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Lecture

MGSC05H3 Lecture Notes - Canadian Imperial Bank Of Commerce, Scotiabank


Department
Management (MGS)
Course Code
MGSC05H3
Professor
Andrew Stark

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MGTC45- Business Government Relations LECTURE 1
September 12, 2012
The capacity to deal with the government is something that is sought by companies regardless of industry
Regardless of the size of your business or what industry you’re in, the ability to deal with the government
is important, even if you don’t specialize in it.
Example
Four of the five banks tried to make mergers amongst themselves. They had to get approval from the
government to move forward.
The public media claimed that the banks were going to win this proposal, because they believed that the
big players of the economy would make it certain that would make it pass.
From a public policy point of view, many people believed it to be good with merging. One word is
globalization and the other is sovereignty. The internationalization of banking and economy made it
difficult for the 5 big banks to be a player, they needed to merge to become more influential. It also,
makes it more difficult for other global players from entering the Canadian banking market.
Conservatives are more concerned with business and market success.
Leftists are more concerned about nationalism; the reason is historically anti-american pro-canadian
control over government and business
NDP were having problems with the banking sector with the transaction fees, they would only have the
power over them if they are Canadian banks. As America banks they have other global options.
1. Framing Issues
a. They might have required banks to keep all branches, issue out loans to small
businesses
b. The banks were thinking in the shorter term, and they government did not like how they
were trying to take control. They were basically thinking in two different mindsets.
c. Paul Martin thought that they were trying to make it a fact of being by creating such a
buzz about the merger and all he had to do is say yes
d. They made an opponent of the person that was actually the obstacle in the deal. It was
an error that did not have to be made
e. The competition bureau also has to approve it, their approval can override the wishes of
the finance minister. They only have to see the consequences 2 years ahead anyway.
f. The lion’s share of the costs would be felt in those two years, the benefits would not
come until after the 2 years (closing of branches, closing of product lines, layoffs of
employees)
g. So the banks were thinking of the long term way of benefits outweighing the initial costs
h. These two conflicts of framing played a big part in the mergers
2. Political Issues
a. How do I get the most votes
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