes, foreign government policies tend to change, either favorable for international business or not. For example, countries that have democracy as their political system change government administrations and possibly the policies, every once in a while.
Government policies and regulations usually are not just two sides of a coin.
There can be many possible government policies that can be implemented that can also lead to many possible countermeasures for an international business. This makes the risk so high on the list, according to Deresky (2014). A clear example is the recent exit of Britain from the European Union (EU), or more famously known as the Brexit. Most businesses did not expect the sudden leaving of Britain from the EU. As an effect of
Brexit to other countries like USA where the two are huge trading partners, the stock market of the latter significantly dropped with Dow Jones industrial average dropping almost 4% (Mui, 2016). This is something of a risk for them brought upon by the government decision.
Still, the government regulations have the absolute decision to trade and business policies, even with external events like acts of nature or terrorism. Take Japan for example. A huge earthquake hit Japan on 2011 that devastated most businesses.

Alonto, Faruddin
MGMT 460.99 - IBM

July 12, 2016
Government Policies, Development, and IBM

The first instinct of government is to implement a policy that will guide everyone and prevent panic from people. Because of this all, including international businesses, will follow certain restrictions. Limited use of electricity and water and releasing oil reserves are among the few regulations and policies that were implemented by the government following the 2011 earthquake (Law of Library of Congress, 2013). 9/11 attacks on the
World Trade Center last 2001 is also an unforeseen event that took a toll on businesses, both local and international. Significant decrease in the stock market and federal reserves, and volatility of currency hurt the businesses (Neely, 2004). It may be inferred that some wanted to pullout their international business from the USA. There was also increase in tax to compensate for war preparations should it happen. Of course, even international businesses are to pay these taxes as part of operating in the
USA (Blimes, 2011). This just increases the cost for them in doing international business. Developing Countries
Most developing countries are dependent on their huge trading partners, like
China, Japan, USA, and Britain to name a few. An event whether external or internally caused and followed by a government mandated policy will have an effect on their trading countries, even international businesses established there.







countries, cannot afford to ignore the probability of changes in government policies.
Managing these risks may not be easy as it especially if for instance, international is doing so well but due to some event with government policy leave them no choice but to withdraw their investments. It can also be the other way around with business not doing so well and forced by the government to stay and spend a huge amount of money.
Ultimately, whatever may happen to a country, the government will be ready with a response of to avoid confusion and provide guidance to everyone. Managing countermeasures for instances like this is difficult. This is why, as shown in Deresky’s work, the greatest risk to FDI decisions is government regulation.

Alonto, Faruddin
MGMT 460.99 - IBM

July 12, 2016
Government Policies, Development, and IBM


Deresky, H. (2014). International Management: Managing Across Borders and Cultures
(Eighth Edition). New York: Pearson Education Limited.

Mui, Y. (2016, June 24). Dow drops more than 600 points as Brexit raises risk of global recession. Retrieved

Law of Library of Congress. (2013, September). Japan: Legal Responses to the Great
East Japan Earthquake of 2011. Retrieved July 10, 2016, from Library of Congress: Neely, C. (2004, Mar/Apr). The Federal Reserve Responds to Crises: September 11th
Was Not the First . Federal Reserve Bank of St. Louis .

Blimes, L. (2011, September 5). The Economic Fallout from 9/11. Retrieved July 10,
2016, from Power & Policy | A blog about the use of American power in the world, written by scholars at the Harvard Kennedy School's Belfer Center for Science and
International Affairs:

Similar Documents

Free Essay


...the possibility to take part in global-business operations by means of Internet. The main trick is not even to start operating in global-business, but to gain the maximum possible benefit from these international business operations. Globalization efforts are strongly influenced by technology and this has to be on count, too. One of the main suggestions for a an entrepreneur interested in launching a global business effort would be in the first place a deep analysis and understanding of the algorithm of the market’s functioning. IT management is also of a great importance and widely used by various companies in order to control spending and take advantage of volume purchases, share best practices among dispersed locations, and keep tabs on IT assets and regulatory compliance. Most of the global-business operations of companies are focused on business-to-business customers rather than ordinary consumers and that also gives certain opportunities. Though this is a choice that the head of the company makes from the very beginning. Another way to take maximum benefits from the global-business operations is using technologies. Internet web sites are not the only technological way to achieve, many entrepreneurs forget about currency-conversion software, online customs-forms processing, language-translation software, and tariff-calculation/global shipping-cost calculation software and many more. Conclusion: When we speak of the costs of "regulations", in reality, we...

