The Privatization of Rhône-Poulenc, 1993

1. Political: “issues affecting our international vendors could materially adversely affect our business and financial performance.”(Page 8.)

Political factor takes a significant role in identifying the reasons that can impact the growth of a company in the industry. Restrictions and political governance are in position to maintain a transparent trading and fair competition environment for the participants, such as the protection of Intellectual property and trading regulations.

P6: Describe how political, legal and social factors are impacting upon the business activities of the selected organisations and their stakeholders

One of the risks the company mentioned in its report was the risk of doing business with the U.S. Government. The company believes the

A privatized system would require a minimum contribution, but that minimum would be lower than the current tax rate. This would increase the average wage. Reviewing lessons from Great Britain can show us how a privatized system can benefit the U.S. over our current pay-as-you-go Social Security System. Partial privatization of the British national pension system began in 1959 and implemented in 1961 adding a second-tier earnings-related pension called the “graduated pension” (http://crr.bc.edu). Privatizing Social Security would also replace a higher percentage of a workers income. For example, In 1978, Great Britain replaced the “graduated pension” with the State Earnings Related Pension System. This system allowed for around twenty-five percent

Netherlands’s companies and industries should understand and study the political-legal environment since it is a critical concern of a successful global organization. As stated, Netherlands is a developing country so its government is one of those that exercise control of the businesses and trading by implementing laws and regulations (e.g. tax breaks and tariffs privileges). This could affect the products to be exported in other country/ies. To have a better and fair competition, government established antitrust laws and regulations. One of the factors that could affect the country’s industry, company and trading products are the political risks. These risks could affect the company’s capacity to do productively and profitably. This will lead

Task P6: Describe how political, legal and social factors are impacting upon the business activities of the selected organisations and their stakeholders

b) ESOP’s: Incentives that allow the employees to buy the share of the firm they are working at lower rates which creates the sense of ownership.

A registered pension plan (RPP) is an arrangement by an employer to provide pensions to retired employees in the form of periodic payments. The Income Tax Act provides deductions in respect of both employee and employer contributions.

Most important, the employees can earn stock, which gives them voice within the company to make pertinent decisions.

This is because the investors of a private company tend to focus more on profit maximisation hence costs are cut, the efficiency is augmented and word of the company’s progress is spread across the globe. Whereas, the government is not always concerned about making money, and instead, aim to do things for good publicity. (Parker, 2000) Just like the Authorities, external investors cannot have a stake in a privately-owned business either, since shares of that company are no longer available to them on the stock exchange. The market is based on what shareholders can accomplish with the companies they invest in, but it cannot be controlled by a single person or a corporation alone. It can only be pushed in a certain direction, depending on the type of market and the power it is exerted upon by the companies forming it. An extreme example of this is 2008’s Global Financial Crisis that originated from the large amount of risk-taking which the investment banks of Wall Street took during the decades leading up to it. (Savona, Kirton and Oldani, 2011) This is a case that represents the strength of corporate power over political power, as the government had little control over the investment banks during that time, and, found it hard to restore the situation back to normality. General elections can also show how weak political power is in comparison to corporate power. If the population isn’t happy with the current government, members of it can be fired

Maintaining a good relationship between business and government is important to the success every company. In this case, the South African government is important to think about because they alter how Anglo American deals with its employees, however they do not have enough power to sway the decision in their favor. The role of government is to Promote economic development and

This dissertations presents concept of political risk in the context of Efficient Market Theory (Hypothesis) and State capitalism. The paper explores the link between the three ways of insuring political risk to economic theories. Using case study of a multinational firm the political regime and its effect has been explored on business situations and how it can be managed. Political risks are the threats arising for a business due to the actions of a host government. Multinational firms in particular face political risks due to expansion of their businesses to developing countries. Author has explained and examined how political risk management has been developed in the contemporary history. A comparative analysis of concepts that deal with political risk under the contexts of prevailing ideologies; political and economic constructs has been conducted.

Evans and Richardson (2007), contend that globalized economic environment is complex and changes from time to time and this places a heavy responsibility on multinationals and other business enterprises. They are forced to adapt in order to deal with these factors for the benefit of their organizations. A company cannot ignore political issues when assessing the business environment in which it operates because it affects government policies such as licensing, regulation and taxation, which have a direct consequence on the activities of a business enterprise (Evans, & Richardson, 2007).

THE POLITICAL ENVIRONMENT: The critical concern Political environment has a very important impact on every business operation no matter what its size, its area of operation. Whether the company is domestic, national, international, large or small political factors of the country it is located in will have an impact on it. And the most crucial & unavoidable realities of international business are that both host and home governments are integral partners. Reflected in its policies and attitudes toward business are a governments idea of how best to promote the national interest, considering its own resources and political philosophy. A government control's and restricts a company's