Regulatory Framework and Legal Issues in Business

1
Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

Module 3 Regulatory Process: Regulatory Landscape of Business

Organization and Regulating Competition or the Anti-Trust Law

At the end of this module, you are expected to:

1. Cognitive: Familiarize one’s self with terms and concepts associated with
Regulatory Landscapes in Business and Business competition
2. Affective: Relate the importance of Regulatory Landscapes and
Competition to actual business setup
3. Psychomotor: Display understanding of actual business situations
emphasizing the role of Regulatory Landscape and Competition in the
corporate world

Regulatory Landscapes: An Overview

Business is business. It is well-thought-of, planned, and organized by everyone who is
involved with it. We have already reached the era of advanced technologies and think that it is
already a factor being considered in creating or formulating landscapes that businesses opt to
follow or use as guidance as their enterprises grow from one level to another. Current events,
situations, and types of people are just some of the many considerations business runners should
look into whenever they put up a new business enterprise.
Regulatory Landscapes can be looked into as mapped out plans if a problem or risk arises.
The year 2020 opened up the possibility of higher risks that will greatly affect businesses if not
handled and blocked properly due to the global pandemic and the changing economic status of
every nation in the world because of numerous changes and unexpected happenings this year. The
emergence of change is inevitable. It truly is something we cannot avoid nor ignore.

Figure 1: Looking ahead of what changes may bring to the business.

[Link]
y%2Fthe_next_phase_of_business_sustainability&psig=AOvVaw0IRb_cXo2-
3hpXn0pfmgb&ust=1602084141655000&source=images&cd=vfe&ved=0CAIQjRxqFwo
Course Module
TCIDvgtG3oOwCFQAAAAAdAAAAABAd. October 6, 2020
 Regulatory Framework and Legal Issues in Business
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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

Regulatory Landscapes of Business Organizations all over the World

There are a lot of business organizations in the Philippines, even more, in the
different parts of the globe. Each business is different from the other. It is understandable
that these businesses follow different Regulatory Landscapes to cope with the risks that
changes in different aspects of the business may bring.
As it was stated that regulatory landscapes could be different from each other in
every part if the world, some businesses may be subjected to strict rules compared to
others. Despite these facts being said, according to Jim Low of Risk and Regulatory Centre
of Excellence in America Region, what is important to keep in mind by enterprises and
companies, is to develop a “Strategic Initiative” to counter the impact of the drastic
change happening during these times. Also, it was said by Simon Topping of Risk and
Regulatory Centre of Excellence in ASPAC Region that it is also relevant that companies
understand “the new world order”.
Below is a diagram that shows the different aspects of a regulatory landscape that
businesses, enterprises, and companies should take note of.

Figure 3. Different aspects of Regulatory Landscapes.

[Link]
siness-perception-of-regulatory-burden-frank-peck-
cred&psig=AOvVaw1tnDTrPE2XCovtuvIS92RR&ust=1602124957791000&source=images&cd=vfe&ved=0CAIQjRxq
FwoTCLDgzdbPoewCFQAAAAAdAAAAABAP. October 7, 2020

As shown in the diagram above, three aspects of regulation constitute a Regulatory

Landscape, according to the research made by the University of Cumbria. These include:

Course Module
 Regulatory Framework and Legal Issues in Business
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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

1. Traditional Regulation
Traditional regulation, coming from the word traditional, meaning it is
conventional, as it existed too many years back in time. This involves
regulations coming from the public sector, the government per se, to make
up national regulations and the treaties, agreed-upon nations, which
constitute the international regulations.
2. Co-Regulation
Co-Regulation, from the word itself, co-, meaning a joint effort or partner
regulators act upon a role in keeping businesses afloat during times of crisis or
drastic changes. This includes the regulations coming from intergovernmental
organizations like United Nations and World Bank, corporations, non-governmental
organizations like Greenpeace or the World Wildlife Fund, and other parties like
insurance companies, e.g., Insular Life insurance, Manulife Insurance, BPI-Philam
Life Assurance Corp., Inc. (BPl-Philam)
3. Self-Regulation
As the term suggests, self-regulated regulations will come from the business
enterprise itself, which are barely associated or related with public influence and
actors.

How to navigate the changing landscape in the business environment?

It was mentioned a while ago by Jim Low, an expert in business regulations of Risk
and Regulatory Centre of Excellence in America Region, that companies or businesses
should develop a “Strategic Initiative” to survive the dynamic business world.
Below is a diagram showing a strategic context on what is actually the sole purpose
of Business Organizations and the things that should be considered in keeping it afloat
despite risks of the changing business scene.

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 Regulatory Framework and Legal Issues in Business
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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

Figure 3. Framework in navigating dynamic business landscapes.

