Managment Essay Example | Topics and Well Written Essays - 1500 words

Managment - Essay Example On the other hand, Telstra have to establish administrative set up in Brazil to get the government’s permission to start its telecommunication service. Telstra have been successful in Australia capturing optimum market share. So, Telstra can replicate this success in other markets also, and in that direction Brazil can be the perfect market for its expansion plans. 2.0 Political Environment 2.1 Government stability Although remnants of instability were there, there was progress when Luiz Inacio Lula da Silva was reelected as the country’s president for the second term in 2006, and then the election of his protege Dilma Rousseff in 2011. He actualized a stable form of government and also launched many pro-business measures, with Rousseff vouching to follow it. 2.2 Government and contribution Immediately after assuming office as part of his second term in 2006, the Silva government launched a new Growth Acceleration Program called the Programa de Aceleracao de Crescimento , or PAC. Under this program, the Brazilian government is investing sizable funds to establish infrastructures for the entry and development of businesses. Infrastructures for better transportation, telecom and for power energy are the key parts of PAC. 2.3 Analysis When the political climate of Brazil is viewed from the perspective of Telstra’s expansion plans, it augurs well. ... mework and the resultant powers regarding foreign investment are the exclusive competence of the Brazilian Federal government; and states do not have regulatory powers in this matter. (OECD 1998). Thus, with investor friendly environment prevailing under Rousseff’s regime, the regulatory framework also has been made business friendly. 3.2 Business laws A telecommunication service licence can only be granted to companies existing under Brazilian law, with their principal place of business and administration in Brazil. (Campbell 2007). This law clearly makes it mandatory for the companies like Telstra to establish a local set up or even a subsidiary. 3.3 Labour laws In Brazil labor laws; there are impediments to hiring workers and even more to firing them. (Thomas 2006). The labor code encourages litigation to resolve disputes between the employees and the employers. Use of part-time labor is severely constrained. (Thomas 2006). 3.4 Taxation laws As part of PAC, tax system for b usiness as been further simplified and reduced. â€Å"The measures include investment in the creation and repair of roads and railways, simplification and reduction of taxation.† (The President 2011) 3.5 Analysis From the above discussion of the Brazil’s legal environment, it is clear that Brazil has some tough laws. Although, these laws are not disadvantageous, they have to be given a lot more care, for any cell phone company including Telstra to have successful operations. 4.0 Economic Environment (Heading) 4.1 Interest rates (%) The Brazilian Government set the subsidized interested rates at 6.75 percent, with interest rates offered to middle-class producers set still lower at 6.25 percent. (Hrapsky and Ming 2010). These high interest rates and the economic boom are the key reasons for