Regulatory Frameworks Affecting Procter And Gamble In Australia Essay.

1. Identify a multinational company (MNC) operating in Australia. Provide a brief description of the company including the following:
The industry the company operates in
Number of staff in Australia 
Number of staff globally 
Location of global headquarters
2. Identify any legislative regulatory framework/s affecting the MNC you have identified operating in Australia and discuss why and how it affects the company. For example, multinational corporations, like local companies, are subject to 30 per cent corporate tax.
3. Identify any treaties, conventions or agreements that have impacted on the products or services that your chosen MNC provides in Australia. How does it impact the provision of these products and services?

Procter and Gamble is a multi-national company that deals with consumer goods. The company offers Skin as well as personal care products under different brands such as Olay, Safeguard, and Old spice among others. Formed back in 1837 by a British American business man called William Procter and an Irish American business man called James Gamble (Azman, Baharumshah, Law, 2010 p.67).They believed in the dream they had of wanting to find small yet meaningful ways of changing and improving people’s lives. , and formed this company, it started as a very Procter and Gamble company has invested so much in human resources, they believe that one of the reasons that they have made it so far is because of their well trained staff and personnel. By 2017, a report showed that Procter and Gamble had a total of 95 thousand employees worldwide and in Australia they had 157 employees (Beamish, 2013 p.75).The global headquarters of Procter and Gamble are located in downtown Cincinnati, Ohio in America.

There are certain legislative and regulatory frameworks that affect all multi-national companies operating in Australia. The Australian government recognizes the need for a regulatory framework that will keep pace and act as a watch dog to all Multi-national companies operating in Australia. Procter & Gamble being a multi-national company based in Australia is affected by some of these regulatory frameworks (Boddewyn, 2015 p.65)

Below is a discussion on some of the legislative frameworks that affect Procter & Gamble Company.

Exchange rate controls in Australia have been abolished. The major bank in Australia; the reserve bank of Australia took the initiative of suspending almost all of the foreign exchange programs in Australia (Briscoe,Tarique,Schuler,2012 p.42).This has really affected Procter & Gamble Company and its operations. Exchange rate needs to be controlled, when they are controlled then they can result to some serious financial and economic consequences. Despite the many sales that Procter & Gamble company are making from the sale of its consumer goods, the profit that they are making would not match the one they would make if the government of Australia had decided to control the exchange rates.

The other regulation framework that affects Procter & Gamble Company is the Australia’s corporate tax rate of 30%. When compared to other economies, this tax rate is very competitive and even way much higher (Brownlie & Crawford,2012 p.213).A lot of money is deducted as tax out of the total money that the company makes from the sales of its various types of consumer goods. This has made Procter & Gamble Company not to make any considerable amount of profit. This corporate tax rate is very high. Australia is does not have a well-developed economy, the 30% corporate tax rate is therefore overrated, countries with developed economies such as Japan, Chin, United States, France, Germany among others are some of the countries that can impose the 30% corporate tax rate.

Legislative Frameworks Affecting Procter and Gamble

Australia is among one of the countries in the world that has a very strong but enduring traditional democracy. Australia is a country that the rule of law and the entire necessary regulatory framework prevails (Dabbah, 2010 p.342).For instance Procter & Gamble Company has to fully abide by the Foreign Corrupt Practices Act compliance program. The company signs and commits not to engage in any corrupt and unwanted dealings in Australia. Failure to the compliance with this program then the appropriate action will be taken against the company. In the case where the authorities in charge get to know or get some piece of tangible evidence that the company is engaging is corrupt dealings, then all its operations would be shut down and the appropriate action taken which will first be determined by carrying out an investigation to determine the credibility of the provided information.

The legal system that exists in Australia is very different from the one that is America. In Australia the legal system is totally not under any circumstance immune to political pressure when situations have arisen and one is trying as much as possible to resolve business disputes and misunderstandings that might have occurred as a result of different reasons. This is among one of the factors that greatly affects Procter & Gamble Company (Buckley & Casson, 2016 p.90).

