Business-Government Trade Relations
Introduction
Since the question that needs to be resolved by examining real-world examples involves understanding whether government intervention in international business trade is harmful or helpful in businesses, picking Micromac Techno Valley Ltd. was a simple choice. The company works in the area of software and website development and that caters to the financial or banking industry in particular. Some of the products that they have designed so far are eDeal, DigiDoc, eDoc and PBMS and which cater to the banking industry in Bangladesh. Apart from this, they also design websites for a number of small businesses while also having developed Hospital and Inventory Management Systems. Some of their most affluent clientele includes Chevron and HSBC as well as those that are Indian and Middle Eastern origin (“Our Clients”).
So, here are excerpts from an interview with the Chief Executive Officer (EU and US Operations), so as to examine the question pertaining to this project.
Question 1: What countries do you do business with?
Response: Apart from my own country, Bangladesh, Micromac does business, in the areas of banking solutions and website development, for countries in the Middle East as well as South East Asia. Most notably, India and Kuwait apart from a few others (“Our Clients”).
Question 2: Are there any cultural differences that you have to take into account when doing business?
Response: Of course, there are cultural differences that results in expectations that have to be managed by Micromac. Whether this involves the different timezones that we have to operate from to even the languages spoken, there’s a lot that can be lost in translation and lead to unmet expectations as a result. For example, since Middle Eastern countries are Islamic in nature, one has to be careful how the subject of women are treated. Something that a conglomerate like IKEA had to be cognizant of, when it opened its first store in Jeddah, Saudi Arabia. In India and Bangladesh, it might be a bit freer (Malik, 2012). However, apart from that, the expectations in terms of quality of product and timeliness, are pretty much the same since the company’s business is at stake here and depends largely on the quality of the products and services that we offer.
Question 3: Are there any countries that you avoid doing business with because they make it too difficult?
Response: I don’t recall making such decisions as our transactions with most if not all businesses that require our services or products has been professional where clear expectations have been set in terms of deliverables. In a nutshell, we are more than happy to do business with people as far off as New Zealand or even those that we consider neighboring countries. Ultimately, these cultural differences, that you mentioned, is a learning process and which will only help us grow as a business. But no, we don’t have such a policy in place since we’ve enjoyed good relations with our clients so far.
Question 4: Can you give one or two examples each from the past where a government intervened and it hurt and benefited your company?
Response: There’s none that I can think of at the moment since our financial and delivery expectations are very clear with clients and the government. To be absolutely fair on this subject, I do believe that the government is neither a friend or foe of business (Davis, n.d.). If there are regulations or laws passed, it is to curb excesses and protect the consumers in the country. On the other hand, if regulations are not passed, then businesses can take advantage of the loopholes in law and which can affect consumers - our greatest focus - in a harmful manner. Milton Friedman once said that the only business that business has is business and this is not true (Palmer, Dunford & Buchanan, 2017). We have a responsibility to our immediate surroundings since businesses are also living entities that have an effect on people, places and most importantly, the economy. Big businesses are aggressive when it comes to making profits and consider government regulations to be an impediment to this (Davis, n.d.). However, there’s an upside to this since we’ve seen how companies tend to sidestep these regulations and behave in an unethical manner. If anything, labor, tax, regulating and reporting laws are as they should be, not unless you wish to expand your business aggressively (Lacoma, n.d.). One has to be realistic in this regard, and consider government policies to be just, and that are in place to take care of both businesses and the consumer since their actions influence the economy equally.
Have any specific regulations hurt Micromac such as tax laws. Since the company the company has offices in Bangladesh, the U.S. and the U.K. How does that work?
Response: Given that we well aware of the regulations in all three countries, and how important regulatory compliance is, there has been very few or no tax laws that have hurt us to the point of undergoing losses. Yes, small changes in regulations can have a big impact on business but the only area is which this will truly affect our business is reducing profits while also keeping track of unethical practices by businesses that shouldn’t be encouraged in the first place. Mind you, there’s a social responsibility that businesses have to be cognizant of, and which is why these regulations have been put in place. For example, pollution is a big issue and which needs to be resolved as it affects the environment, if not now then definitely much later. There are costs associated with these practices that any businessman without foresight will have to pay for in the future (Shaw, 2014). Another issue is that of monopoly and which can affect small businesses like mine that will suffer if government intervention does not take place. For that standpoint, there are just as many benefits to government intervention as much as there are impediments. Yet again, it depends on what your business goals are, and if they aren’t too aggressive, in terms of profit-making and expansion, then these regulations shouldn’t hurt you all that much.