[Link]
t%2F2017%2F08%2F01%2Fnavigating-the-changing-landscape&psig=AOvVaw0IRb_cXo2-3hpXn0pf-
mgb&ust=1602084141655000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCIDvgtG3oOwCFQAAA
AAdAAAAABAX. October 7, 2020.

In order to navigate the changing business landscapes being used all over the world, we
should always keep on thinking that “Prevention is always better than cure.” It is much
better to think ahead than to think behind. Businesses need to have strategic initiatives to
endure the impact of the changing world to cater to the needs of its consumers.
We should know that Business Organizations exist for there are consumers.
Consumers buy the reason why things are being done and not what was done, function vs.
material, according to Simon Sinek, as cited from Buhlebenkosi Consulting. Consumers are
very particular about the function of the product. Will they be really using it to make their
lives convenient, or will they be able to use it for a very long time or not? Those are the
things that consumers ponder upon purchasing something, so as business owners, we
should always be prepared to meet the demands of our consumers, given the dynamic
circumstances happening today.
As it was shown in the diagram from the previous page, there are five things to
consider in navigating changing business landscapes in the different business
environments, as cited from an article written by Blessing Mdladla in the Buhlebenkosi
Consulting website. These include the following:

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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

1. Disruptive Innovation
Innovation is just right in the corner. Things innovate so fast, so as, business
strategies and ideas. In order to keep the business, you should be able to expect that
your business might get affected by a disruptive innovation of a particular business
competitor. From that expectation, you have to draw to plans. What are you going to
do as a company or enterprise not to lose loyal customers to a business competitor?

2. Changing customer
As time ages, it also produces a new breed of customers or consumers.
Because of the rapid change in technology, it is easier for consumers to weigh which
product or service is worth spending for. The tastes or preferences of customers
nowadays are getting more meticulous than it was ever before. What should a
business do to jive with the demands of the digital age?

3. Regulation and Regulators

Another thing to consider was the existing regulations and the regulators
themselves. Are they enough to keep the business going? Neither were those
regulations not lacking or overregulated? Were the regulators honest in doing their
duty? These things greatly impact the business status when a crisis comes. This can
either do the business or break the business.

4. Technological advancement
Technological advancements are one of the reasons why business booms, but
it can also be the reason why a business may face its downfall. That will happen
when the business cannot keep up with the shifting demands of products and
services involving advancements in the aspect of technology. They will be left
behind as consumers grow fondness on demands that are a new and convenient
cause of technology.
5. Changing market and economic environment
Due to unexpected happenings in the world today, the market and economic
environment are affected. A mall which was open till 11 pm in the evening no longer
last that long and numerous sales are on-going. Though these may seem something
we should be happy about as shoppers, these actually affect the sales and profit of
the shops renting inside that will say a lot about the condition of the market and
economic environment of the nation. It really is challenging to be an entrepreneur
today, but we have to come up with strategies on how to bounce back despite all.

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 Regulatory Framework and Legal Issues in Business
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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

What dominated the 2020 Regulatory Landscape of Business Organizations?

It is not out of our conscious mind that 2020 has been a challenge to everyone, more
so to the business industry. As 2020 remains challenging, it is not also shocking news that it
will leave a lot of to the business owners and that the struggle will continue. Let us find out
some aspects that businesses have focused on during these trying times.

Figure 4: People in 2020.

[Link]
mci%2Fgraduation2020&psig=AOvVaw1A9DkhaHxMH2RIGZRyx0Y2&ust=16021620
29794000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCIjPh_jZouwCFQAAAAAdA
AAAABAD . October 7, 2020

This year’s regulatory landscape of business organizations was dominated by the

following themes as it was stated in an article cited from [Link] authored by Marc
Saidenberg et al.
1. Operational resilience
Operational resilience has been a focus this 2020 for issues in
information technology have emerged, just like cyber security and IT failures.
This may have been driven by the mobilization of systems and data due to the
on-going pandemic that forced people to work from home.

2. Environmental, Social and Governance criteria, and Societal Issues

The emergence of crisis also paved the way for societal issues to come out
on the surface and be talked about. Even the ESG criteria which were used to
measure if an investment is sustainable and ethical, also undergone a whole new
challenge. Unexpected events set new expectations for business enterprises in
maintaining a sustainable and ethical environment.

3. Evolving and emerging of data and technologies

This year, AI or Artificial Intelligence and MI or Machine Intelligence have
been the subject of the spotlight for most businesses shifting to AI and MI
controlled systems. Because of this, business experts are trying to anticipate and
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 Regulatory Framework and Legal Issues in Business
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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

prepare for the risks that the use of AI and MI in carrying out business processes
may bring.

4. Post crisis issues

When the crisis finally comes to an end, it doesn’t mean it is also the end
of struggles for the business industry. The business industry still needs to work
on and enhance policies and regulations in order to avoid business-related
crimes.

