Business Environment
CASE 1
Q1) Imagine that you are in-charge of a major chemical plant,
manufacturing points. At present, the general awareness about the mandatory
requirements for chemical industry is very low. Even if the compliance record
is maintained, it is not disclosed to all employees. (25 marks)
In a recent seminar of the company, many experts from industry
associations like Confederation of Indian Industries (CII), conducted the
seminar. The dangers of non-compliance of ISO 14001 EMS certification and Trade
Sanctions, which are likely to increase, were discussed. Even the senior
managers were involved and a lot of serious discussions took place.
After a span of one month, the In-charge (i.e. you!) received a
call from the top management, who want you to find out more about the ISO
Certification. The management, wants to help you, with the help of other
employees to list the critical aspects that have potential environmental
impact.
You may be feeling that you have only some vague ideas about air
pollution in paint industry and water pollution, due to paint manufacture. You
may also recall the newspaper clipping on internationalization of paint
manufacturing practices, which states the following points:
i)
What are the activities that are critical to the company’s
environmental management certification?
ii)
List the activities which have potential environmental impacts in a
pint industry.
iii)
List the
legal requirements.
iv)
Is there a trade related issue involved in this case
v)
Explain,
how your company can prepare itself towards certification.
CASE 2 :
Q2) XYZ company is an equal opportunity
employer. XYZ Co has always upheld the
spirits of freedom, human welfare, fair practices and fair
treatment to all employees. It has the image of a socially responsible company
in India. XYZ Co., has never involved itself in any study deals, even if it
could bring good profits. (15 Marks)
Also, XYZ Co. is a major IT solution provider. XYZ has immense
potential for providing consultancy services in the African nations and South
East Asian countries. A request was received from an African country, stating
that they have an assignment for two years. The following conditions are to be
fulfilled.
a)
Employees
should not bring families with them during the assignment.
b)
Women
managers should not accompany the team.
c)
The
country and the collaborating company are not responsible if any accident or
any other untoward incidents take place.
Please answer the following questions :
i)
Should
XYZ Co take up the assignment?
ii)
How can
XYZ Co maintain business viability and growth without compromising on basic
rights and values enshrined? In the mission statement of the company?
iii)
What alterations may be sought in the agreement and why?
Q3) On the night of December 23, 1983 a dangerous chemical reation
occurred in the Union Carbide factory in Bhopal, when a large amount of water
got into the MIC i.e. Methyl Isocyanate storage tank. When the leak was
detected by workers at 11.30 pm, their eyes began to tear and burn. The rest is
history. About 40 tons of MIC poured out of the tank for nearly 2 hours and
escaped into air, spreading within 8 km down wind, About 4000 people were
killed in sleep or as they fled in terror, hundreds of thousands were injured
or effected the victims who were almost entirely the poorest members of the
population. The poisonous gas, caused death and left the survivors with
lingering disability and diseases.
The Bhopal disaster was a result of the combination of legal,
technological, organizational and human errors. The long term effects were made
worse by the absence of systems to care for and compensate the victims. Also,
the safety standards and maintenance procedure at the Union Carbide plant had
been deteriorating and ignored for months.
Questions :
i) From
Bhopal Tragedy, what an industrial manager learns? What safety procedures are
to be followed. Study the case deeply and state what were the defects of MIL
unit. In view of this case, prepare a disaster management plan, which could
cover be useful to a chemical company. (10 Marks)
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Q 4)
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i)
List the methods of waste management in the order of preference.
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(5 Marks)
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ii)
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What
are the advantages of solid waste incernaton?
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(5 Marks)
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iii) Define hazardous waste
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(5 Marks)
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iv)
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List
the legal provisions in the Environment Protection Act pertaining to
hazardous waste
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(5
Marks)
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Q 5)
i) Discuss the role of CPCB (Central Pollution Control Board) in
the pollution control activities in
India. (2 Marks)
ii) Mention the salient points of the 3 Acts : (2 Marks)
The Air (prevention and control of pollution) Act 1981
The Water (prevention and control of pollution) Act 1974 The
Environment (Protection) Act 1986
iii)
Explain the very elements of EIA (Environmental Impact Assessment)
– different types of Impact Assessments – the benefits of EIA – The EIA
process, key points to remember while
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conducting
an effective EIA.
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(2
Marks)
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iv)
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Compare and contrast “polluter pays
principle” with “beneficiary pays principle”.