Government’s subsidies, anti-dumping rules in Australia greatly affect the overall operations of Procter & Gamble Company. In Australia there are certain rules regarding damping and disposal of wastes. Procter & Gamble Company therefore have to adhere to these rules. A violation of any of these rules or a section of these rules will result to serious consequences. The issue of countervailing and some serious trade remedies. These rules must follow to the later by the company.

Apart from the Australian government, there is the World Trade Organization that is specially formed and designed to enhance various trade opportunities to multi-national companies such as Procter & Gamble (Buckley & Casson, 2016 p.150).This organization has some effect on the operations of multi-national company. It is tasked with the activity of monitoring international trade. It has the ability of influencing some very crucial terms of trade that can be implemented in a certain country. It does not have total control, it just have an ability to influence the direction that the laws and regulations will take. Being under the surveillance and also guidance of the World Trade organization, Procter & Gamble companies operations are tied. They have to abide the some of the rules and regulations that the body sets. Failure to abiding by these rules and regulations then there would be some serious consequences such as the denial of trading rights in certain countries.

Exchange Rate Controls

Respect for human life. Being a multi-national company, Procter & Gamble has the task to ensure that it understands the rights of citizens in all the various companies it has branches in. In Australia, there are totally different laws regarding human right compared to United States. (Dolzer & Schreuer, 2012 p.213).This issue has really affected Procter & Gamble Company. Instead of spending their time doing some valuable staff that can be beneficial to the company, it has to spare some of this time and try to understand the rights of this company so that they can avoid violating any of its employee’s rights.

Finally, public policy abroad is very different, not just being different, there are certain countries abroad that are very keen and observant in ensuring that their public policies are not looked down upon.

3. Treaties, conventions or agreements in the company.

Generally the business environment is surrounded by the agreements (Dunning, 2013 p.50). In Procter and Gamble Company most of its operation in different countries is controlled by the agreements. These agreements are formulated in order to ensure the company obeys to the rules and regulations which assists in achieving the company’s goals and objectives. Treaties are mostly written documents which describes what the company will be doing in the market and how the workings of the company should abide to the rules and regulations of the country. The Procter and Gamble Limited Company is involved with various treaties. Most of these treaties regulates the function of the company in the market. Also treaties safeguards the properties of an organization in market (Dunning, 2013 p.100). Treaties vary depending on legal agreement of the business and also the laws of a certain country. Procter and Gamble limited company has been involved in agreements such as;

This is an agreement that the company has signed to regulate competition in the market. The treaty is signed by the companies in the market to prohibit the individuals or other companies from manufacturing goods of similar type (Johnson & Turner,2010 p.200).It is the agreement that ensures no monopoly in business. Procter and Gambler Company indulges in this agreement so as to prevent new companies from coming with an idea of designing similar products. Therefore each company is required to offer unique products to the marketplace.

Formation treaties.

It is the agreement based on the aspect of performance and formation. When the company is investing in new areas then it required to sign the formation document (Ruigrok & Van, 2013 p.50).The Procter and Gambler Company adheres and pledges to abide in this agreement. Also this agreement requires the company to meet its obligation. This is to mean that if the agrees to provide a product to the customer then it must supply the goods without delay and following the terms agreed.

Corporate Tax Rate

Competency and mutuality agreements.

In business all parties should enter in an agreement which includes legal capacity to run a business. The company agrees not to take advantages over the minorities in the country. On part of mutuality agreement the company agrees to perform its duties following the apt measures. This mutuality agreement demands cancellation of contract if either one party that is the company and the USA government disobeys terms and conditions agreed when signing.

Offer and consideration agreements.

Based on the offer Procter and Gamble company agrees to provide consumer goods to the USA market with the exchange of money (Ruigrok & Van, 2013 p.80).The company provides goods to the USA government then in exchange it gets money as agreed .On aspect of acceptance it shows that both the USA government and company agrees to offer the presented terms when performing the duties .This is based on the contract signed between the USA and the Procter and Gamble limited Company.

Effects of the treaties to provision of goods and services in the company.

