Differences in laws and regulations from country to country are numerous and complex. These and other issues in the regulatory environment that concern multinational firms are discussed briefly here.
Countries often impose protectionist policies, such as tariffs, quotas, and other trade restrictions, to give preference to their own products and industries. The Japanese have come under much criticism for protectionism, which they use to limit imports of foreign goods while they continue exporting consumer goods (e.g., cars, electronics) on a large scale. The American auto industry continues to ask the U.S. government for protection from Japanese car imports. Calls to buy American, however, are thwarted by the difficulty of identifying cars that were truly American-made; the intricate web of car-manufacturing alliances between Japanese and American companies often makes it difficult to distinguish the maker.
A countrys tax system influences the attractiveness of investing in that country and affects the relative level of profitability for an MNC. Foreign tax credits, holidays, exemptions, depreciation allowances, and taxation of corporate profits are additional considerations the foreign investor must examine before acting. Many countries have signed tax treaties (or conventions) that define terms such as income, source, and residency and spell out what constitutes taxable activities.
The level of government involvement in the economic and regulatory environment varies a great deal among countries and has a varying impact on management practices. In Canada, the government has a significant involvement in the economy. It has a powerful role in many industries, including transportation, petrochemicals, fishing, steel, textiles, and building materials-forming partly owned or wholly owned enterprises. Wholly owned businesses are called Crown Corporations (Petro Canada, Ontario Hydro Corporation, Marystown Shipyard, Saskatchewan Telephones, and so forth), many of which are as large as the major private companies. The governments role in the Canadian economy, then, is one of both control and competition.69 Government policies, subsidies, and regulations directly affect the managers planning process, as do other major factors in the Canadian legal environment, such as the high proportion of unionized workers (30 percent). In Quebec, the law requiring official bilingualism imposes considerable operating constraints and expenses. For a foreign subsidiary, this regulation forces managers to speak both French and English and to incur the costs of language training for employees, translators, the administration of bilingual paperwork, and so on.
Other Regulatory Issues : Economic article from Global Management Catagory Other Regulatory Issues
Other Regulatory Issues Economic article from Economic Global Management.Free learning from data about Other Regulatory Issues Economic Global Management Business Management,online business management,business management classes,online business management degrees