NBA Lockout - Research Paper Example

?Scope of business Law: The growing complexities of modern world transcend the need of precise conjunctional regulations because of the fact that theworld as a whole is rapidly transforming itself into single unit protectorate. Thus, the present concept of regulation of legislation stimulated the social attitude of bringing harmony with social norms through the route of intercontinental corporate business law. In other words, globalization has altered the concept of business law and its application comprehensively in the light of internationally recognized rights and regulations. Such features of business law are covered by legislation enacted by central and state governments. Sources of Business Law; The subcategories of the sources of business law are derived from statutory law, case law, natural law, English mercantile law and the law of custom and usage. All the areas and functions of a business are enforceable under business law through regulations of contracts, bailment, agency, sales of goods, partnerships, companies, negotiable instruments, pollution control etc. Union have been the prime focus of government and private sector because of the power and rights allocated by them from law. The history have been marked by unfair practices and social discrimination towards labor force that was intended to be secured with the assistance of law in good perception The objective behind the permission to form Union was to form an equal powerful body of labor against the corporate organizations to secure the interest of both the concerns faithfully concerning the fact that an individual worker have no power and authority to bargain against unfavorable terms and conditions. The National Labor Relation Act; The National Labor Relation Act was passed in the year 1935 with the features that illustrates the rights of employees in relation to the establishment and functioning of Union that includes right to form Union and join Union, to bargain collectively with authorities through union and to engage in strikes for securing fair decisions. The purpose of the Act is to secure labor from being a victim of unfair practices and allocated certain rights to work with prestige through negotiations and bargaining. Union Issues; The types of issues that can be regarded as important pertaining to the nature and scope of Union activities are categorized below; Mandatory Issues; any issue that has been raised by either side is mandatory and the other party is bound to negotiate in good faith with honest efforts. The types of mandatory issues are usually working condition such as overtime, layoff, safety and security etc. Permissive Issues; this category encompasses issues that are not pressed to impasse and is only considered if both the parties are agreed on negotiation. The types of issues covered under the spectrum are the amount of dues to be paid to Union, Union related procedures and company’s product price related issues. Prohibited (illegal) issues; This category points over the issues that cannot be legally negotiated such as that of illegal discrimination in hiring and other union related technical agreement like close shop agreement or union security agreement. Types of Bargaining; The various types of bargaining involved in the procedure of negotiations are illustrated below for an over view. Distributive bargaining; This bargaining refers to the condition when there is a conflict of goal among the management and union. Integrative bargaining; This bargaining refers to the condition when there is no conflict of goal among the management and union, that is both the parties have common objective. Attitudinal Structuring; This bargaining refers to the condition when the objective is to impact the attitude of the other party. Intra organizational bargaining; This bargaining refers to the state when the objective is to resolve the conflict of the members of same side. Globalization and its impact on law of international business; International business today is an intertwined process that pervades nearly every aspect of our lives (McCall 2004). Marketing and positioning Brands, Services and Products need to be looked into by taking into account its culture and the psyche of its people. That will make it easier for the stakeholders in the region to accept and implement the recommendations, as well as know what to take of and about the region that would appeal to the Western market (Lovelock, Wirtz, and Xiongwen-Lu, 2004) From the individual citizen, as members of society, private and government organizations, we are all enmeshed in a network of global linkages that makes countries dependent more than ever on other countries and other organizations. True, this inter-dependence can be negative or positive at times, but the fact is that the world now is one. The so-called economic meltdown in South Asia in 1997-8 made its effects severely felt as far away as Russia, Brazil and Japan, and to a lesser extent the rest of the world. And currently, the Greek financial woes have a potential to sink others in the Euro zone. On the positive side, the industrial rise