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(2
Marks)
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v)
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What are the tenets of Risk management –
explain the steps involved through a chart.
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(2Marks)
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Business Environment
CASE
STUDY (20 Marks)
State Government of Victoria –
Environmental Selection Criteria for Multifunction Devices (Business
Innovation) Today, Governments are coming on board for the plight to be ‘green’
by introducing new regulations and policies that provide industry with financial
signs and mechanisms to encourage the greening of the supply chain. The
following is an example of how the Victorian Government specified environmental
requirements for Multifunction Devices (MFDs) in a recent tender document. The
Contractor(s) must provide MFDs that: a. Are Energy Star compliant, with Energy
Star capabilities enabled? b. Have low overall energy consumption in operation
as well as standby and sleep modes. c. Can have all components switched off by
the user so that no standby power is being consumed. d. Have document storage
capacity (including the ability to code and store print jobs). e. Have duplex
and page shrinkage (at least two pages to a page) printing and copying
capabilities. f. Are able to use paper with recycled content. g. Are able to
use paper which has previously been printed on one side. h. Are able to use
remanufactured toner cartridges,
including third party
remanufactured toner cartridges meeting required standards, with no effect on
service agreements or warranties i. Have low operating noise levels. The
following features are highly desirable: a. Units containing a percentage of
recycled materials, and/or materials which can be recovered, remanufactured or
recycled at the end of the unit’s useful life. Contractor(s) are encouraged to
provide innovative proposals for the disposal of equipment complying with
environmental standards. b. Packaging should be recyclable or compostable, and
should preferably include recycled content. Packaging takeback programs are
encouraged. c. The Victorian Government wishes to eliminate unnecessary
packaging associated with MFDs. Preference may be given to an arrangement
where, within the first 12 months of the contract, packaging reuse and
reduction options, whilst still offering adequate protection to products, will
be developed. d. Details of strategies and policies that manufacturers and/or
suppliers have developed or are in the process of developing in the area of
extended producer responsibility.
Answer
the following question.
Q1.
What are the Multifunction Devices (MFDs) that have been inserted by Victorian
Government in the tender documents and why?
Q2.
Discus the requirement of the greening of the supply chain, by all countries.
CASE
STUDY (20 Marks)
Sometimes, doing the right thing
is more important than profits, a lesson that Malden Mills learned firsthand.
When the factory burned down in 1995 just two weeks before Christmas,
production halted and employees assumed they'd be out of work until the factory
was rebuilt. But CEO Aaron Feuerstein extended the employees 90 days at full
pay, as well as 180 days with benefits at a cost of $25 million to Malden
Mills. After the factory was rebuilt and all of the displaced workers were
rehired, cooperation and productivity reached a new high, with 40% more
business, 95% customer and employee retention, and a production increase from
130,000 to 200,000 yards per week. However, since then, Malden Mills has been
to bankruptcy court three times, with much of the debt tied to the rebuild of the
factory. Feuerstein made employees happy, to be sure, but business students
should study this case to consider whether bold philanthropic actions will pay
off in the end.
Answer
the following question.
Q1.
Do you agree with the actions taken by CEO? Justify your reply.
Q2.
What may be reasons for reaching the production of the factory a new high?
Discuss in detail.
CASE
STUDY (20 Marks)
In the modern urban culture
consumption of soft drinks particularly among younger generation has become
very popular. Soft drinks in various flavors and tastes are widely patronized
by urban population at various occasions like dinner parties, marriages, social
get together; birthday celebration etc. Children of all ages are especially
attracted by the mere mention of the word soft drinks. The socalled competition
for this product in the market is different from other products. Mass media,
particularly television, has contributed to a large extent to the ever growing
demand for soft drinks. The attractive jingles and sports make the large
audience remember the brand at all times. In today’s highly competitive market
place, two players have dominated the industry; The New York based Pepsi
Company Inc. and the Atlanta based CocaCola. Throughout the globe, these major
players have been battling it out for a bigger chunk of the ever –growing soft
drink market. This battle has been witnessed in India too, between these two
giants. It was invented in May, 1886 by Dr. John .S. Pemberton in Atlanta,
Georgia, United States of America. Coca Cola offers a portfolio of world class
quality sparkling and still beverages, starting from Coca Cola to over 400 soft
drinks, juices, teas, water and energy drinks. The most successful brands are –
Coca Cola, Diet Coke, Sprite and Fanta. With operations over 200 countries it
has a workforce of 55,000 employees and serves over 1.7 billion servings each
day. PEPSI Pepsi was first developed by Caleb Bradham, a pharmacist and
industrialist from New Bern, North Carolina, in 1898. As the cola progressed in
popularity, he created the PepsiCola Company in 1902 and registered a patent
for his recipe in 1903. The PepsiCola Company was first incorporated in the
state of Delaware in 1919. Currently, PepsiCo is one the largest companies in
the U.S. It figures amongst the largest 15 companies worldwide according to the
number of employees hired. It has a U.S. Fortune rank of 50. Pepsi is bottled in
nearly 190 countries. PepsiCo is a world leader in snacks, foods and beverages
with revenues of more than $43 billion. It consists of many companies amongst
which the prominent once are PepsiCola, FritoLay and Pepsi Food International.
