How Regulatory Bodies Affect Financial Decision-Making
Regulatory bodies in finance are domestic, national, and international bodies or agencies that establish policies, which businesses are required to follow. With Starbucks worldwide presence, regulatory bodies on every level affect the corporation. The Federal Trade Commission and the Security Exchange Commission are national regulatory boards that have an effect on the financial decisions at Starbucks.
The SEC sets laws and regulations that companies must follow. Starbucks has worked hard to keep the financial stability of the company public and correctly states the company’s financial position. Starbucks’s posts financial reports on their company website for the public to review. Starbucks has refrained from being in the public eye in a negative manner because the company has complied strictly with the SEC rules and guidelines. This keeps customers coming back, investors, and employees to stand behind the company. Although Starbucks is a larger company, some larger companies that did not follow the SEC regulations like Enron, WorldCom, and Tyco had some ethical financial troubles.
International regulators based on the agreements made between various countries such as the General Agreement on Tariff and Trade (GATT) Treaty, which established the World Trade Organization (WTO); also regulate Starbuck’s financial decisions. GATT affects tariffs on costs of services and operations between countries and the WTO assist with any disputes between countries.
Starbucks has 400 places serving coffee in China and forecast that 20% of their revenues will come from these China coffee shops. Taking current regulations for a specific location whether national, international, or domestic are items Starbucks should consider when considering international investment contracts because these will affect the operation and financing of the investments. Starbucks, Transfair USA, and Fairtrade Labelling Organizations (FLO)...
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