Guide Questions:
Answer the following to check what you learned from the discussions so far. Check your
answers from the provided answer key at the end of this module. There is no need to submit
your answers to OEd.
1. What do you think was most the most emphasized priority of the business industry this
year? Why?

2. What role does the regulatory landscape play in carrying out the whole business
process?

Regulating Competition or Anti-Trust Law

Competition is unavoidable in the business industry. Regardless of how unique and original
your business idea may be, competitors will still emerge and try to compete with you in the
business. This aspect of the business is also being regulated abided by the contents of the law.

Figure 5: Business entrepreneurs competing with each other to reach the summit of business success.
[Link]
2Fnew-markets-the-value-of-a-competitive-analysis%2F&psig=AOvVaw1Xy-
80yZFz5aL1vppWe4Ic&ust=1602165804088000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCJj8
teznouwCFQAAAAAdAAAAABAD. October 7, 2020

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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

What is Business Competition?

Business competition is the rivalry between two or more companies or business
enterprises of the same field and industry who offer the same products and services. Some
who are not really that immersed in business might take competition as something that is
fully negative, yet it is not. One of the common misconceptions with business competition is
that it just causes one business sale to drop down or it just divides the attention of the
consumers, but no. Business competition actually contributes a fair share of beneficial
effects to the business industry, and we are going to discuss that in the latter part of this
module.

Types of Business Competition

Competition doesn’t just come in a single form. It comes in 4 major types, namely:
1. Perfect Competition
A competition is perfect when:
• Products are alike, homogenous or a commodity
• If all firms don’t have any control over the market prices of their
products
• Consumers know everything about the product being marketed
• There is no cost for entrance and exit in the market
• Prices are not influenced by market shares
• Labor resources should be mobile
Example:
Foreign Exchange Industry

Figure 6. Foreign exchange industry as an example of perfect competition

[Link]
m%2Fblog%2Findustry%2Ftips-to-save-money-on-your-foreign-
currencyexchange%2F&psig=AOvVaw1_e0UycopswAfmTDrFeata&ust=16021705
82212000&source=images&cd=vfe&ved=0CAIQjRxqFwoTCODD6dL5ouwCFQAAA
AAdAAAAABAD. October 7, 2020

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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

2. Monopolistic Competition
A competition is considered a monopolistic competition when:
• There are many sellers
• Products have variations though they serve a similar purpose
• Has little power in raising product prices
• There is a strong advertising strategy being laid out

Example:
Restaurants

Figure 7. Restaurants as example of Monopolistic Competition.

[Link]
Fblog%2Fon-the-line%2Frestaurant-promotion-
ideas&psig=AOvVaw1qPJ4Ll6XZF3X3lnjNWHvu&ust=1602170994060000&sou
rce=images&cd=vfe&ved=0CAIQjRxqFwoTCLC9vJj7ouwCFQAAAAAdAAAAABA
D. October 7.2020

3. Oligopoly
A competition is considered oligopoly when:
• There are few sellers
• Firms supply large amounts or portions of products
• Formation and dissolution are greatly influenced by economic, legal,
and ethical factors
• Somewhat restricts fixed prices for greater returns

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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

Example:
Airline Industry

Figure 8. Airline Industry as an example of Oligopoly.

[Link]
om%2Fbusiness%2Flow-cost-carriers-drive-aviation-
growth&psig=AOvVaw3PWZVz0kT5PkxaRfXq-
2Ni&ust=1602171477630000&source=images&cd=vfe&ved=0CAIQjRxqF
4. Monopoly woTCOjG2fz8ouwCFQAAAAAdAAAAABAD. October 7, 2020

A business is considered a monopoly if:

• There is only one seller.
• Barriers of entry are very high.
• Seller decides the price of the service or product

Example:

Figure 9. Microsoft as an example company that exercises Monopoly.

[Link]
eu%2F2020%2F07%2F02%2Fmicrosoft-full-time-customer-facing-
technologies-opportunity-students-recent-
graduates%2F&psig=AOvVaw0ZI6bAE9LSi-jmnlbBUD-
M&ust=1602172058958000&source=images&cd=vfe&ved=0CAIQjRxqFwo
TCLiA-JH_ouwCFQAAAAAdAAAAABAO. October 7, 2020

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 Regulatory Framework and Legal Issues in Business
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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

Advantages and Disadvantages of Competition in Business

It was mentioned in the former parts of this module that competition in business is
not all thorns and struggles; instead, it also paves the way for many beneficial effects. Let us
take a look at the advantages and disadvantages of competition in both business and
consumer.

Advantages of Competition
• Awakens the drive of the business to step up and improve products and
services
• Prices of products drop
• Consumption rate will increase
• Better products are being developed cause of product differentiation
• Boosts awareness that a certain product exists and available to be consumed
• Increases company profits due to low cost in manufacturing the product
• Consumers get to have more options.
• Consumer needs will most likely be met.