The group is presently into two of the most profitable and growing industries
namely, beverages and snack foods. It has scores of big brands available in
nearly 150 countries across the globe.
Answer
the following question.
Q1.
Give an over view of the case.
Q2.
How the PepsiCo differs from Coca Cola. Elaborate.
CASE
STUDY (20 Marks)
Case Study: DELL – Energy
Management (Enterprise Solution – Minimum of 200 Desktops – Technology
Innovation) Synopsis Dell embarked on an energy efficiency program that aimed
at conserving energy and cutting expenses by reducing the power used by
approximately 50,000 of its computers during nonbusiness hours. 1E’s Night
Watchman® and 1E WakeUp® were deployed to the 50,000 client computers that
fully integrated with Dell’s corporate Microsoft® Windows Server® and Microsoft
Systems Management Server (SMS) environment. As a result, Dell achieved a 40
percent reduction in energy costs, translating into US$1.8 million in savings
per year. The use of 1E Night Watchman® is a great example of how an organization
can effectively implement energy management practices that reduce energy
consumption and operating costs. Though cost savings are more noticeable for
larger corporations, 1E Night Watchman® is just as relevant to smaller
organisations with as few as 200 PCs. Featured Organizations Dell is a
multinational technology corporation that develops, manufactures, sells and
supports personal computers and other computerrelated products. 1E solutions
and services help automate and simplify IT operations and reduce complexity,
management cost and power consumption costs. By providing leadingedge solutions
with its expertise 1E has earned the trust and confidence of over 15 million
licensed users across 1,100 businesses in 42 countries worldwide. The Problem
to be Addressed Energy conservation is an increasingly important issue for all
organizations.
Answer
the following question.
Q1.
Explain how Dell achieved a 40 percent reduction in energy costs.
Q2. Give your views on the case.
Business Environment
CASE STUDY (20 Marks)
Tesco's move into Korea offers a classic case study of building
market share internationally. The company made some smart moves in their Korean
expansion, most notably partnering with Samsung, the leading Korean
conglomerate, and embracing the Korean way of life by operating stores as local
businesses and community centers. Tesco also made a smart move by employing
nearly 100% Koreans on staff, with only 4 British employees out of 23,000.
Reports indicate that Tesco's intelligent strategy has won over shoppers in
Seoul, with 25% of Koreans signed up for loyalty cards and sales in the
billions, finding success in "crack[ing] the Asian tiger," where
competitors such as Carrefour and WalMart have failed.
Answer the following question.
Q1. Give an overview of the case.
CASE STUDY (20 Marks)
Background checks are an issue faced by many companies, as
sensitive information is now more public than ever. Office Drop is no
exception, as the company scans paper into digital files, including patient
records and minister sermons, most of which require trustworthy employees who
can handle documents discreetly. Many companies offer quick, superficial
checks, but for Office Drop owner Prasad Thammineni, more information was
required. He found a company that would allow research to delve into a number
of different sources and perform a more comprehensive search. Other business
owners offered somewhat critical opinions of Thammineni's choice, pointing out
that instead of Goggling to find a background check company, he should have
asked his business network who they were using. They also recommended that he
took advantage of free resources, including online searches and checking out
social media sites to learn more about job candidates.
Answer the following question.
Q1. Give your views on the case
Q2. Why the opinion of other business owners was different from
the owner of office Drop? Discuss.