of Japan, rubbed well on a number of its Asian neighbors. Among the positive fruits of this one-world reality, is the Trade and Investment between countries. Today, the world is a play-field at which the big part of the game is where multinationals corporations (MNCs) transfer investments and expertise to other, less industrialized, countries. These countries provide sources of cheap labour for manual skills as in Indonesia and Thailand, intellectual skills such as the computer software industry in India, and productive expertise as in the example of the Republic of Korea, geographical position as in the example of Hong Kong or Dubai. The contribution of Business Law on Globalization; Based on those factors and in an economy where competitiveness is global, investors do take advantage of relocating to where they can retain their competitive advantage, whether in innovation, cost, quality or speed of production and delivery. Thus, the implantation of international business as a force of converting world into a single micro environmental unit instilled the need of far reaching business law to contribute constructively on agreed patterns in the social, economical and political development throughout the world. Precisely, globalization is the element that has most significant impact on business law at present and poses challenges to all the countries to capitalize the laws of business for advancement with innovation and sustainable competitiveness. Hence, it must be stated that the direct / indirect impacts of globalization are not always positive or constructive, as the complexity of modern times are to be monitored rationally because of the delicate nature of subject. Most of the laws and regulations designed to cope with present tribulations may not be viable in near future because rapid modification in micro environment, thus arousing various impediments against globalization . Case Study of Globalization and its impact on International business; A case study with a scene setting will aid the reader to understand Globalization and its impact on International business Reasons for choosing the company; NBA is more of a business than sport these days because of the amount of revenues regenerated by the company. It strives continuously to enhance its revenues and global sharing, obviously dealing successfully with the international business law. Therefore, the company is chosen to be the subject for the case study on the grounds of its victorious transformation with critical strategies and problem solving approach to handle international business operations. Project Objectives and Research question; The case study of NBA in relation to globalization aims to explore and highlight implications of international business law necessary to be addressed for receptive globalization. Hence, this research paper aims to dig into the questions such as below. The challenges faced by operation management in the course of globalization. The issues of international business operations with regard to law and globalization. The behavioral pattern of host countries. The probability of Litigation and Public criticism. Background; NBA is the major is the major professional basketball league in North America. It was found on June 6, 1946 in New York City as the basketball association of America. Later, in 1949, it merged with the rival national basket ball league and became NBA that is National Basketball Association. It comprises of thirty teams that are further divided in six divisions in two conferences. NBA clubs are thirty in number out of which twenty nine are located in America and one in Canada. The affiliations of NBA are the leagues stated below; NBA Development’s League Women’s NBAInvalid source specified. Sports are also taking part in the mounting global contest. Hence, NBA strategy of flourishing business worldwide is greatly bounded by the impacts of globalization. Therefore, an increased overseas exposure is the core strategy of NBA to dominate international markets. The strategy of NBA is deeply concerned with international business law for accessing its objectives successfully. Although the choice of law guarded by the agreement is that of the laws of the State of New York, United States of America, without regard to its principles of conflicts of laws Invalid source specified. International Business Operations of NBA; An authentic and accurate information system is what that can transform a business into a flourishing global company. The role of the information and communication system of NBA cannot be underestimated in regards to NBA survival through global challenges and opportunities. Hitherto, the core features of International business operation of NBA are discussed below for reorganization of Company’s effort for victorious International business operations. The issues of international business operations with regard to law and globalization. Operations Management aims to align the information and informal values of an organization under a defined strategy to come up with the best results in terms of profit and sustainability.Invalid source specified. the role of NBA’s operational