Words: 479 - Pages: 2

Free Essay


...Literature Review The literature that will follow will include the reasons for the global financial crisis and what steps the government is taking to overcome or recover from the crisis. One of the main reasons emphasized in the following text for the crisis is lack of effective regulations. Moreover the most important financial alteration that various committee’s around the world are taking is strengthening the regulatory requirements on the financial institutions. Hereafter it could be settled that government intervention could have played a huge role in avoiding the crisis. Many countries around the world have to decide whether to regulate or not to regulate their accounting standards. Supporters of regulation usually state that the free market notion states that accounting information is like an economic good so it is best to leave the markets to decide what and how much information is needed. This will help achieve efficient market system, however this kind of a system exists only in theory and not in reality, and so then what is the point of a free market system when it cannot be efficient? (Y. Hong, 2007) The rewards of free market system are realized only when it is executed in isolation. But in reality, markets cannot be left completely on its own and some regulation or government intervention is required. Government intervention even at its minimum will not be able to achieve efficient markets and thus it is better to have a well regulated system. Free market......

Words: 1762 - Pages: 8

Premium Essay

Post Gfc Reforms and Regulations

...Post Crises reforms and regulations The global financial crises displayed various weaknesses in the financial system. Ever since the crises, there have been sincere efforts in trying to eliminate or reduce the chances and impact of a future crisis. Four main areas of reform were identified by the international policy makers and sufficient work has been done to implement them (The Regulatory Response to the Global Financial Crises, 2014). Although Australia has not been affected as much as the north Atlantic countries, it still operates in the global environment. A part of regulatory reforms includes managing and monitoring systemic risk. Australia has been trying to do that through various entities such as the RBA, APRA and ASIC. Australia has also implemented reforms related to derivative trading, which are being traded more and more despite their high level of risk. Even though the reforms and regulations that were and going to be implemented, improved the safety of the financial system, there will never be a one hundred percent guarantee that there will be no future crisis. The G20 summit in 2008 was different from the prior summits in that it constituted of the leaders of the countries instead of Finance Ministers and Bank Governors (RBA, 2012). The leaders agreed on four areas of reforms which are: Strengthening Prudential Regulatory Standards (Basel III), addressing too big to fail institutions, reforms to OTC derivatives market and shadow banking. The......

Words: 1206 - Pages: 5

Premium Essay


...A single set of global accounting standards, rules to be followed by any public company as it reports annual operating results, has become the Holy Grail of Accounting. In today’s world, these rules are embodied in International Financial Reporting Standards. Unfortunately for many good but unwitting people, advocating the U.S. adoption of IFRS is a fool’s errand. To more fully understand the ramifications of this statement let’s turn to the dictionary for a basic frame of reference. Grail [greyl] –noun (from Also called Holy Grail. a cup or chalice that in medieval legend was associated with unusual powers, esp. the regeneration of life and, later, Christian purity, and was much sought after by medieval knights: identified with the cup used at the Last Supper and given to Joseph of Arimathea. Informal. any greatly desired and sought-after objective; ultimate ideal or reward. Can we adapt the word’s definition to fit into the context of accounting? You beta. Holy Grail [greyl] of Accounting –noun (The Summa) Universally adopted set of global accounting standards that in modern urban legend is associated with unusual powers, esp. perfect transparency in corporate financial disclosure, universal comparability, ethical business purity, optimal investor returns, cross national and international economic stability, and is much sought after by various economists, politicians, governmental regulators, large audit firms and executives......

