Political & Economic Influences with Multinational Business

1. Political & Economic Influences with Multinational Business Ron Smith Commercial Contracting Conference 2003

2. Fundamental “Multinational” Challenge An International organization or an American company with a big travel budget?

3. Political & Economic Influences • Constitutional authorities • Statutory and regulatory environments • Local custom and urban legend • Economic realities • Seminar assignment: compare/contrast • US Federal • US State & Local, Education • US Commercial • International Commercial markets • International Government markets • Multinational Business: common themes; universal rules

4. US Federal • Constitutional authorities • Congressional authorization & appropriation • Executive regulation & implementation • Statutory and regulatory environments • Acquisition law & regulation • Business law & regulation, e.g. SAB 101, environmental, labor, anti-trust • Local custom & urban legend • Agency/agency • Users/purchasers • Policies, procedures, initiatives • Economic realities • Regulated markets and business practices • Annual funds

5. US State & Local • Constitutional authorities • Parallel universes: 50 states times infinity • Separation of powers: state/federal; agency/agency; central/local • Statutory and regulatory environments • State laws, local ordinances, micro-customs • Competition = seal bidding assumption • Heritage of commodity purchasing vs systems/projects • Cooperative purchasing +/- • Local custom and urban legend • Inter and Intra Agency rivalries • Changes in Administration • Local preferences exponential • Scandals, crises, cause celebre • Economic realities • Mix of Federal/state funding • Annual funding • Macro-economic vulnerabilities (e.g. sales taxes) • Shifting tax bases (e.g. impact of the Internet)

6. US Education • Constitutional authority • School boards, Boards of Regents • Oversight and approval processes • Statutory & regulatory environment • Local mandates • State & Federal overlay • Local custom & urban legend • Administrative force majeure • Established internal constituencies • The ultimate in relationship marketing • Economic realities • Local volatility • Short-term horizons: funding & execution

7. US Commercial • Constitutional authority • Civil statutes • Overlay of enforcement & regulation • Statutory & regulatory environment • Regulation by industry type, not by contract type (e.g., telecom, utilities) • Specialized regulatory agencies (EPA, OSHA, SEC) • Local Custom & urban legend • Transaction based • Relationship based • No standard T&Cs or req’d formats • Celebrity Death Match: salesmen vs lawyers • Economic realities • Global macroeconomics • Customer-centric microeconomics

8. International Commercial • Constitutional authority • Border to border; moment to moment • Defined macro-environments: USA, EU, Japan, China • Statutory & regulatory environment • Country-specific laws • Cultural mandates • Institutional behaviors • Local custom & urban legend • Social traditions, assumptions, mandates • Language: the body language of the spoken word • Economic realities • Currency conversions • Tariffs & trade • Import and export regulations • Ethics, customs, traditions • Show me the money

9. Foreign Governments • Constitutional authorities • National laws and regulations • Political volatility • US foreign policy overlay • Statutory and regulatory environments • Customs; import/export • Local preferences • Local custom and urban legend • Language & culture • Culture & language • Economic realities • Volatility of availability • Volatility of commitment • Volatility of relationships

10. Issues & Challenges • Language & culture • Ethics • Security • Economics: both macro & micro • Politics, influence, representation • Command & control