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
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.
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?)
Legislative Regulatory Reforms affecting NTT
The industry in which the company operates: Nippon Telegraph and Telephone was established in the year 1952 as a government company, but in the year 1985, the company turned into a private company. The company since its inception operates in the telecommunications industry.
Number of staff the company has in Australia: The organization started its operations in Australia from 1997 and since then it has given employment opportunities to more than 200 people in Australia. The country headquarter is in Sydney, New South Wales (Linkedin , 2018).
Number of staff the company has globally: The Company since its inception has spread its wings across the globe and has contributed towards employment generation. The company has provided employment opportunities to nearly 274,844 employees across the globe (NTT, 2017).
Location of the company’s global headquarters: The global headquarter of the company is located at Otemachi, Chiyoda, Tokyo, Japan (NTT, 2017).
Every country has its own legislative regulatory framework in order to practice control over the activities of the local as well as international businesses running within the country’s boundary. The main aim behind the development of these regulations is to make sure that fair competition is practiced in the market and necessary protection is enjoyed by the companies in order to safeguard the integrity of the market. The Australian Government as well as other Government agencies and institutions have developed such legislative regulatory frameworks in order to govern and regulate the Australian market (Australian Government, 2018). The Australian market has a national level statutory framework which is designed in order to make sure that fair business is practiced in the market and the consumers’ rights are protected. This framework is enforced by the Australian Competition and Consumer Commission (ACCC) (Australian Government, 2018). It is very important that domestic laws impose adequate restrictions as well as duties on Multinational Corporations undertaking business in Australia in order to safeguard the rights of the domestic businesses as well as the consumers. The major laws that have an impact on working of multinational corporations in a specific company include privacy laws, environmental laws, consumer laws as well as property laws (Kinley & Joseph, 2002). The regulations of a country over the telecommunications industry will govern the prices offered by a company to the consumers for their services used. In the year 1997, the Australian Government adopted a major regulatory reform in order to boost the telecommunications industry of the country. The Telecommunications Act of 1997 introduced open competition in the telecommunication industry and as a result the multinational companies undertaking telecommunication activities started to invest in the Australian market. The Australian government came up with country specific reforms in order to protect the domestic market along with the consumer rights and also make sure that fair completion is practiced in the Australian market. Nippon Telegraph and Telephone is a Japanese based multinational corporation. The Australian government in order to regulate the MNCs coming from Japan came up with regulatory reforms in 1985, according to which the multinational corporations were allowed to compete in the domestic as well as international market but they were not allowed to compete with each other.
Impact of the legislative regulatory frameworks
In the year 1998 the Australian government adopted new reforms in the telecommunications industry. In this reform, new interconnection requirements were introduced for multinational corporations according to which Type I network operators were obliged to interconnect and access was allowed to be offered at wholesale rates along with asking authorised interconnection agreements to be made public. The designated carriers like Nippon Telegraph and Telephone (NTT) were required to interconnect as well as provide interconnection at technical points that were feasible. The tariffs applied were subject to cost and they were required to be submitted annually to the concerned Minister in order to get approval. The Australian Government also declared that essential facilities were supposed to be provided to other carriers on an equal basis as the designated carriers like NTT provides to themselves. The MNCs were also subject to separate accounting requirements (AusInfo, 1999). Australian Communications and Media Authority (ACMA) also playa a very important role in framing the regulatory norms for the carriers as well as service providers. National Broadband Network Companies Act 2011 and the Telecommunications Legislation Amendment (national Broadband Network Measures - Access Arrangements) Act 2011 are the latest regulatory reforms adopted by the Australian Government that govern the telecommunications industry within the country (Dlapiper, 2016).
The tax regime of the country is similar for domestic as well as MNCs in the country, as the country has adopted similar taxation laws for domestic as well as international companies undertaking business within Australian boundaries. The companies working in Australia have to pay corporate tax which is 30 per cent (PwC, 2014). Australia is an active participant of World Trade Organization (WTO) and hence has taken many initiatives in order to enhance the productivity as well as competitiveness of the Australian market. As a result the country has tried to stay liberal towards international organizations entering into the Australian market for trading and business purposes (OECD, 2010). According to the World Bank, Australia ranks 14th in the list of Ease of Doing Business 2018 which is quiet a strong position and reflects that the regulations and norms of the country are open for international corporations to undertake business activities in the country (World Bank, 2018). On the basis of economies with more than 20 million population, Australia ranks 4th globally in the ease of doing business. So, this reflects that the regulatory framework of the country is in favour and support of multinational corporations (Australian Government, 2018).