Words: 1210 - Pages: 5

Free Essay

Pros and Cons of Globalization

...Pros and Cons of Globalization Dianna L. James MBA607 November 22, 2014 Jeff Knott, Instructor Abstract Within this writing, we had to research the pros and cons of globalization. However, one needs to know the definition of globalization. Globalization is a process in which we trade with other countries in the stock market or imports/exports of goods and services. However, globalization is not as easy as saying the word, there are many issues that are important to know, one is the laws of any given country. Korea is a good example where they have non-flexible laws that a business that wish to produce their good though their country they need to be abided by in all sense of the word. When visiting the country you need to be well aware of the culture differences and conform to the culture of the country you are visiting. There is one basic question associated with the pros and cons that needs to be answered. “How can firms and governments help to reduce the amount of resistance that might result from its implementation” (From instructions for week one assignment)? Key Words: Trading, Country, Laws, Pros, and Cons, Globalization Pros and Cons of Globalization Within this writing, we had to research the pros and cons of globalization. However, one needs to know the definition of globalization. Globalization is a process in which we trade with other countries in the stock market or imports/exports of goods and services. However, globalization is not as......

Words: 3504 - Pages: 15

Free Essay

Business Govt Society

...CHAPTER 8: Business government relations Key learning objectives * Understanding why sometimes governments and business collaborate and other times work at arm’s length from each other * Defining public policy and the elements of the public policy process * Explaining the reasons for regulation * Knowing the major types of government regulation of business * Identifying the purpose of antitrust laws and the remedies that may be imposed * Comparing the costs and benefits of regulation for business and society * Examining the conditions that affect business in a global context Business-government relations * Government cooperates with businesses for mutually beneficial goals. * -Influenced by a nation’s values and customs differs in countries. * Their goals can range from one of cooperation to one of conflict, with various stages in between. It is constantly changing. * Companies operating globally may find governments whose legitimacy or right to be in power is questioned. * The ability of a government leader or a group of leaders to maintain political power can be influenced by businesses’ actions. (i.e boycotting economic relations with a country, or decide to withdraw operations from a country) Government’s public policy (PP) role * A plan of action undertaken by government officials to achieve some broad purpose affecting a substantial segment of a nation’s citizens. * PP inputs:......

Words: 1511 - Pages: 7

Free Essay

Financial Crisis - Ideal Outcome

...ministers by January 1, 2019. The question is, however, whether this is the right path to choose and whether these regulations will be able to prevent the world from any future financial markets crisis. So far, the proposed numbers themselves could hardly be described as tough, as the bounce in bank shares testified. Also, it seems that many important issues are not being addressed at all. (Plenty) But what are the issues that should be addressed? What would be the ideal regulatory state and is it possible to ever achieve it? Let us, first, start with our idea of the “ideal” international financial regulatory plan. After having researched various proposals for the international financial markets regulations, we reached a conclusion that finding the ideal path is going to represent a very difficult task and that none proposed regulation will be able to fit all the states. As mentioned in the article “Financial regulation: More questions than answers” which was posted in Businessline in the end of July, due to the variations in institutional legacies, traditions and systems in individual countries over the world, no one size can fit all. Also, however, we believe that as far as financial stability is concerned within any kind of arrangement that is deemed fit in a particular country, there is no need for a central bank to have a lead role. (Opinion) Any regulations will then require a dispassionate assessment of the reasons for the current system’s failure. The complicated......

Words: 2698 - Pages: 11

Premium Essay

Indian Financial Code

...Indian Financial Code Summary The Indian financial system is suffering from the problems of lack of financial inclusion, growth of unregulated shadow market, slow pace of innovation and the challenges of financial integration. It is felt that the present code of the financial sector need to be reviewed and altered, while keeping in mind the present needs of the economy. This is because most of the laws are very old, there are overlaps and inconsistencies, and there is lack of clarity in terms of regulations due to the presence of a number of regulators. It is also argued that the laws in India are traditionally evolved on a problem by problem basis. With the advent of the New Economic Policy in 1991, substantial economic liberalisation took place in India. Between 1991 and 2002, progress was made in four areas. Firstly, capital controls were substantially reduced to give Indian Firms access to foreign market. Also, a new pension system was evolved and the monopolies of the public sector in the insurance field were broken up. This led to the formation of the new Insurance regulator, Insurance regulator and Development Agency. Additionally, significant increase in the equity market as a mechanism to raise finance by firms led to the formation of the financial market regulator SEBI. Also infrastructure institutions, National stock exchange and National Security Depository were also set up. Although, these moves were taken up in the right direction but they were considered to......