management is somewhat complicated concerning the implications of International business law and their application. The efficient operations management of NBA constantly aims to enhance the potential of an organization through outstanding performance in each of the business function.Invalid source specified. Also the operational management of NBA have visibly tilted emphasizing over contemporary advanced factors that includes focus on globalization, efficient on time production, supply chain efficacy, innovative procedures for product development, customer oriented customized production, leadership cultivation by employee empowerment and ethical deliberation with environmental friendly initiatives.Invalid source specified. In conclusion, technology and innovation could be stated as the key factors that supports the modern aspects of NBA’s operations management through the insight of infrastructure and operational researchInvalid source specified. to attain productivity, innovation and competitive successInvalid source specified.. Therefore, although the operations management of recent times can be acclaimed far more challenging because of advanced technology of engineering, finance, marketing and information system strategyInvalid source specified.but the management professionals of NBA are successfully dealing with the regulatory and legal aspects of International business Affairs. In addition, the modifications have further supplemented business sustainability by means of significant element such as capacity planning and forecasting.Invalid source specified. The behavioral pattern of host countries. The policies in a country are developed with an aim to control the macro economics with the objectives of full employment, price stability, high but sustainable economic growth and equilibrium of the balance of payments. The country’s policy influences the productivity growth directly that can be measured in terms of changes in the rate of GDP (Gross Domestic Product), assuming it accurate by tempering the influence of inflation with the assistance of company policies. GDP is also determined to evaluate the annual output (or income or expenditure) of an economy that is piloted under the control of country policies. The other significant measure, somewhat similar to GDP, to be considered for monitoring the influence is GNP (Gross National Product). Regular monitoring of growth figures is conducted to keep an eye on the efficacy of country policies to support productivity growth. It encompasses the level of competition in a market, trade and investment openness and general supply and demand conditions. (The Economics of Productivity growth, p. 98) NBA management professional have designed the strategies of global expansion in a manner that significantly supports economy of host countries ethically with direct/ indirect contribution to revenues. Hence, supporting the stability of the economic environment of host countries with major contribution in productivity growth. (Members of CBO Fiscal Analysis division, 1981). As illustrated above the constructive role of Governments in ensuring the fundamental influences of productivity is conducted through induction of public policies with the objective to shape up the extent to which the immediate determinants of productivity growth evolve. Keeping in view the determinants NBA rushes to expand its global presence with a rational strategy of evaluating market size, income and on- court success is the prime features of NBA’s success that is intended for positive configuration of host countries legislation and demand. For example, the recent move of NBA global expansion strategy targeted China for the expansion, the reason quoted by the president of NBA International Heidi Ueberroth for this choice were the features of basketball growth, major shareholder of international market and growing rate of fans and players in the country.Invalid source specified.. Although the decision was challenging toughest hoops in China are in the corridors of power but the company succeeded to win the favor of authorities and won host government agencies' approval for arena construction and to persuade television stations owned by local and provincial governments to join national broadcasters in carrying NBA games.Invalid source specified. The probability of Litigation and Public criticism The contemporary literature available to elicit the efficiency for the concept of economic policy making is inundated with the concept of trade off between efficiency and equality encompassing referred feature in the light of political debates of the time. Exploitation of the concept is evident in the available literature of economic and public policy in recently democratized third world countries and vice versa. In general, policies are designed by political parties targeting the outcomes that are ordered in a lexicographic manner primarily focusing on economic growth and secondarily exploring redistributive advantages of natural constituencies. Irrespective of the ideology of the political party, economic growth strategy demonstrating convergence with an aim to dilute