Basically agreements in business are important. Procter and Gambler limited company participates in agreements so as to ensure there is uniformity and security when selling consumer goods in the market (Schaffer,Agusti,Dhooge,Earle,2011 p.54).Agreements helps Procter and Gambler Company in the following ways;

Agreements helps the company in fixing the cost of the resources. This is an agreement which regulates on how the company agrees to sell the resources to other countries. The company signs contacts which helps to sell goods for a specific price at a certain time in the market.

Treaties serves as a proof for a details when selling products (Shenkar,Luo,Chi,2014 p.45).When the Procter and Gambler Company signs an agreement with another country then it means that the company has been given the mandate to sell goods to the customers. By this the company will be able secure huge profits from the market. Company is required to present the document in case of future crisis.

Agreements helps to prevent misunderstanding that may arise .This majorly needs the company to go through the terms and conditions contained in the written document signed during the agreement. Company will understand where to operate and which products it is required to offer. By this the Procter and Gambler company is able to operate only on the legal business and therefore escaping penalties that may be incurred when it negating from the laws.

Compliance with Foreign Corrupt Practices Act

Treaties helps the company to avoid huge expenses when selling goods to the customer (Sornarajah, 2017 p.43). Agreements serves as a reminder that’s the company is protected from operating on other business which did not sign fro during an agreement. This helps companies in selling products since there is only one line of production.

Agreements helps to reduce competition in market. The company by agreeing to terms of non-compete agreements, it is able to incur huge profits from the market since no other companies which offer same goods.

Agreements helps in ensuring there is effectiveness and efficiency in the company. The vision of the Procter and Gamble Company is to ensure that there are no delays and every customer in the market is served well (Subedi, 2016 p.90). Agreements starts within the company whereby workers abides to laws and therefore ensuring there is responsibility and accountability when producing goods. This reduces delays in the company hence leading to customer satisfaction in market.

Conclusion.

International trade is controlled by rules and regulation. The company adheres to agreements so as to ensure there is no issues of illegal business in the market. Each agreement and law is adhered by every party in the business (Wagner,2012 p.89).The core part in international trade is on how enterprises are exercising what they have pledged for during formation. Laws and agreements are there in business to ensure companies operates with the stipulated procedures. This promotes fairness in the economy and therefore eradicating illegal businesses in the economy. Also, agreement targets to reduce competition in the market. This mostly hinders companies to produce similar goods thus ensuring uniqueness in the marketplace. 

References.

Azman-Saini, W.N.W., Baharumshah, A.Z. and Law, S.H., 2010. Foreign direct investment, economic freedom and economic growth: International evidence. Economic Modelling, 27(5), pp.1079-1089.

Beamish, P., 2013. Multinational joint ventures in developing countries (RLE international business). Routledge.

Boddewyn, J.J., 2015. Political aspects of MNE theory. In The Eclectic Paradigm (pp. 85-110). Palgrave Macmillan, London.

Briscoe, D., Tarique, I. and Schuler, R., 2012. International human resource management: Policies and practices for multinational enterprises. Routledge.

Brownlie, I. and Crawford, J., 2012. Brownlie's principles of public international law. Oxford University Press.

Buckley, P.J. and Casson, M., 2016. The future of the multinational enterprise. Springer.

Dabbah, M.M., 2010. International and comparative competition law. Cambridge University Press.

Dolzer, R. and Schreuer, C., 2012. Principles of international investment law. Oxford University Press.

Dunning, J.H., 2013. International Production and the Multinational Enterprise (RLE International Business). Routledge.

Johnson, D. and Turner, C., 2010. International Business: Themes and issues in the modern global economy. Routledge.

Ruigrok, W. and Van Tulder, R., 2013. The logic of international restructuring: The management of dependencies in rival industrial complexes. Routledge.

Schaffer, R., Agusti, F., Dhooge, L.J. and Earle, B., 2011. International business law and its environment. Cengage Learning.

Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.

Sornarajah, M., 2017. The international law on foreign investment. Cambridge University Press.

Subedi, S.P., 2016. International investment law: reconciling policy and principle. Bloomsbury Publishing.

Wagner, J., 2012. International trade and firm performance: a survey of empirical studies since 2006. Review of World Economics, 148(2), pp.235-267.