International Business Enterprise Telstra Corporation Limited Sample

Question: Discuss about the International Business Enterprise for Telstra Corporation Limited. Answer: Introduction: For the purpose of this assignment, Telstra Corporation Limited has been selected as a multinational company operating in Australia. There are various multinational companies which operate in Australia. These companies have been able to succeed both domestically and globally. An example of one such multinational company is Telstra Corporation Limited. Telstra is a leading Australian company which deals with telecommunications and media. Telstra believes in connecting people through effective communication and technology. It builds such technologies which are very easy and simple to use. (Gardiner, 2015). The company was founded in the year 1975 and it builds networks for telecommunications. The products and services which it markets are mobile, pay television, internet access etc. The five core values of Telstra are as follows: Telstra seeks to show that it cares for the people and it seeks to connect everyone through its technologies and products. Telstra believes in the principle of United we stand; divided we fall. Thus, Telstra seeks to work together in an integrated manner and aims to serve its customers with full dedication and determination. Telstra believes in trusting each other in every business operations and in every business dealings. Telstra deals with technologies which are very simple and easy to use. It seeks to avoid complications and believes in simplicity. The fifth and final core value of Telstra is that it seeks to find its courage. By knowing its courage Telstra has been able to stand head and shoulders above all the other companies operating in the telecommunication industry (Noel, 2015). Telstra operates in the telecommunication industry in Australia. It provides a wide range of telecommunications and information services. In the continent of Australia, Telstra provides 7 million voice services, 3.4 million broadband services and 17.2 million mobile services (Martin, 2015). The number of staff of the company in Australia is around 36000. Telstra has an efficient leadership team and an experienced Board of Directors who are responsible for carrying the affairs of the Company. The business entity has taken responsibility for creating a superb connected future for everyone. Telstra believes in giving importance to each and every customers. The greatness of the Company lies in the fact that it attaches too much value to the customers. Telstra believes in imparting benefits to everyone and aspires to bring social, cultural and economic change in the lives of every people (Scott et al., 2013). Telstra has more than 3000 staff globally and it operates in 22 countries worldwide. The ways through which Telstra is growing international business are as follows: 1. Through entering into partnerships with the other companies which are operating in the Asia Pacific region; 2. Through investing in countries which are focused on connectivity; and 3. Through investing in targeted markets (Di et al., 2015). The global headquarter of Telstra is located in 242 Exhibition Street, Melbourne, Victoria, Australia. The building in which the office of Telstra is located consists of 47 floors and it is counted within the top ten tallest buildings in Melbourne. Out of the 47 floors, 43 floors are used for official purposes (Young, 2014). Telstra is a fully privatised company and it is the largest telecommunication provider in Australia. Impressive management, strategic planning and the willingness to serve the customers have helped Telstra to reach the top position in the telecommunication industry in Australia. Telstra is growing fast and with the advancement of time it is growing its business in various dimensions and the company is expected to grow more in the years to come (Udagepola et al., 2015). For the purpose of this assignment, The Income Tax Rates Act, 1986 has been identified as a regulatory framework affecting the functioning of multinational companies operating in Australia. The Commonwealth of Australia is empowered under Section 51 of the Constitution of Australia to impose taxation and to enact legislations relating to taxation. Thus, multinational companies which operate in Australia come under the purview of taxation and the Commonwealth has the power to impose tax on them (Keatin Klatt, 2013). An example of such legislation passed by the Parliament of Australia for imposing tax on multinational enterprises is the Income Tax Rates Act. The Income Tax Rates Act was passed in the year, 1986 by the Commonwealth of Australia in exercise of the power given under Section 51 of the Australian Constitution. Section 23 of The Act deals with the rates of tax which are applicable to companies. This Act strongly affects the functioning of business dealings of a company. The Act has provided for an imputation system of taxation for the business entities operating in Australia (Tran-Nam, 2016). According to Section 23 (2), the rate of tax which has to be paid by a company operating in Australia is 30%. Under this tax system, a person who receives a dividend of A$100 would be deemed to have received a dividend of A $142.86. A certificate of payment of tax amounting to A$42.86 is given to such person who receives the dividend of A$100. This tax which is paid at the corporate level is used to offset the investors tax liability. Therefore, if the same tax rate of 30% is imposed on an investor, there will be no due left on the tax liability on the received dividend. But if a higher rate is imposed on the investor, then the payment of the due tax will be offset by the certificate amount of tax paid (Balachandran et al., 2013). Thus under this system, a company which earns a profit is required to pay a tax on the profit. The shareholders to whom the company pays a dividend is also liable to pay a tax. Thus, the income of the shareholders after payment of tax will be a very small proportion of the original profit. This is also known as the imputation system. Under this system, refunds are made to the individual tax payer for the purpose of reflecting the amount of tax paid by the company and imputed to the individual. Thus, practically, an Australian income tax payer who receives a dividend of A$70 is deemed to have received an amount of A$100 for working out the personal tax liability. A$30 is credited to against the tax liability of the individual. Under this arrangement, the tax payer is entitled to a cash rebate. It actually means that the income of the company is ultimately taxed at