conflict is essential to form the natural constituency of the right, positively. (Maria Jimenez Buedo, 2002) Although evident is the fact that tradeoff faced by society between efficiency and equality often results in the imbalance which is far in different to what is commonly acknowledged. Precisely, the aim is to achieve progressive redistribution that is from rich to poor, even though at times it takes the shape of regressive distribution from the poor to the rich consequently resulting in the imbalance of efficiency and equality. ("Redistribution of wealth"). An income distribution structure has massive impact on a country’s economic efficiency directly by means of social spending and ultimately through other features like education of premium standard / human capital and via sound economic institutions. (Antonio Afonso, 2008). The rapid pace of reforms in UK, since 1997 have witnessed progressive distribution of income assisting low income families with children to catch up their effluent peers with quality spending. (Paul Gregg, 2005). The CSR of NBA supports such a distribution network through direct / indirect support by introducing Foreign Borne Players and offering financial assistance to Poor countries. Through this factor of globalization NBA also supports progressive redistribution internationally with its globally sustainable Diversity strategies. The most recent example is the vendor diversity programme of NBA with an aim to create opportunities for local minority and women owned business to participate in Women Own business in NBA all star 2012, as suppliers.Invalid source specified.. Thus, such initiatives by NBA aligned with the international business law and human rights assisted the company to gain market reputation with an unbiased racial and ethnic diversity. Globalization and NBA Lockout; As illustrated above, the globalization of business intensified the complexity of operations management in number of ways. These scenarios often lead to unwanted situations such as strikes, lockout etc. In the referred case study NBA Lockout 2011 is the fourth in the history of NBA which arrived as a challenge for operation management of the time. The grounds of conflict are the issues of revenue sharing and the structure of salary cap. The Lockout was a work stoppage from owners from the month of July that abandoned all the facilities of tem, trainers and staff. The preseason games 2011-2012 were declined, precisely all the activities of the running of organization were at pause. The history of the conflict can be figured out from the earlier Lockout of NBA over the issue of agreement with players that includes austere clauses on drug testing and other restrictions like age limit and agreement tenure. Although mutual bargaining settled the issue but only a year after the settlement eight owners requested David Stern (NBA commissioner) in a signed petition to review at the financial losses. The ground realities of economic system that only support large market teams were spotlighted to base the argument. Hence, negotiations on the light of petition begun in the year 2011. The owner’s stance was based on accusation that the out of 30 teams 22 were losing money resulting in the loss of $300 million a year. The proposition was presented with a request to reduce the salary of players by 40% and induction of a hard salary cap of $45 million per team by reducing it from the soft cap $58 million. Obviously, Union was out raged on such a proposition resulting in the filing of petition in NLBR with accusation of NBA owner’s negotiation with unfair intentions in May 2011. (ANTHONY, 2011) The bargaining between Union and owners took major twist in the shape of proposal called “flex cap” by owner that limit payroll $62 million with the condition that if the average team’s salary exceed the amount, the teams will be penalized. In the opinion of Union it was yet another form of hard cap as the ceiling was unreasonable. The other issue of salary reduction, Union proposed to cut $500 million over the next five years with eventual reduction in BRI share from 57 to 54.3 percent. Yet in this case also the owner’s stance was reduction of $2 billion over the next 10 years. In short, negotiations were stuck and finally broke off with an expiry of CBA at midnight. Losses incurred due to NBA Lockout; Out of the referred conflict, the owners locked out the players July 1st and the sides spent most of summer and fall battling over the division of revenues and other changes. The losses incurred out of the lock out according to an estimate was from the side of players between $80,500- for an undrafted rookie worth at least $473,604 and $230,000 for at least a 10 year Veteran worth $ 1.4 million on account of the stoppage of 14- 15 game works. million to the league further adding that this loss will definitely affect the proposal to players in the shape of less lucrative offers.