CASE STUDY (20 Marks)
After the dismal financial performance in the early 2000s, Yahoo!
(Yahoo) is on its way back to profitability in 2003. Under the guidance of
Terry Semel (Semel) CEO Yahoo, the portal is on the way to becoming the largest
media company in the world. With the spread of broadband, brand advertising is
steadily becoming the largest source of revenue for online companies. As
advertisers flock to Yahoo, Semel has a tough task of convincing traditional
media, which is responsible for most of its content, to continue their
relationship with Yahoo Semel believes that ‘Social media” where content is
generated by users themselves, through their photo and video blogs, podcasts
and hyperlinks, is the “next big thing” on the internet both for the user and
the advertiser. As Semel makes investments to make social media a reality, he
wonders if his bet will pay off. With so much content being generated in Yahoo,
will Yahoo be able to maintain the fine balance between guiding the user to the
most relevant content and its own content?
Answer the following question.
Q1. Discuss Yahoo’s growth
Q2. Discuss the competition and changing markets
Q3. Explain Yahoo’s new growth Strategy in changing environments
Q4. Give an overview of the case.
CASE STUDY (20 Marks)
China's enormous pool of low cost manpower had enabled it to
develop as a manufacturing base for companies across the globe. However, since
1998, the situation seemed to be fast changing with China facing a shortage in
the availability of skilled manpower. Experts predicted that this would lead to
an increase in the cost of available manpower and therefore increased costs for
businesses. They feared that this would result in China losing its competitive
advantage as a low cost manufacturing base. However, some experts were of the
opinion that the shortage of manpower was merely a temporary phenomenon and
China would continue to be a low cost manufacturing base.
Answer the following question.
Q1. Discuss the future of China’s
competitive advantages as a low cost manufacturing base for global companies.
BUSINESS ENVIRONMENTAL
1. Discuss how the
environment acts does as a stimulant to business. Analyse why business often
does little for the preservation of physical environment despite the fact that
it is significant for business activity.
(10)
iii)
Explain the relevance of ecological issues to business
environment (10)
iv) What do you
understand by Business Social Responsibility ( B S R ). How this can be used to
improve the Business Environment.
(10)
v) Explain how
the business in an organization can be regulated with regard to the
Organization’s Basic Objectives.
(10)
vi) Describe in
detail the different role played by the Government towards enriching the
business Environment.
(10)
d) In the
Business Environment context, explain how the Political and legal Environment
of business plays a vital role. Justify by bringing in suitable
examples. (10)
ii Evaluate
the advantages and disadvantages of FDI. What is your opinion on the role of
FDI in the Retail Sector? Justify your views with India's
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experience in this sector.
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(20)
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BUSINESS
ENVIRONMENT
vii)
Give a block diagram in establishing the design and quality
standards of technology recipient site?
viii)
Business
decision making and the impact of the macro-environment, Discuss?
ix) Give the constitution of SEBI Board and explain
SEBI functions?
x)
Write a note on socio-cultural environment of Business Write a note
on socio-cultural environment of Business?
xi) Discuss how the environment
acts does as a stimulant to business. Analyze why business often does little
for the preservation of physical environment despite the fact that it is
significant for business activity?
xii)
Evaluate the advantages and disadvantages of FDI. What is your opinion
on the role of FDI in the Retail Sector? Justify your views with India's
experience in this sector?
xiii)
Discuss the Third plan (1961-66)?
xiv)
Give any three critical elements of economic environment of
Business?
Business
Environment
Q1. Is
inexpensive labour a blessing or curse?
Q2. What
is economic growth?
Q3. What
are Category I Basins.
Q4. What
are the aims of new fiscal policy?
Q5. What
is licensing?
Q6. Give
nature of Indian planning.
Q7.
Discuss Eighth five year plan.
Q8.
What do you think about airport privatisation.
Business
Environment
CASE
STUDY
A major worldwide Financial
Services company demanded more computing power from its existing data centre facilities
to deliver higher speeds for transactions, with tighter security, whilst
reducing their operational costs and carbon emissions. As a result of replacing
all existing switches with BLADE’s RackSwitch G8000 1/10Gb aggregation switch
units, operating costs were reduced by 80 percent over a three year period,
latency was reduced 73 percent and cabling requirements were minimized through
the use of consolidated infrastructure. From a network perspective, it is
important to consider the significant benefits that more efficient switching
equipment can provide in speed and power usage, as well as in reduced cabling.