Treaties, Conventions and Agreements impacting the products or services offered by NTT in Australia
The main impact of the regulation of the Australian Government can be seen directly on the advancement of domestic companies of the country, as they will benefit from the multinational corporations because of the law being practiced in the country. The law related to the cost of the services offered helped in protecting the rights of the consumers as the multinational corporations were not allowed to charge according to them and they were supposed to charge wholesale rates only. These regulatory reforms have the ability to protect the Australian market in the long run and safeguard the interest of the consumers of the country (AusInfo, 1999).
Many treaties and agreements also have a direct or indirect impact on the working of multinational corporations within a specific country. Every country today enters into some or the other bilateral or multilateral agreements with other countries in order to boost their trade as well as to increase the competitiveness of their market. Nippon Telegraph and Telephone Japan Communications is a Japan based Multinational Corporation so the agreements and treaties signed between the two countries will have an impact on the working as well as products and services offered by the company in the Australian market. Japan and Australia have entered into a partnership agreement under the name of Japan –Australia Economic Partnership Agreement (JAEPA). The strategic agreement aims to boost two-way investment within both the countries. This agreement is considered to be the most liberalized agreement signed by the Japanese Government (Australian Government, 2018). On the basis of this agreement it can be inferred that the domestic telecommunication providers will benefit and will be able to survive in the market because of the non discriminatory treatment commitment by the MNCs in the country (Pash, 2014). It has also been guaranteed that any advancement in the telecommunication services in Japan will also be reflected in the Australian market. Transparency in the activities of the company is also imposed through this agreement along with fair as well as reasonable access towards the telecommunication services and networks. Safeguarding the competitiveness of the domestic market is also ensured through this agreement. Reviewing of regulatory decisions, ease in licensing, and increased transparency are the major highlights of this agreement (Australian Government, 2018).
Free trade agreements have the ability to boost as well as promote the trading of goods and services at the global level. It has been seen that the Asia Pacific region is growing at a rapid pace because of the free trade agreements taking place across the globe (Zhang, 2010). Because of the free trade agreements entered by the Australian Government, the Australian market is open for global competition and the Australian domestic companies are free to trade at global levels and the foreign companies are able to invest as well as undertake business activities within the Australian boundary (Capling, 2008). Because of the Free trade agreement between Australia and Japan, the Japanese MNCs undertaking business within the Australian boundary have been able to enjoy great freedom and as a result NTT is able to offer high quality products and services to the citizens of the country. Any advancement taking place in the telecommunication industry of Japan is also reflected in the Australian telecommunication industry because of the active participation of Nippon Telegraph and Telephone in the Australian market. The agreement has the ability to boost the growth as well as economic development of both countries. Because of the free trade agreement between the two countries the parent organization has been able to launch many new services in the Australian market like information and communication technology solutions, consultancy services, security as well as cloud services, etc. which has helped to optimize as well as develop the information and communication technology of the country and has also offered a wide range of options of services to the citizens of the country (NTT Communications ICT Solutions, 2018). Free trade agreements have the ability to improve the flow of services at an international level. Telecommunication services are able to bring faster growth within an economy and hence major emphasis is given towards the development of telecommunication as well as its infrastructural development within any country. The communication services, data services as well as IP services of the country have been improved to a great extent because of the operations of NTT within the Australian boundary. The strategic objectives of the policies of the company aim to improve the telecommunication services of the country by providing world class services at affordable rates to the citizens of Australia. Other services provided by the company have the ability to serve the purpose of real world with the help of a dedicated team that aims to boost the telecommunication sector of the country. Because of the free trade agreements between Australia and Japan the telecommunication industry of Australia has become more liberal and as a result innovations are invited within the telecommunication sector of the country.
Global openness has offered the country to adopt the best technological advancements taking place across the globe and adopt them within the Australian market which will take the country a step ahead at a global level (Case Western Reserve University, 1990). Hence, it can be said that the agreements as well as the openness with the global market helps the country to grow and develop at a rapid pace and according to the global standards. The World Trade Organization plays a major role in this and hence has come up with many rounds and agreements that have the ability to help many countries develop rapidly with the global pace. Telecommunication is a major sector of every economy and in order to grow and develop it, it is very important to boost the telecommunication sector of the country. Australia along with many other countries has allowed 100 per cent foreign direct investment in the field of telecommunication. This is so because no country is self sufficient and in order to grow it is important to liberalize the economy and allow the economy to adopt the innovations taking place globally. Hence, it can be said that the concept of free trade agreement has benefited the Australian market through many aspects.
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