Words: 1972 - Pages: 8

Premium Essay

Annotated Bibliography

...developers who care. Anderson, B. (2007). Regulating the Internet: Behavioral & Social Sciences Librarian, 26, 91-95. The Internet's breakthrough to primetime usage beginning in the mid-1990s evolved in an era of openness. Unfettered access seemed key to Internet development. An important foundation for the 1996 Telecommunications Act was the theory that the telecom industry would work best if it were free of government regulation, a guiding principle that has continued through to the current administration. However, try as the government might to avoid regulatory roadblocks, the Internet has been regulated from the beginning. Not only the government, but also nonprofit organizations and private industry have their hand in regulation. Certain regulations may involve or affect all three types of regulating entities, and within each entity there can be substantial infighting over issues. This article is primarily about government regulation, but examples of regulation from the other regulating entities are provided. It also introduces efforts at regulating at a global level, an exponentially difficult challenge. (Contains 2 notes.) Cleaver, C.A. (2011). The Internet: Clear and Present Danger? In Reid S. The Prentice Hall Essential...

Words: 422 - Pages: 2

Premium Essay

Factors Influencing Companys' International Location Decision

...advantages. The major issue is to decide for a favorable place or location for their new businesses. Due to our multicultural globus, every country has its specific regulations, markets, interrests, labor, trade zones, facilities and other factores that could affect the decision of the foreing expansion and the choice of the industry location. This paper illustrates the major factors that should influence such decisions. There are several types of observations, how to decide for a specific location for a company. This dicision depend strongly on the activities of the company, in other words with what type of business profile this company identifies itself. There are two major categories in our global observation what a company can be. The first one is the firms that have industrial backround, like goods production. Second one is companies that are based on service. This second category is not descused in this paper due to the less importance of the site selection decision, because it doesn’t matter whether the whole business process is situated at the same location. The communication technologie open the facility to be successfully performend even on different continet. In this paper I will be focused on the industrial corporates that is willing to take the decision of locating its factory somewhere in the global/international trade zones. Introduction How many factores and what factores are the key criterias that influence corporates’ international location......

Words: 3000 - Pages: 12

Premium Essay

Coke India Case

...Coca-Cola India Analysis In the Coca-Cola India case, President and CEO of Coca-Cola India (Coke India) Sanjiv Gupta is faced with this question: Should he act further on the Center for Science and Environment’s (CSE) allegations that cold drinks contain too much pesticides or should he remain silent and let the information fade from public view? Section 1: Assumptions and Stakeholder Analysis The first assumption taken in this case is Coke India is not breaking any laws and telling the truth when it comes to the level of pesticides in its products and its routine testing for chemicals. This case is not about concealing illegal activity or lying to the public, rather, it discusses the question whether or not corporations have a right to influence government to regulate various systems. If the analysis takes lying and cheating into consideration, this interesting discussion would appear convoluted. The second assumption taken in this case is the definition of “acting further” means for Coke India. Because Coke India and Pepsi already called the study “baseless” in a press conference launched independent marketing campaigns and published open letters referring to fact/myth websites, this analysis assumes acting further means more than public relations (Coke India, 12). Pepsi has already “filed a petition with the high court questioning the credibility of the CSE’s claims” and Coke India has threatened legal recourse meaning acting further means more than legal recourse......