the marginal tax rate of the individual tax rate. The amount which is credited against the tax liability of the individual is known as franking credit. A franking credit account is maintained by every multinational companies operating in Australia. A franked dividend is declared by the companies out of such franking credit account, so long a positive balance is maintained in such account (Taylor Richardson 2013). For the purpose of this assignment, OECD Guidelines for Multinational Enterprises has been identified as a convention which has impacted the goods and services provided by multinational companies operating in Australia. In 1960, the Convention on the Organisation for Economic Co-operation and Development was passed and was signed by 20 countries. The Convention was signed by Australia in 1971 and subsequently it became a member State of the Convention. Certain guideline have been enacted by the OECD for multinational Corporations operating in the member States (Oshionebo, 2013). The member countries of OECD work cooperatively for addressing the challenges relating to economy, society and environment globally. The governments of the member countries of OECD seek to identify the common problems, compare the policies adopted and maintain the good practices. In the year, 2000, the OECD Guidelines for Multinational Enterprises came into effect. These guidelines were enacted for regulating the activities of the multinational corporations operating in the member countries. International investment has played a major role in the world economy and it has enhanced the development of the countries worldwide. The guidelines are in the form of recommendations for the multinational corporations to conduct responsible business in the member countries. The guidelines have laid down that the multinational enterprises should work in accordance with the policies enacted by the respective governments if the member States. Thus, the guidelines require a harmony to be maintained between the governments of the member States and the multinational enterprises working those member countries. Working in harmony with the government policies would ensure a basis of mutual confidence between the business enterprises and the societies in which they operate. These guidelines have also laid emphasis on the foreign investment and seek to change the climate of the foreign investments. The guidelines have also laid down rules for protecting the environment while conducting business in the member countries. With respect to the goods and services which the multinational enterprises deal with, the following recommendations have been provided by the guidelines: The consumers are ought to be treated fairly by the multinational enterprises under the guidelines. The business enterprises should ensure that the goods or services which they provide, meet the standard of quality and are safe (Heb ek, et al., 2014). The goods and services which are provided by the multinational enterprises should not be harmful to the heath and safety of the consumers. Any harm which may arise out of the using of such goods and services should be cautioned to the consumers and adequate warnings should be given to the consumers related to the use of the goods or services. Moreover, information labels on the products should be provided by the multinational enterprises so that the consumers become aware of the advantages or disadvantages of using the product or services. Relevant information related to the content of the products should also be given by the multinational enterprises. Information related to the methods of using the products, storage of products and disposing of the products should also be provided by the business enterprises so that the consumers use the products cautiously. These information are useful for the consumers and all steps should be taken to fulfil the above requirements (Muchlinski, 2012). The guidelines also laid down rules with respect to the multinational enterprises for providing adequate opportunities to the consumers for filing a complaint related to the quality or usage of the products. The multinational enterprises are required to lay down clearly the process of filing complaints and they should address the complaints as early as possible. The addressing of complaint mechanism procedures are important for gaining the trust and confidence of the consumers (Ruggie Nelson, 2015). Under the guidelines the multinational enterprises are required not to conduct fraudulent or deceptive business conduct. A misleading statement relating to the product provided by a multinational enterprise may deceive the consumer and it may highly disappoint them. Unfair practices by the multinational enterprises are required to be prohibited under the guidelines. Thus, under the guidelines, the multinational enterprises are required to conduct responsible business and they should take all necessary steps to abstain from doing fraudulent or defective or unfair practices (Yang et al., 2012). The guidelines have also laid down rules for the multinational enterprises to respect the right to privacy of the consumers and not to share the personal information of the individuals without their consent. Right to privacy is an important right of an individual and it has also been recognised under Universal Declaration of Human Rights (UDHR). Article 12 of UDHR specifically mentions that there should be no arbitrary interference with an individuals privacy. Right to privacy, being an important human right should thus be protected and respected by the multinational enterprises (Evans Drew, 2013). Under the guidelines, the multinational enterprises are also recommended to cooperate fully with the public authorities for preventing or removing any harm which may have been caused to any consumer through the suing of any products or services provided by the multinational enterprises (Robinson, 2014). Thus, these guidelines seek to regulate the activities to be undertaken by the business enterprises while conducting business in the member States. They are required to take care of the consumers, to take care of the environment and society in which they operate. These guidelines are really very much useful for shaping the conduct of the businesses operating in the member countries of OECD. References: Balachandran, B., Hanlon, D., Tu, H. C. (2013, July). Tax-induced earnings management within a dividend imputation system. In Australian Tax Forum, Forthcoming. Di Fatta, G., Ochoa, W. L. S., Pathan, A. C. M. (2015). Internet and Distributed Computing Systems. Springer. Gardiner, B. 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