How many employees would you say are employed in each country, where is the corporate headquarters and how do the tax laws affect your business base here in the U.S.?
Response: Since we are based out of three countries, we have about ____ employees in all that are mostly located in Dhaka, Bangladesh and where our main office/corporate headquarters are located as well (“About Us”). As mentioned earlier, government regulations are in place so as to protect both businesses and consumers and to maintain the balance of power even between the two. Given our profits so far, being compliant with regulations in the United States has kept us in business and which is something that we take very seriously. While these tax laws do affect our profit margins, this is more than made up for by the people who work at our business in Dhaka, thanks to the outsourcing model that has worked well for us. What I mean to say is that it has resulted in a win-win situation for us, given that people now have job security while are able to put out a product that is socially and economically beneficial to our clients, both local and global. In a nutshell, these tax laws don’t affect our business all that much given that we’re very clear about the expectations that government has from businesses and intend to stay within these guidelines (“About Us”).
Question 5: Is there an area in your company or line of business that you think needs government intervention? If so, what and why? If not so, why not?
Response: Based on our current goals and achievements, I don’t feel the need for government intervention in any line of business that we currently undertake. Until now, we have taken stringent measures to avoid exploiting tax or labor loopholes that some businesses have been caught red-handed with. Since our reputation is at stake as a small business, it would be fatal to indulge in such practices in the first place. So, no to respond to your question directly: there’s no part of our business that requires intervention as we have kept our noses clean, so to speak.
Question 6: Are you for or against government intervention? Do you think government intervention is a fair practice that should continue - why or why not?
Response: Yes, government intervention must continue as we are a small business and there’s every likelihood of big business monopolizing the market to an extent that we are muscled out. If anything, operating in a free market economy is what we desire and where competition is fair, thanks to government regulations that are in place. While we do aspire to expand in the near future, being ethical and socially responsible is also something that we would keep in mind since there’s a cost involved in condoning unethical practices that give businesses an unfair advantage and at the expense of their consumers. I firmly believe that there are definitely benefits to government intervention and if anything, the law should protect small businesses and consumers from conglomerates who have very deep pockets. Our economy depends on these regulations even if our profits might not be as substantial (Shaw, 2014).
Question 7: Do you agree or disagree with the following arguments for or against government intervention -
Response: From the perspective of a small business, so to speak, there’s a greater chance for equality is government intervention is taken seriously. Of course, there’s every chance of market failure and which is when, people who work for smaller firms will stand to lose their jobs as a result. This type of intervention not only guarantees the protection of smaller businesses but also the people who work for them since job security is a crucial issue in these turbulent times. Of course, it’s not all sunshine and roses since there’s every chance of government intervention going wrong as history would suggest. Not only do they have to cope with political pressure but also do not have the know-how to help them appropriate funding to the right projects. Of course, if government intervention goes too far, this will also curb personal freedom given that it indirectly influences what people should or should not spend on. Still, since it operates for the greater good of people, there are only a few times when this actually takes place. We have to give them the benefit of doubt. Finally, there’s also the argument that the market knows best as to how and when to produce goods. While this is largely true, operating in a free market means dealing with fierce competition with best practices that can hardly be classified as best. Even if government intervention might be considered as interference, there’s every chance that it goes more good than harm. This is why I’m in favor of government intervention as it keeps businesses in check while also looking out for small businesses as a result.
References
Our Clients. (n.d.) Micromac. Retrieved from http://www.mmtvbd.com/index/client/2/1/1
Davis, M. (n.d.) Government Regulations: Do They Help Businesses? Investopedia. Retrieved from http://www.investopedia.com/articles/economics/11/government-regulations.asp
Palmer, I., Dunford, R. & Buchanan, D A. (2017). Managing Organization Change: A Multiple Perspectives Approach (3rd ed.). New York, NY: McGraw Hill Education.
Lacoma, T. (n.d.). Government Laws That Affect Businesses. Houston Chronicle Website. Retrieved from http://smallbusiness.chron.com/government-laws-affect-businesses-25756.html
Shaw, W. (2014). Business Ethics. Boston, MA: Wadsworth Cengage Learning.
About Us. Micromac. Retrieved from http://www.mmtvbd.com/index/aboutus/1/2
Malik, N. (2012). No women please, we're Saudi Arabian Ikea. The Guardian Website. Retrieved from https://www.theguardian.com/commentisfree/2012/oct/02/no-women-saudi-arabian-ikea
