What's Ahead For Big Corporations
Over the past couple of years, major corporations in the United States have seen the landscape around them shift. During the financial crisis of 2008, large corporations were in a state of turmoil. After the dust settled, they found themselves faced with government officials that wanted to both curtail their activities, while also growing the economy. This created an odd limbo that the leaders of these companies needed to face. Since then things have settled down on a little bit, and more changes may be on the horizon.
What Happened: After the financial crisis, several laws were put into place to try and reign in big businesses. At the center of this was the Dodd-Frank Bill. This set of provisions did many things that altered the way that companies could conduct business. It focused mainly on financial institutions, and the goal was to prevent another financial collapse in the future. Opponents of the bill said it went too far, and that it was simply an overreaction to the financial collapse. On the other side, proponents argued that large financial institutions had had too much leeway for far too long, and without these reforms another collapse was inevitable.
Big financial institutions were not the only ones impacts by the fallout of the financial crisis however. Because of the poor economy, thousands of people were laid off. This resulted in less spending in other areas, and eventually the economy slowed to a crawl. Every industry was hit in some way, and many people outside financial institutions were laid off. It took several years for things to finally start looking up, and unemployment is now at the lowest rate it has been in years.
What’s Happening: However, not all major corporations are in the clear yet. The financial crisis is still fresh in everyone’s mind, and a tighter watch is being kept on the proceedings of these large companies. For example, just recently two class action lawsuits were filed by the law firm Robbins Geller against IBM and Alibaba, an online merchant. In the case against Alibaba, Robbins Geller asserts that they committed fraud by not informing their investors of a meeting they had with the Chinese Government, after the government released a report saying that Alibaba was selling fraudulent good and conducting poor business practices. In the case against IBM, the law firm says that they misled their investors by over stating the value of their microchip manufacturing operations, which caused the stock price to inflate. While the law firm has an uphill battle to prove fraud in either case, it shows that a close watch is being kept on these large businesses.
Besides the lawsuits, large corporations are also going to have to deal with a new trade agreement that is in the works. The TPP, or Trans-Pacific Partnership, is an agreement between the US and nations along the Pacific such as China, Canada, and Japan. If this trade agreement is signed, it would impact about 40 percent of US trade. It would put stricter laws on things like workplace conditions and copyright laws, but it would also give large companies the right to change local laws. Some fear that this could lead to large corporations bullying smaller nations, and much debate has ensued over this trade agreement. However it turns out though, it will have a large impact on how businesses are run.
While the everyday lives of most Americans may be going back to normal after the recession, it is anything but business as usual for many large corporations. They are dealing with an every changing landscape, and must find ways to continue to operate despite things changing around them. We can’t say what is in store for these corporations, but we know they better be ready to adapt to anything.