Government Regulations - Essay Example

Research -Academia 21st April 2008 Table of Contents page no. Running Head .. 2 Main article: Strategic Decisions by Drug -supply -chain to control counterfeit drugs ..3 Intelligent conformation to solve Threat to Data Security System 5 Regulations on environmental issues and Actions by firms .6 Environmental Management in India 8 Summary .10 Title Head- "The Impact of Government Regulations on Overall Business Decisions" Regulations are made to promote health business environment. regulations promote COMPETITIVENESS IF accepted with spirit and without fear. Regulation is effective when this is incorporated into the POLICIES OF companies to guide effctive and strategic decisions Regulations should be enforced without being hindrance to growth. Abstract Regulations are needed in the economy for better governance. Government of a country is the main regulators to rein on the business practice going haywire. Regulations ensure a healthy regulatory environment and system in which every business entity functions within well-defined rules and business laws without fear of being duped or overruled by someone Better regulations are required to improve and simplify regulatory environment. Better regulations, regulatory reforms can make positive contributions to healthy competition in the business environment and result in competitive advantages to the business by the correct use of mix of regulations and regulators. Important point to remember while enforcing regulation is that it does not hinder the business functioning but improves it by promoting enterprises and innovations. Main body Strategic Decisions by Drug -supply -chain to control counterfeit drugs Pharmaceutical counterfeiting is an age-old problem. Counterfeit drugs are readily and cheaply available in need. Patients can't differentiate in between the fake and real drugs and fall easy prey to the counterfeiting. Counterfeit drugs pose health problems to public. It is necessary to prevent these fake drugs to enter the drug supply chain to become legitimate. The legitimacy has to be broken by attacking the chain and identifying the culprits. Through strict regulations, a relatively comprehensive system of laws, and enforcement by Federal and state authorities has kept drug counterfeiting rare in United States. Recently it is gradually raising its head again. Most of the countries worldwide could not fight the menace effectively.. This has put the genuine drug companies, wholesalers and retailers into big loss. Many that are involved in shady deals have to face legal actions and punishments. It is through accepting the problem, going into the depth and abiding by the government regulations firms in drug dealing and manufacturing could take strategic decisions to get rid of the problems. Strategic decisions by pharmaceutical companies in cooperation with FDA have been taken in USA to develop comprehensive framework for pharmaceutical supply chain to secure against threat of counterfeiting in drugs. Multinational pharmaceutical companies are developing inter-firm cooperation with supply chain and partnering with government and health advocates to work on the new methods to fight the problems. Track and trace method with the help of new technology of Radio frequency Identification (RFID) has been adopted to foil counterfeiting in drugs. The RFID would enable to tag all products by manufacturers, wholesales, and retailers which can't be altered easily and be verified when required with authentication It will make copying of medicines either very difficult or very costly to deter counterfeiting. Many other authentication technologies such as holograms, tag ants, fingerprints, color shifting inks, other chemical markers are to be used to embed drugs or the labels. FDA through timely guidance will prompt the decisions of drug companies to undertake changes in the identification and labeling from time to time. Policy guidelines, criteria development to support stakeholders to focus on frequent use of anti-counterfeiting technologies as effective as possible will be provided. Adoption and enforcement of strong and proven anti-counterfeiting laws and regulation by the states will be effective to change the licensing rules for wholesales drug distributors to make it difficult for the illegitimate wholesalers to enter into counterfeit drugs dealings. It will also regulate the drug distribution supply chain. FDA will involve all relevant institutions to facilitate in changing the system and business decisions by the channel. The business participants in drug supply change will adopt the new secure methods of doing business by ensuring legitimacy of the dealers in drug network and refusing to work with people of dubious records. The wholesalers will change the whole business procedures and will work in active association with FDA and other major participants of the drug supply chain to implement new business rules and disseminate the new business practice. There must be change in the whole process of overall business decisions by the drug manufacturing, supply chain, and retail network to help enforcement of government regulation. Until this change in the base decisions is effective no success in fighting the menace of counterfeit drugs can be achieved.(Combating Counterfeit Drugs: FDA) Intelligent conformation to regulation to solve Threat to Data Security System The need of compliance to new regulations emerging from every quarter is restructuring the business to operate altogether from a new platform. Data security system has been facing the need for compliance of regulation and Microsoft has taken up challenge to comply these regulations in an innovative way. Microsoft has put up white papers on 'The Access Control system' to help technical and business decision makers to understand the primary components of access control technology. It also explains how to develop and effective security strategy that can secure information asset and achieve proper compliance with the industry regulations. The solution is not system-wide compliance which is cumbersome but by mapping all regulations and their requirements to a single common framework. This framework will offer companies a comprehensive way to plan centrally and manage a comprehensive program compared to individual handling of each regulation. This action will be proactive and not reactive. A fundamental new approach is adopted to focus on all privacy and security needs on the framework and not on the regulations. This is innovative way to eliminate the suffering many had in adopting piecemeal and fragmented approach to compliance. This approach will emphasize on the need for a framework within the outline of this framework will describe how the Microsoft Windows Access control technologies can be used to develop legal compliance. Regulatory compliance poses challenges to organizations but they are beneficial too provided adequate steps by right business decisions taken to answer those as Microsoft did by mapping all regulatory requirements to a comprehensive framework and thereafter-applying Microsoft Access Control technologies to the new framework. (Business Solution- Compliance) Regulations on environmental issues and Actions by firms Environmental problems are attracting attentions of the regulators in every country of the world. The problem has taken new dimension in developing countries today. Therefore plenty of government regulations are there to control the misuse of environment. Growth and development cannot be based on taxing the environment that will have acute repercussions in the future. Companies are not expected to invest their costly money on environmental problems