Bringing the networking back to a rack level will have a positive impact on the
overall resource usage in the data center. Though this type of technology is
mainly suited to large IT operations, it may be relevant to those SMEs that
have high processing needs and where there are opportunities to consolidate
switching hardware. Featured Organizations BLADE is the leading supplier of
Gigabit and 10G Ethernet network infrastructure solutions that reside in blade
servers and server and storage racks. BLADE’s virtual, cooler and easier Rack
Switch family demonstrates Rackonomics – a revolutionary approach for scaling
out data centre networks in order to drive down total cost of ownership. The
problems needing to be addressed? A major worldwide Financial Services company
demanded more computing power from its existing data centre facilities to
deliver higher speeds for transactions, with tighter security, whilst reducing
their operational costs and carbon emissions. New solutions for the existing
switching infrastructure were needed so that these demands could be achieved,
scaling out data centre networks to drive down total cost of ownership. The Proposed
Solution Operating 25 data centres worldwide and 18 pods per data centre,
existing legacy switches were replaced with high performance BLADE’s Rack Switch
G8000 1/10Gb aggregation switch units in each location. Each of BLADE’s
integrated blade switches provide network intelligent switching features,
simplified cabling, and fewer network ports to purchase, cable up, and manage.
What were the End Benefits? (Efficiencies, Productivity, Financial, Cultural or
Other) By replacing the older external switches with BLADE’s Rack
Switch G8000 1/10 GB aggregation
switches; overall power costs were reduced by 80 percent over a three year
period. In addition, BLADE’s integrated blade switches provide network
intelligent switching features that simplify cabling and reduce the number of network
ports that need to be managed, thereby providing significant savings in associated
cabling costs and annual maintenance contracts.
Answer
the following question.
Q1. Explain how savings in power
consumption leads to sustainability.
Q2. Discuss how Financial
Services company was able to reduce various costs associated with data centres.
CASE
STUDY
An excellent international case
study comes from bike manufacturer Triumph, which lost steam in its British
home base three decades ago, but found new life by heading overseas. In 2010,
Triumph sold just 7,562 bikes in the UK, but 50,000 worldwide, indicating that
an international interest paid off for the company. Triumph's famous factory in
Warwickshire closed up shop in 1983,
but the Indian factory remained,
and these days, the motorcycles have become the country's Harley Davidson. The
company struggles to meet demand in India, with a six month waiting list and a
new factory being built. India's middle class has embraced the vehicle as an
affordable commodity, even giving them as dowries in weddings.
Answer
the following question.
Q1. Give your views on the case.
Q2. How the bike manufacturer
survived, despite the steep fall in sale of bikes in their home country.
Discuss.
CASE
STUDY
After the dismal financial
performance in the early 2000s, Yahoo! (Yahoo) is on its way back to
profitability in 2003. Under the guidance of Terry Semel (Semel) CEO Yahoo, the
portal is on the way to becoming the largest media company in the world. With the
spread of broadband, brand advertising is steadily becoming the largest source
of revenue for online companies. As advertisers flock to Yahoo, Semel has a
tough task of convincing traditional media, which is responsible for most of
its content, to continue their relationship with Yahoo Semel believes that
‘Social media” where content is generated by users themselves, through their
photo and video blogs, podcasts and hyperlinks, is the “next big thing” on the
internet both for the user and the advertiser. As Semel makes investments to
make social media a reality, he wonders if his bet will pay off. With so much
content being generated in Yahoo, will Yahoo be able to maintain the fine
balance between guiding the user to the most relevant content and its own
content?
Answer
the following question.
Q1. Discuss Yahoo’s growth
Q2. Discuss the competition and
changing markets
Q3. Explain Yahoo’s new growth
Strategy in changing environments
Q4. Give an overview of the case.
CASE
STUDY
Since the formation of the
General Agreement on Tariffs and Trade (GATT) in 1947, its main objective has
been to promote international trade between nations by reducing agricultural
tariffs, export subsidies and domestic support, the major barriers to trade. To
achieve its objective, GATT monitored eight rounds of negotiations starting
with Geneva round in 1947 to the Uruguay round that lasted for 9 years.
