Question

For the following policy proposals, explain if entity or enterprise approach is the best to address the issue.

1. Global corporate taxation
2. Policy to minimize the use of child labor in manufacturing goods
3. Policy to prevent corruption practices by a corporation

Answer 1

Global Corporate Taxation: The Enterprise approach would be suitable in this case for the matter of fact that taxing corporations globally can would reduce the workload of calculating taxes entity wise but rather on the overall revenues earned by a corporation as an enterprise to be calculated in any particular reserve currency ( any currency that can be traded beyond the borders of a sovereign ) such as the US Dollar, the Euro or the Japanese Yen and then be taxed in that a reserve currency so that flow of money globally between sovereigns and burden on the existing sovereign taxation systems can be eased and their leakages controlled with the availability of a global oversight on the international flow of money.

Policy to minimize the use of child labor in manufacturing goods: The Entity approach would be rather easier to pursue with regards to this matter as this is a particularly specialized policy that talks of only manufacturing units which excludes real and financial services completely from the purview of the policy and also the fact that many enterprises or corporations are conglomerates that serve us through a multitude of ways including manufacturing goods and services. Thus the enterprise approach in such a specialized policy would hurt the ease of doing business globally due to sanctions or litigations arising out of such a policy involving particular units within large enterprises thereby hurting general economic conditions. On the other hand the entity approach would allow us to pinpoint in particular manufacturing units involved in use of child labour and thereby segregating such cases and take required specialized measures to reach the goal of minimization of use of child labour in manufacturing units.

Policy to prevent corruption practices by a corporation: The Enterprise approach would draw a real wedge at the heart of corruption because corruption is in most cases systemic and requires an overarching authority and coordination throughout all levels of the corporation to really make a difference in the underlying hidden corrupt practises such as developing whistle-blowing policy models whereby someone can call out any corrupt practises from any position without having to fear any colleagues or senior officials by being able to access even the board members or directly in the shareholders meeting, or policies involving segregation of departments having conflicts of interest such as leakage of information from one to other and also to be able to track connections between sources of corruption throughout a corporation, the policy makers must take the enterprise approach.