Since the horrible events of September 11, 2001, the United States, and indeed the entire world has changed in many ways. For the purpose of this research, the focus will be on the ways that the regulation of the business environment has changed in light of 9/11 and other sociopolitical changes like it. From whatever corner of the globe one looks, the threat of future terrorism and the impact of previous acts of terrorism has changed the way that business is conducted worldwide as well as the way that the various governments of the world regulate it (Garten, 2002).
This paper will discuss not only the governmental regulation issues that one well known company faced when moving into international markets, but also what lies ahead for other companies seeking to do the same. The Golden Arches Head East Few companies are as well known to young and old alike across America than McDonald’s. Children fondly see the images of Ronald McDonald and the other colorful characters that await them when they visit the brightly decorated McDonald’s restaurants.
Parents reminisce about the first time they visited the place as a child and everyone is delighted with their fast food dining experience; in fact, statistics show that 96% of all Americans have either visited a McDonald’s restaurant in their lifetime or at least have eaten food from one (Watson, 1997). With such a recognizable and popular product, it is easy to see why the desire to go international was a strong one for the management of McDonald’s.
With this in mind, one of the most interesting moves of McDonald’s abroad took place in 1992 when the first McDonald’s opened in Beijing, China. This opening says as much about the vast appeal of “The Golden Arches” as it does about the changing regulations of international business. For the Chinese, their society for thousands of years had been a closed one, with their ideas, lifestyle and culture being kept from outside intrusion.
In modern times, the scourge of Communism has not only oppressed her people, but also kept the economy somewhat stagnant due to the prohibition of outside companies, let alone an icon of a democratic society like McDonald’s. What one sees in the opening of McDonald’s in China is one of the many relaxations of regulation in nations that a generation ago would never have dreamed of such a move. There have been difficulties in this move, however, due to government regulation.
It has been difficult for McDonald’s to adapt to the fact that Chinese workers have little protection in terms of hours required to work without breaks, safety factors and environmental issues. This has, in many cases, created clashes between McDonald’s management and the Chinese government, which does not want too much of a variance in policies from their domestic companies (Garten, 2002). This is the somewhat dark side of government regulation, and only time will tell where this issue or how this issue will ultimately be resolved. Implications for International Business
The regulatory changes that are seen by the governments of the world are not only a response to a desire on the part of nations to be able to gain alliances with others as a matter of mutual security, but also, the bottom line in many of these situations seems to be the bottom line. Nations like China and Russia, which are now in the modern day changing their regulation to allow more of a free market type of economy, are doing so in an effort to receive an influx of capital from around the world, which will allow them to revive economies that have been in a state of hibernation for generations (Kogut, 1998).
However, a word of caution needs to be repeated. Much like the afore mentioned clashes between McDonald’s management and the Chinese government, nations will have to practice a sort of business diplomacy moving forward. Conclusion What has been seen in this research is that the change of government regulation in business of late has been as much an issue of economy as it is security. In conclusion, one can only hope that the regulation of business continues to favor mutual prosperity and security for all nations of the world.
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