However, except the Uruguay round that succeeded in setting targets regarding
reduction in tariffs, domestic support and subsidies by both developed and
developing countries none of the rounds was successful. What were the reasons
for the continuous failure of the rounds, when the objective of all the member
countries has been the same? n 1995, World Trade Organization (WTO) replaced
GATT to carry forward the same noble objective – remove barriers and uplift the
developing nations. The major negotiating round post WTO’s formation was ‘The
Doha Development Round’ in July 2008. However, not surprisingly, this round
also collapsed on the 9th day on the issue of usage of ‘Special Safeguard
Mechanism’ by developing countries. Interestingly, Regional Trade Agreements
(RTAs) between two or three neighboring countries have had a higher rate of success
than Multilateral Trade Agreements (MTAs). When RTAs could be successful, why
couldn’t developing and developed countries meet on a consensus with regard to
MTAs? In spite of benefits from trade liberalization, why do these trade
negotiations continuously fail? Who should be blamed for the failure of the
Doha Round? The case delves into the same issues. On November 15th 2008, few of
the member countries decided to conclude the Doha round and meet in December
2008 for the same. Will this round be successful? The case also explores into
the measures that need to be taken to make all the member countries think and
act alike.
Answer
the following question.
Q1. Explain the historical
relevance of formation of WTO (GATT) and other MTAs.
Q2. Explain the difficulties in
reaching consensus in MTAs and implementing those policies
Q3. Analyze the reasons for the
failure of Doha round of trade negotiations.
Q4. Debate the way forward for
this impasse and reflect on the relevance of MTAs in the light of increasing globalization
and bilateral trade in the world.
Business Environment
CASE STUDY
Asia had emerged as the destination for medical (healthcare) tourism
capitalizing on advantages of “lower cost skilled personnel,cultural factors,
natural endowments and unique forms of medicine.” The targeted consumers were patients
from developed nations where medical treatments were expensive and the waiting
lists long. By providing medical services to foreign customers, these countries
were not only generating valuable foreign exchange, but were also creating
employment opportunities. Thailand was the leader in the region, followed by
Singapore and Malaysia and India as the preferred destinations for medical
treatment. The benefits of foreign exchange, employment and growth in national
income, which extended well beyond the medical, travel and tourism
sectors attracted government interest across Asia, and efforts to
attract medical tourists added to the growth of the industry Though Asian
countries provided cheaper medical services, they were also perceived by some
as being manned by low quality doctors who provided poor quality treatment.
Pricing of the treatments and packages across the region varied. Experts opined
that the over
emphasis on the foreign patients who offered higher revenue compared to
domestic patients can be detrimental to public healthcare services in the home
country. Despite the issues and challenges, the region had vast opportunity for
growth The case describes the growth and reasons of the Asian region as a
preferred destination for Medical/Healthcare Tourism and the importance of the
healthcare tourism industry in the Asian economies. The case details the
issues and challenges for the countries in servicing the patients. The case
ends on the discussion whether such emphasis on healthcare tourism was
diverting the attention and resources of the government from the domestic
healthcare needs, especially public health. With such competition and
challenges, would Asian
countries be able to capitalize on the opportunity and at the same time
fulfill the social obligation of healthcare at home
Answer the following question.
Q1. Discuss the growth and reasons of the Asian region as a preferred
destination for Medical/Healthcare Tourism and the importance of the healthcare
tourism industry in the Asian economies.
Q2. Analyze the issues and challenges for the countries in servicing the
medical tourist patients.
CASE STUDY
With the number of patent applications increasing exponentially the
USPTO (US Patents and Trademarks Office) found it increasingly difficult to
cope with the workload. This resulted in a situation where many patents were
awarded to vague ideas without scrupulous review. Also there were many
instances where the approved patents stifled further innovation, than encourage
it and patents were used more like a weapon against competition. Many were
apprehensive about the suitability of the patent system of the industrial age
to the information age and suggested revamping not just the patent system, but
also the entire system of intellectual property law.
Answer the following question.
Q1. Discuss the conditions that led to the troubles for USPTO, the
relevance of business method patents and the viability of the Patent Law in
protecting innovators in the information age
Q2. Analyze the potential benefits that the reforms could bring to the
US economy, which drives a considerable part ofworldwide industrial growth.