because they are answerable to company shareholders for profits earning. However regulations on this front are there to tackle deterioration in the environment standards that are likely to damage the future profitability of these commercial companies. Environmental problems must be managed keeping the strong business perspective in view. Cost-benefit analysis should guide the managers while taking up the environmental issues. Corporate environmental policies should include measures on energy conservation or recycling that can reduces costs, reduction in the possibility of accidents in factories, introduction of environment friendly products or process, producing environmentally friendly goods and creating good image in the market. Example of a Swiss company is relevant here, which manufactured dyes. The company researched a new specialty chemical dyes that helped consumers to cut on expenditure on salt and water treatment and improve on quality. The product differentiation enabled the company to charge higher and maintain a better friendly environment too. Many companies accomplished conformation to improved environmental standards by process innovations that reduced consumptions of raw materials or energy in the process. Hotel industry is example, which reduced generation of solid waste and water and energy consumption. The flower industry in Dutch similarly faced regulation for contaminating soil by use of pesticides and fertilizers in course of cultivation. The industry adopted new strategic decision to use closed loop system to reuse water. In certain process soil was not used for cultivation but in water and rock wool. The process of greenhouse cultivation improved the growing conditions and product quality. This not only improved the environmental performance but also cut the cost down directly in cultivation and indirectly in developing new methods with experienced manpower with better productivity and lesser training. Since the cost involved in environment mishaps like accidents, catastrophes, is very high it can be avoided by special care. The Bhopal gas accident in the plant of Union Carbide in India is ripe in which the cost of litigation, compensation was very high. Such cases of tragedies have to be handled carefully to reduce costs. The management must minimize the probability of occurrence of the adverse event. The management must cut losses when an accident occurs. The simplest way to manage environmental risk is to buy an insurance policy. (Tying Environment to Strategy, Venugopal) Environmental Management in India Environment practice in India has now become a serious issue. Many Indian companies took the problem very seriously and they are ready to abide by regulatory measures by taking up strategic decisions at managerial levels. Most of important companies had serious environment policies on their agenda and were ready to stand out in upgrading their performance on this serious subject. For example the chemical giant Bayer India took important business decision to buy incinerators towards tackling environmental problem though the company did not use 100% of its capacity for its own plant. The company recovered the cost by leasing it out to others. Clariant India adopted waste reduction process that helped to cut water consumption and waste disposal cost. Philips India followed the environmental measures by switching over to argon flushing in the tube light they manufactured in Pimpri plant from its earlier flushing with 70mg of mercury. The process curtailed the cost of flushing and reduced the environmental hazard of mercury fill. Tata Steel plant has improved its environment practice by better utilization of waste in the plant and by consuming fewer raw materials. The company adopted afforestation program that was appreciated by local people. Indian Rayon helped in managing environmental issue by utilizing waste to add value to its products. For example, scrubbing hydrogen sulfide with caustic soda produces Liquid Sodium sulphide. The waste chlorine gas coming out from the caustic soda manufacturing process is converted into sodium hypo chlorite. This is used as a bleaching agent in rayon manufacturing. The company uses hydrogen gas, which is one of the cleanest fuels, for the flaker furnace for producing caustic flakes. The company has upgraded the Effluent Treatment Plant, to generate methane rich biogas. This can be used to generate power. At the Carbon Black Plants innovative vent scrubbers seal the venting of carbon black. Here gases is used to convert into power Hindalco the aluminum company has very good environmental management strategy. Through which the company encompasses its manufacturing process with environmental concerns.. They track the performance against detailed environmental metrics Another good example is Gujarat Ambuja Cements, which operates in an Environment-unfriendly industry. Both raw materials mining and cement manufacturing have a harmful impact on the environment. The clinker-grinding unit of Ambuja cement plant uses fly ash waste product from thermal power plant. At every step of the production chain the plant has installed safe guards to keep emissions negligible. The clinker for the plant is transported in covered trucks. Summary Government regulations have to be viewed from business angle by firms. By positive changes regulation are guaranteed to impart benefits to companies in the long run provided they resort to positive and strategic decisions to enforce the regulations willingly and implement changes. Government regulations prevails in every important segment of economy- pharmacy, environment, IT or other to promote healthy business environment but it is the adoption by firms in their business policies and strategic decisions these can be enforced. The firms have to analyze to find which investments can generate value and imparts benefits to the company. By simply staying on the right side of the law will not be sufficient. Every company has certain social responsibility to perform. Environmental regulations may not give opportunity to make money always but in the long range it would pay. According to Harvard Business Review the international standard specifies requirements for an environmental management system, to enable an organization to formulate a policy and objectives taking into account legislative requirements and information about significant environmental impacts. It applies to those environmental aspects, which the organization can control and over which it can be expected to have an influence. Environment issues should integrate with corporate strategy, environmental strategies must become the concern of management in the firm, it should create impact in the overall process of improving productivity and competitiveness. All managers should look for opportunities to improve upon at all stages of execution independent of the regulatory framework. Only then regulations will pay in the long run. References: "Combating Counterfeit Drugs: A Report of the Food and Drug Administration. www.fda.gov/oc/initiatives/counterfeit/report02_04.html - 128k - Business Solution- Compliance http://www.microsoft.com/businesssolutions/compliance.mspx http://home.businesswire.com/portal/site/google/index.jspndmViewId=news_view&newsId=20050829005403&newsLang=en Business Strategies for Managing Climate Change and Sustainability. Middlesex University Press, London, pp. 101-118. Last Updated: September 27, 2007 www.eoearth.org/article/Business_strategy_and_climate_change Vedpuriswar, AV Tying Environment to Strategy www.vedpuriswar.org/articles/Management/Tying_Environment_to_strategy.pdf - Harvard Business Review, July-August 1999, National Library, Calcutta Read More