Case Study 4

 A manufacturing company provides jobs for many people in a small town where employment is not easy to find. The company has stayed in the town even though it could find cheaper workers elsewhere, because workers are loyal to the company due to the jobs it provides. Over the years, the company has developed a reputation in the town for taking care of its employees and being a responsible corporate citizen. The manufacturing process used by the company produces a by-product that for years has flown into the town river. The by-product has been considered harmless but some people who live near the river have reported illnesses. The by-product does not currently violate any anti-pollution laws.

Question:

What are the issues of integrity, ethics and law posed in the case study? What options does the company have, and what should it do and why? 

Case Study 3

 In Germany in 2009 there was considerable debate about the extent to which the government should be intervening in the economy. For example, its citizens were worried about the future of Opel, a German car brand that was part of the ailing General Motors. Some wanted the government to make sure jobs were saved no matter what. Others, however, were more hesitant and worried about becoming the government becoming too interventionist. Traditionally since the Second World War the German government has seen itself as a referee in market issues and has avoided trying to control parts of the economy. It would regulate anti-competitive behavior, for example, but not try to run many industries. However, in the recession of 2009 when the economy was shrinking the government was forced to spend more to stimulate demand and had to intervene heavily to save the banking sector from collapse. The government also had to offer aid to businesses to keep them alive. 

Questions:

What are the possible benefits of a government intervening in an economy? 

What are the arguments against government intervention in an economy? 

What prompted greater intervention by the German government in 2009? 

What would determine whether the German continued to intervene on this scale in the future

Case Study 2

 Firms in India are losing productivity because of Facebook. Office staff are spending too long on the social networking site. According to The Associated Chambers of Commerce and Industry (Assocham) employees use Orkut, Facebook, Myspace, and LinkedIn for "romancing" and other purposes. On average, employees spend an hour a day on sites like Facebook. This reduces productivity by 12.5%. Nearly half of office employees accessed Facebook during work time. Some 83% saw nothing wrong in surfing at work during office hours. In September 2009 Portsmouth City Council in England banned staff from accessing Facebook on its computers when it was discovered that they spent, on average, 400 hours on the site every month.

Questions:

What is meant by productivity? 

Analyze the impact on a fall in productivity on costs. 

Analyze the possible consequences for businesses in India of banning access to Facebook and other social networking sites. 

Do you think access should be denied? 

Case Study- 1

 

Many European governments are reluctant to allow online betting in an attempt to protect their national gambling businesses. A recent study found that seven countries out of the 27 in the European Union banned online gambling. Of the other 20 only 13 have opened their markets to competition; in the rest gambling is dominated by monopolies owned or licensed by the government. In the Netherlands, for example, residents can only place online bets with a state monopoly: De Lotto. The Ministry of Justice even warned banks in the country that they could be prosecuted if they transferred money to online gambling companies. Other countries have ordered online betting companies to block access to their sites. Their governments argue that this is to protect people from gambling excessively. However, the revenue they gain from their own monopolies should not be ignored as a possible motive. 

Questions:

If governments believe that gambling is bad for their citizens, then in economic terms how would you classify this service? 

Why might governments want to protect their own monopolies in the gambling sector? 

What might be the effect of greater competition in the gambling industry in these countries?

TikTok’s Global Regulatory Shifts and Strategic Adaptation

1. Background

TikTok, owned by ByteDance, has faced intense scrutiny worldwide due to concerns about data privacy, national security, and its ties to China. Governments have questioned whether user data could be accessed by the Chinese state, leading to regulatory crackdowns and threats of bans.

2. The U.S. Regulatory Challenge

• Situation: In 2024, the U.S. Congress passed a law requiring ByteDance to divest TikTok or face a nationwide ban.

• Resolution: After multiple extensions, a $14 billion divestment deal was finalized in January 2026.

• New Structure: TikTok’s U.S. operations were spun off into TikTok USDS, backed by Oracle, Silver Lake, and MGX (Emirati investment firm).

• Outcome: TikTok avoided a ban, but now operates as a separate U.S. entity distinct from the global version.

3. Lingering Security Concerns

• Despite divestment, ByteDance retains ~20% ownership and continues to control the recommendation algorithm, raising questions about influence.

• Congressional scrutiny persists, with demands for transparency on how much control ByteDance still holds.

• This highlights the political risk of operating in sensitive markets where national security concerns dominate.

4. Business Performance Amid Turmoil

• Recognition: Named one of TIME Magazine’s 100 Most Influential Companies of 2026.

• Revenue: U.S. ad revenue projected at $17 billion in 2026.

• E-commerce Expansion: TikTok Shop has grown to rival eBay, transforming TikTok from a social media app into a major e-commerce player.

• Lesson: Even under regulatory pressure, TikTok leveraged its massive user base to diversify revenue streams.

5. Global Regulatory Compliance

• TikTok is proactively adapting to international laws.

• Example: In April 2026, TikTok deactivated 1.7 million underage accounts in Indonesia to comply with new child protection regulations (PP Tunas).

• This demonstrates a compliance-first strategy to avoid bans and maintain legitimacy in diverse markets.

6. Key Takeaways

• Regulatory Risk Management: Divestment in the U.S. shows TikTok’s willingness to restructure to survive.

• Ongoing Vulnerabilities: ByteDance’s retained stake and algorithm control remain flashpoints for political debate.

• Business Resilience: Despite challenges, TikTok continues to thrive financially and expand into e-commerce.

• Global Strategy: Compliance with local regulations (like Indonesia’s child protection law) is essential for sustaining global operations.

Discussion Questions

1. Was TikTok’s $14 billion U.S. divestment a genuine solution to national security concerns, or simply a political compromise?
2. If ByteDance still controls TikTok’s recommendation algorithm, does the U.S. divestment truly reduce security risks?
3. How should multinational tech companies balance compliance with diverse international regulations while maintaining a unified global product
4. Could TikTok’s case set a precedent for how other foreign-owned tech companies are treated in politically sensitive markets?