(MEGAGOGO, 2011) Negotiations and Resolutions; On Nov. 26, 2011, NBA owners and players reached a tentative agreement to end the 149 days’ lockout and hope to begin the delayed season on Christmas Day. For owners, they lost hundreds of millions of dollars in each year of the formal deal, ratified in 2005. In the new agreement, the owners won on the rate of spending. They got a much better cut of the basketball-related income about 50 percent annually vs. a high of 57 percent in some years under the older deal, and increased the luxury tax. However, there are not yet close the gaps on the salary gap and salary rollbacks. I will analysis about the effect on the new tentative agreement for the owners and players to support owners have upper hand. Conclusion: The research paper was intended to bring in notice the management aspects of contemporary corporate governance with primary focus to international business law and operational issues through the case study of NBA. The purpose behind the reference of laws and regulation is to demonstrate that the boundaries of political and social responsibilities are well defined for the global market sphere. Hence, the Code of ethics regulated via international business law in the global market mobilizes the growth and success on the global scale. NBA Union and owner reached at consensus on the agreement and reopened on December 9th. However, it must be kept in consideration that the purpose of the establishment of NLRB is to secure the interest of the Management and Union as well with honesty and transparency. Thus, there is no standard formula to gauge the accuracy and fairness of decision. The law only press on resolution with fair intentions. Although National Labour Act is primarily designed for labour but the induction of clauses of Unlawful strikes makes it evident that justification is the main parameter of negotiation. The issues that counter the right to work of the employees are addressed via NBLR but the power of authority can be used for negative influence or other reasons obstruct the two parties to reach at resolution can further bring organizational deterioration bringing in negative economic impacts. Thus, the various methods are adopted in such situation to reach at settlement that includes resolving impasse that is constant struggle of the two parties to reach at an agreed point without giving up; the other method used is that of mediation which includes an involvement of third party to assist in attaining the common agree point. In some cases interest arbitration becomes the only choice in which the interest arbitrator is a neutral third party who devises a method to approach at mutual interest point. In this method the interest arbitrator if sticks to conventional method propose a resolution that is to be accepted by both the parties. The other method used by interest arbitrator is that of final interest arbitrator offer by issue of by package. This method is rarely preferred because of the reliability on a third party. In the review of a survey conducted by US Chamber of Commerce on social media issues before the NLRB it was revealed that social media component plays an important role in the dealing with NLRB issues because of the intersection of traditional labor law and the social Media. Hence, investigation is under process to explore the contents to be highlighted for safeguarding transparency in execution.Invalid source specified. References 1 APICS (nd) APICS, [Online], Available: http://www.apics.org/default.htm [13 Oct 2011]. 2 Anthony (2011) Public Relation sWar begins during NBA Lockout, 6 July, [Online], Available: http://9450blog.blogspot.com/2011/07/nba-officially-locked-out-players-at.html [11 Dec 2011]. 3 BIS (nd) Selected Aspects of management and Organisational Structures 138, [Online], Available: http://www.bis.org/publ/othp04_9.pdf [13 Oct 2011]. 4 Bradsher, K. (2007) 'NBA makes a big move in China', NewYork times, 19 sep. 5 business, r.f. (nd) OPERATIONS MANAGEMENT , [Online], Available: http://www.referenceforbusiness.com/small/Op-Qu/Operations-Management.html [13 Oct 2011]. 6 Durant, R. (nd) 'Operations Management - leveraging talents from business, technology, finance', Best Thinkling, Available: http://www.bestthinking.com/articles/business_and_finance/leadership/leadership_principles/operations-management-leveraging-talents-from-business-technology-finance. ANTHONY. 2011. Public Relation sWar begins during NBA Lockout. [online]. [Accessed 11 Dec 2011]. Available from World Wide Web: MEGAGOGO. 2011. Losses incurred by NBA players due to Lockout. [online]. [Accessed 11 Dec 2011]. Available from World Wide Web: 7 8 Gartner (nd) IT Infrastructure and Operations Management, [Online], Available: http://www.gartner.com/technology/research/infrastructure-operations-management.jsp [13 Oct 2011]. 9 Insider, B. (nd) NBA, [Online], Available: http://www.businessinsider.com/blackboard/nba [20 Oct 2011]. 10 Internetbasket.com (nd) NBA looking to expand into India, [Online], Available: http://www.interbasket.net/news/7412/2010/12/n-b-a-looking-to-expand-into-india/ [22 Nov 2011]. 11 Megagogo (2011) Losses incurred by NBA players due to Lockout, [Online], Available: http://www.megagogo.com/?a=18577 [11 Dec 2011]. 12 NPR. 2011. NLRB Faces Off Against Boeing. [online]. [Accessed 08 Dec 2011]. Available from World Wide Web: Read More