Disadvantages of Competition
• Reduces market share
• Purchasing decision will be complicated for consumers
• It may shrink small businesses.
• It may discourage or intimidate other would-be businesses to operate.
• May lead to customer exploitation

Guide Questions:
Answer the following to check what you learned from the discussions so far. Check your
answers from the provided answer key at the end of this module. There is no need to
submit your answers to OEd.
1. Why do you think competition is important in the business environment?

2. What do you think will be the future of the business environment of the
Philippines if healthy competition will not be exercised anymore?

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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

Regulatory Process: Regulatory Landscape of Business Organization and

Regulating Competition or the Anti-Trust Law

Regulatory Landscape: An Overview

1. What do you think was most the most emphasized priority of the business industry this
year? Why?
(Answer to this is based on the student’s perspective aligned to the content discussed in
this module)

2. What role does the regulatory landscape play in carrying out the whole business
process?
It serves as the guiding plan of businesses in anticipation of any unexpected
crisis to come in the industry. Through the regulatory landscape, the loss will not be as
great as it will be when business entities are not prepared.

Regulating Competition or Anti-Trust Law

1. Why do you think competition is important in the business environment?

(Answer should be based on the beneficial effects or advantages of competition to both

business and consumer)

2. What do you think will be the future of the business environment of the Philippines if
healthy competition will not be exercised anymore?

(Answer to this is based on the perspective of the student, but the explanation should
justify his/ her answer, with evidence aligned to what was discussed in this module)

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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

References and Supplementary Materials

Online Supplementary Reading Materials
1. 5 Big Regulatory Changes That Could Affect Your Business;
[Link] October 6,
2020

2. 6 Reasons competition is good for Business – Benefits of competition;

[Link] October 8, 2020

3. Advantages and Disadvantages of Competition in Business;

[Link]
bus/; October 8, 2020

4. Building Regulatory Ready Organizations;

[Link]
regulatory-ready-organizations/DUP_Building-[Link];
October 6, 2020

5. Business Competition: Definition, Types, Importance & Examples;

[Link]
,What%20Is%20Business%20Competition%3F,share%20as%20compared%20to%2
0others; October 7, 2020

6. Business Competition: How Connecting With Competitors Is Actually Good for

Business; [Link]
competition-how-connecting-with-competitors-is-actually-good-for-business-
02056300; October 7, 2020

7. Four major themes dominating the regulatory landscape in 2020;

[Link]
dominating-the-regulatory-landscape-in-2020; October 6, 2020

8. How Competition Works;

[Link]
site/youarehere/pages/pdf/FTC-Competition_How-[Link]; October 8,
2020

9. Life Insurance; [Link] October 7, 2020

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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

10. Monopoly; [Link] October 7, 2020

11. Monopoly Examples; [Link]

October 7, 2020
12. Monopolistic competition; [Link]
economics/chapter/monopolistic-
competition/#:~:text=Textbook%20examples%20of%20industries%20with,differen
tiated%20products%20and%20market%20power; October 7, 2020

13. Monopolistic competition;

[Link] October 7, 2020

14. Navigating the changing landscape;

[Link]
changing-landscape; October 7, 2020

15. Oligopoly; [Link] October 7, 2020

16. Oligopoly Examples; [Link]

October 7, 2020

17. Perfect competition;

[Link] October 7, 2020

18. Regulatory Change Management Preparing for an Uncertain Future;

[Link]
[Link]; October 6, 2020

19. Regulatory landscape provides added incentive for enterprises to explore

blockchain; [Link]
[Link]; October 7, 2020

20. The global regulatory landscape, A parting of the ways?;

[Link]
[Link]; October 6, 2020

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Regulatory Process: Regulatory Landscape of Business Organization and
Regulating Competition or the Anti-Trust Law

21. Understanding Antitrust Laws;

[Link]
[Link]#:~:text=Antitrust%20laws%20are%20statutes%20developed,%2C%20price
%20fixing%2C%20and%20monopolies; October 7, 2020

22. What is an intergovernmental organization?;

[Link]
C%20or%20the%20European%20Union; October 7, 2020

23. Anti-trust federalism, preemtion,and judge -made [Link] from;

[Link]
rchResultsType=SingleTab&hitCount=7914&searchType=BasicSearchForm&current
Position=1&docId=GALE%7CA633072630&docType=Article&sort=Relevance&cont
entSegment=ZONE-
MOD1&prodId=AONE&pageNum=1&contentSet=GALE%7CA633072630&searchId
=R48&userGroupName=phama&inPS=true

Online Instructional Videos

1. Discussion of Regulatory Landscape in Business; [Link]
October 7, 2020

Course Module