CASE STUDY
Measuring the Results of DonorSupportedTax Reform – The case of
donorsupportedtax reform in Nigeria (GEMS3) Taxation is an important exchange
between government and private enterprise. It provides the means through which
governments are able to fund their activities, while influencing the behavior
of the private sector through the use of incentives and penalties. For many emerging
enterprises, the fear of taxation keeps them informal and hidden from official
observation. Tax is central to the business environment as well as to the
political accountability mechanisms of the state. In the past, tax reform typically
focused on the shortrunobjectives concerned with adjusting tax rates and
increasing revenue. However, from a business environment perspctive, taxreform focuses on the longertermconcerns
affecting economic growth and investment. Donor and development agencies
supporttax reform for a variety of reasons. These include: Increasing the
sources of taxation; Broadening the tax base to include micro and small
enterprises; reducing the tax burden for individual taxpayers; and
Strengthening political accountability processes. Thus, donor and development
agencies work with governments to streamline their tax systems, lower the barriers
for firms to participate, encourage foreign and domestic formal investment,
widen the tax base, and set the conditions necessary to lower the perbusinessburden.
Writing for the World Bank Group, Bruhn (2011) describes the challenges of
measuring the effects of tax reforms on economic outcomes. Overcoming these
challenges “involves extensive data requirements, nonuniform reporting
practices, identification problems, and a wide range of imperfect measures and
methodologies”. She cites several studies that link tax reforms that focus on
reducing corporate tax rates to increases in investment and formal firm
creation. While less is known “about the effects
of reducing compliance costs”, a few studies have begun to indicate
evidence of a link between tax simplification and an increase if firm creation
and sales. Donor and development agencies that support BER, focus on tax
reforms to contribute to increased private investments and rates of formal firm
establishment, along with increases in business turnover and employment levels.
These enterpriselevelchanges enhance the capacity of the private sector to
contribute to economic growth and poverty reduction. 2.1. The case of
donorsupportedtax reform in Nigeria (GEMS3) In Nigeria, the World Bank and the United
Kingdom’s Department for International Development (UK Aid) fund the Growth
Employment in States (GEMS) program. The Nigerian Federal Ministry for Trade
and Investment is responsible for implementing the program, which began in
2011. This program aims to create jobs and
increase nonoil growth in specific value chains. UK Aid has provided a
grant of £90 million and the World Bank a concessionary loan of US$160 million.
GEMS indicates it will achieve an overall internal rate of return of 48 percent.
A key target is the creation of at least 100,000 jobs directly in the selected
sectors. The program targets at least six economic sectors and aims to support
small and mediumsizedenterprises (SMEs). While GEMS has four broad program
themes, the third of these, GEMS3, is entitled “Support Improved Business Environment”.
This is a fiveyearprogram, which is due to conclude in 2015. GEMS3 seeks to
improve the environment for doing business in Nigeria, especially in land,
taxation and investment, so that these markets will work better for the poor.
The GEMS3 12 business model states that these improvements in doing business
will ultimately lead to lasting improvements
in economic opportunities for the poor, especially women. GEMS3 has an
overarching framework (i.e., logical framework) that cuts across
Answer the following question.
Q1. What is the importance of tax payment in the business environment?
Explain.
Q2. How the tax base is widened with the coordination of donor and
development agencies.
CASE STUDY
In 2009, Malaren issued a recall for every stroller it had sold in the
US for a decade, which came to 1 million units. The strollers were recalled so
that a cover could be installed to prevent amputation of a baby's fingers,
which could happen if the baby were to be in the stroller in the wrong spot. As
a luxury brand, this incident was damaging even though it was a misuse of the
product and not a defect. Experts believe that Malaren did the right thing in
the aftermath of the recall, asking for a fast track recall from the Consumer Product
Safety Commission, and got out in front of the recall as it started spreading through
the press, saving face and further embracing a mission of child safety.
Answer the following question.
Q1. Give an overview of the case,
Q2. In your
opinion, whether recalling strollers for modification was a wise step or not,
Comment with justifications..
Business
Environment
Q1. Discuss resumption of MAPIN.
(10 marks)
Q2. Discuss product diversity.
(10 marks)
Q3. Give merits of
Accountability? (10 marks)
Q4. What is demand pull
inflation? (10 marks)
Q5. Discuss performance in
relation to private savings . (10 marks)
Q6. Give highlights of labour
management relation. (10 marks)
Q7. How does formulation of the
plan take place? (10 marks)
Q8. What are the issues relating Intellectual
Property Rights.
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