Words: 1962 - Pages: 8

Free Essay

Financial Regulatory Reform

...many of the problems from growing out of control and threatening the stability of our financial system. Gaps and weaknesses in the management and regulation of financial firms presented challenges to our government’s ability to monitor, prevent, or address risks as they built up in the system, which caused the enormous bailouts or the massive financial collapses of financial institutions. The previous approaches to bank holding company regulation focused on protecting the subsidiary bank, not on the comprehensive regulation of the whole firm. In June, the President, proposed a new financial regulatory plan for the financial system. The new reform, as mentioned by the President, would protect consumers, impose new restraints on financial institutions and guard against the dismal practices that caused the market crisis. The new reform would generally be adopted by regulators since it mostly affects them. Timothy Geithner who is the secretary of the Treasury and Lawrence Summers who is the director of the National Economic Council wrote that “the goal is to create a more stable regulatory regime that is flexible and effective; that is able to secure the benefits of financial innovation while guarding the system against its own excess.” The proposed reform had five main objectives. They were: to promote strong supervision and regulation of financial firms, to establish a...

Words: 1721 - Pages: 7

Free Essay

Irs User Fee

...IRS User Fee 1. State the administrative agency which controls the regulation. Explain why this agency and your proposed regulation interests you. The Internal Revenue Service (IRS) controls the User Fees Relating to Enrollment and Preparer Tax Identification Numbers. This regulation is found in the Federal Register. A copy of the regulation is included as a separate .PDF document. As a tax preparer this regulation interests me. This will increase my cost of doing business. 2. Describe the proposal/change. The proposed fee for the Personal Tax Identification Number (PTIN) will increase my costs of doing business. 3. Write the public comment which you would submit to this proposal. If the proposed regulation deadline has already passed, write the comment you would have submitted. Explain briefly what you wish to accomplish with your comment. My comment is that as a tax preparer in California, I already pay tax preparer fees to the state regulatory agency, California Tax Education Council. This new fee for using a PTIN, which I have used for over ten years, will increase my cost of doing business. This cost may have to be passed on to customers in what is already a tight economy. I wish to be exempt from this new......

Words: 749 - Pages: 3

Free Essay

Mgmt 520

...State the administrative agency which controls the regulation. Explain why this agency and your proposed regulation interests you (briefly). Will this proposed regulation affect you or the business in which you are working? If so, how? In the midst of a weakened global economy cause largely by an avoidable housing crisis, financial regulations inevitably have an impact on us all. Decisions made by agencies such as the Department of Treasury, Federal Reserve, Bureau of Consumer Financial Protection, and the Federal Housing Finance Agency have the power to directly impact our daily lives much more than other agencies which is essentially the reason for my interest in such a regulation. Also, as a young American looking to own a home in the near future, this regulation has the ability to impact my ability to obtain financing. Beyond merely being a part of the American dream, home buying and the housing market is an essential part of every society’s economy. Describe the proposal/change. Nearly 4 decades after being established the Trust in Lending Act (TILA) also commonly referred to as regulation Z has undergone a number of amendments. The most current changes are to make the guidelines in which a consumer secures credit for the purchase of a home stricter. The change comes as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act which was signed into law on July 21, 2010. The act provides strict guidelines to creditors extending credit to consumers......

Words: 824 - Pages: 4

Free Essay


...Question One Self-regulation is increasingly becoming the norm in numerous industries globally. Various industries, such as health care, advertising, professional sports, and energy, have used self-regulatory processes to administer industry practices. The main motivation behind self-regulation in industries is to limit the level of government interference in the industry and also maintain consumer trust and confidence in the industry itself. One of the main goals that drive an industry to regulate itself is the sole purpose of generating profit. The players within the industry have an objective to minimize their financial costs and at the same time increase their financial benefits by attaining profits. Self-regulation may also help firms adopt ethical behavior and values since the guidelines are based on social standards and behavior of the other firms as well rather than laid down rules which are forced down upon them. This may help introduce a better level of respect and recognition of the rules and will end up in better company behavior, and escape argumentative circumstances in which companies try to look for exceptions to rules which are not implemented by the industry itself. In addition, self-regulation benefits the companies by creating a more flexible regulatory situation than is normally found with government regulation. This more flexible regulatory situation may let companies to function more efficiently and reduces any costs that would have been incurred...

Words: 1155 - Pages: 5