Business Environment, Research Paper Example

Abstract

As the organizations within the United States move manufacturing and other business interests back into the United States a series of operational efforts are needed.  Insourcing capabilities back stateside encompasses increasing efficiencies, maintaining standard operating procedures and complying with the appropriate rules and regulations. The business environment changes dynamically based on the increase responsibility to meet financial, operational and strategic goals and objectives while also maintain key effectiveness and efficiencies within the business model.

GE’s ability to bring Manufacturing to the U.S

In Louisville, Kentucky, the General Electric Company is taking on multiple major initiatives in which the focus of their business model is moving from an outsourced focus model to local development and implementation of their goods.  The focus is to manufacture a series of appliances that are designed, engineered and assembled in the Louisville, Kentucky manufacturing plant.  The focus of GE is to invest heavily in the domestic production of their appliances to create centers of excellence in Louisville, Kentucky, Bloomington, Indiana, Decatur, Alabaman and Selmer, Tennessee.  This investment over the course of five years will top over $1 billion and add 1,300 jobs to the manufacturing plants.  This is a revitalization effort by GE to ensure their appliance business is committed to become increasingly competitive with the expanding market and to ensure market share stability and then growth in the appliance market.  With the movement of work from abroad to centrally locating the efforts stateside, this not only does this have positive impacts on the local community but with it the move also brings questions and concerns about administrative laws as well as considering applicable sales, licensing and e-Commerce laws that may need to be taken into consideration while starting up an enhanced and in some cases new manufacturing facilities in the United States.

Multiple elements of administrative law are relevant to GE’s manufacturing facility investment.  The investment of over $1 billion could be in jeopardy if the company does not abide by the appropriate laws and legal standards.  This includes the aspect of administrative laws that impact the lives of the persons involved.  In the case St. Bernard Citizens for Environmental Quality, Inc. v. Chalmette Refining (2005), ruled that companies must abide by environmental standards. The environmental standards stated by GE could face a stiff and harsh penalty if they did not abide by the appropriate environmental standards for waste disposal or ensuring a safe and clean workspace for its employees.  The administrative areas that would impact a manufacturing facility range from the Clean Air Act (CAA), Clean Water Act (CWA) to the Toxic Substances Control Act (TSCA).  These administrative law acts provide the framework and guidance needed for GE to conduct their work and business processes in an effective and efficient manner in regard to the laws and regulations around manufacturing.  The areas that is of greatest concern by General Electric include air pollution, environmental management, permits, and cleanup.  The impacts of these areas are highlighted in their corresponding Acts.  For example, the Clean Air Act denotes and provides the guidance regarding air pollution caused by machinery, logistical actions, reduction of pollutants and the required permits and enforcement of the act.  With General Electric increasing their manufacturing footprint within the bounds of the administrative laws around the Clean Air Act it is imperative that GE follows the act to ensure negative ramifications are avoided.

As GE moves the manufacturing of the new product lines to Louisville, this means that the engineers, developers and other creators of intellectual property will fall within the confines of the United States administrative laws around protection of intellectual property.  When developing new products and innovations there is a direct correlation between these developments and the increase in trade secrets, patents, trademarks and copyrights, all of which need to be protected.  According to Bendory, Macedo and Kasden (2012), the United States Patent and Trademark Office carry out the function of examining patent applications and then grant the rights to those patents.  This is of utmost importance to businesses within the United States because the ownership of the intellectual property could be of more importance than that of the actual facility to manufacture the product.  The ownership of the patent allows the exclusive rights to that to the applicant for that item.

In order to create an environment where a business can thrive there needs to be guidelines and regulations to ensure a fair and open market for competition.  In order to ensure this is established there are financial laws that facilitate the administration of antitrust and security laws.  With a company as large as GE, there are certain parameters that it must ensure it operates within to ensure not only compliance but also includes the elevation of awareness of specific laws and regulations regarding reporting.  Since GE is a U.S. based company which is publically traded many, if not all, of the administrative laws around finance have been addressed.  The important areas of concern regarding this area is reporting of tax and ensuring compliance with all applicable tax laws regarding manufacturing, selling and distribution of finished goods within the United States.  This is particularly important when vendor selection and how parts are sourced for the goods.  The management of the supply chain to ensure all regulations and compliance of those regulations are adhered to falls within the purview of GE.

In another regard, e-commerce laws revolve around international sales as well as collecting the appropriate sales tax over the internet.  By allowing international sales over the internet this opens up another realm of marketability and entrance into the global marketplace. This also brings up additional areas of concern regarding taxes, duties, customs and the protection of the customers.  There are specific e-commerce laws that a company must take into consideration. The first aspect is importing and exporting goods internationally. Other than determining the currency and price of the good it is imperative to understand the tariff rates and export licenses required to ship internationally.  Tariff rates need to be incorporated into the price but the license requirements is determined by the item as well as its end use.  It is important to understand the type of license requirements needed.  GE would export their appliances and would need to understand what Sabino (2005) was describing in “Administrative law without the state?” if they would be used by a foreign government or military entity as well as the tariffs associated with shipping the finished good.

In order to mitigate the threat of lawsuits regarding exportation laws, intellectual property, financial or tax laws and environmental laws, GE will need to be proactive in the efforts to maintain their overall compliance with the rules and regulations.  GE will need to fully understand what the impacts are to their business model when it comes to moving the business from overseas to a domestic manufacturing model.  This involves all of the sourcing aspects to bring in the parts either domestically or from overseas vendors.  This also includes the understanding the aspects of delivering the goods from a model in which the assembly was completed overseas and shipped overseas to a model where the export of goods start in the United States and ends in a foreign country. This increases the amount of complexity by ensuring compliance with exportation regulations of the United States as well as the importation regulations of the foreign country. To minimize these threats, GE will be required to follow each administrative law and file the appropriate filings with the government.  According to Richard S., (2005), in the article “The global regulatory challenge to U.S. administrative law”, the most important aspects include tax filings, environmental permits and export documentation.

References

Bendory, A., Macedo, C., and Kasdan, M. (2012). Federal circuit clarifies three-step recapture rule for analysis of reissued claims. Journal of Intellectual Property Law & Practice, 7 (9).

Richard S. (2005). The global regulatory challenge to U.S. administrative law.  Law & Contemporary Problems. 37.

Sabino C., (2005). Administrative law without the state? The challenge of global regulation, New York University, Journal of International Law and Politics. (12. 1).

St. Bernard Citizens for Environmental Quality, Inc. v. Chalmette Refining, L.L.C., 399 F. Supp. 2d 726 (E.D. La. 2005), Retrieved from: http://www.tulane.edu/~telc/assets/Court%20Orders/10-14-05%20St.%20Bernard%20Chalmette%202d%20SJ%20Ord.pdf