MGB340 Report: Telstra's International Business Strategy in Asia

This report provides a comparative analysis of the Australian and Singaporean economies, focusing on the political and economic factors influencing Telstra's international business strategy in the Asia Pacific region. It explores the role of political economy theory, corporate social responsibility, and socio-cultural impacts on Telstra's growth and sustainability. The report also offers recommendations for Telstra to leverage Singapore's trade relationships and enhance its CSR initiatives for long-term success. The analysis considers the challenges and opportunities presented by the differing economic structures and trade agreements of Australia and Singapore, ultimately aiming to provide insights into how Telstra can achieve sustainable growth through international trade and strategic partnerships. This comprehensive study is valuable for understanding the complexities of international business in the Asia Pacific context.

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INTERNATIONAL BUSINESS IN ASIA PACIFIC

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Table of contents
1.0 Introduction..........................................................................................................................3
2.0 Comparison between Australian and Singaporean economy...............................................3
3.0 Political economy and its challenges...................................................................................4
4.0 Application of political economic theory on Telstra............................................................6
5.0 Other theoretical concepts and perspective..........................................................................6
6.0 General recommendations....................................................................................................7
7.0 Long-term sustainable development recommendations.......................................................7
8.0 Conclusion............................................................................................................................8
Reference....................................................................................................................................9

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1.0 Introduction
Each of the economies of the world is different from each other in terms of structure and the
relationship of the government with the agents of the economy. Each economy provides
different challenges and opportunities to the businesses and other activities. While one
economy provides a more stability other provides higher growth in terms of production and
sales to the businesses. This study is regarding the economies of Australia and Singapore
taking into consideration the case of an Australian based company Telstra in order to fully
understand the political economy and other characteristics of these two economies. Further,
the main objective of the study is to highlight the capability of the Australian economy in
providing, growth, sustainability, and stability through international trade with Singapore.
Telstra is a chosen for the analysis as this telecommunication giant based in Australia has
immense popularity in other countries as well. Singapore is one of the biggest markets for
Telstra which has around 7% market share. Given its performance in home country Australia
and the performance of the rivals in Singapore, it has an immense potential to grow in the
future years.
2.0 Comparison between Australian and Singaporean economy
The economies of Australia and Singapore are significantly different from each other from
various aspects. One of the fundamental differences between the economies of Singapore and
Australia is that the former economy enjoys a more open market compared to the latter one.
Australia is one of the biggest mixed economies of the world where both private and the
public sector contributes a significant portion towards the GDP of the country. On the other
hand, Singapore is a free market economy where the intervention of the government is
significantly low. Gilpin (2016) noted that Singapore is also considered as one of the best
destinations for business. One of the important points to note in this context is that, despite
being known as the largest FDI investors in other parts of the world, Singapore also receives
a huge amount of FDI each year due to its attractive investible sectors. According to the
figures of the year 2016, the total FDI inflow of Singapore was around 50 Billion USD which
is still more than emerging economies like Brazil. These come as an immense opportunity
for Telstra.
Furthermore, Singapore economy is also characterised with a feature of government-linked
companies that work in collaboration with each other. This helps in efficient service from the

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government of Singapore which in turn helps in the supply chain value creation of Telstra. In
addition to that, unlike the economy of Australia, the economy of Singapore is highly trade
driven which provides a lot of opportunities as the country imports telecommunication
technology and hardware from countries like Australia. The trade agreements of Australia is
small in number compared to that of Singapore which has a strong and long-term trade
agreement with most of the European economies, UK and US. Consequently, foreign
investment both in human capital and physical capital is inevitable. This also facilitates extra
benefit in terms of efficient raw materials to foreign businesses such as Telstra. Blaikie
(2016) highlighted that Telstra sources a significant number of highly skilled labours from
Singapore only. The strong trade relationship of Singapore also allows Telstra to import
necessary materials from the trade partner of Singapore at a cheap rate.
3.0 Political economy and its challenges
3.1 Theory of political economy
The political economy is an important relationship between economics, society and the
government. In this interdisciplinary study, the impacts of political powers on the economic
and social outcomes are measured and discussed. The recent activities around the world have
provided the reason for integration between politics and economics. Haggard, S., & Kaufman
(2018) suggested that politics and economics must go hand in hand in order to facilitate
society a better well being. The political economy is full of different theories and paradigms
that allow a various solution to a single problem. Political economy and the perspective of the
institution have a key role to play in the operation of the commercial bodies such as
companies like Telstra.
The political economy encompasses the decisions of the states and the contribution of each of
the entities of the economy for the overall betterment of the society. There is a clear
distinction between the different approaches of political economy that impacts different
groups (Hull, 2017). For example, the study from the perspective of society looks into the
relationship between the members of the society and the society as a whole. While on the
other hand, the political aspect of political economy solely focuses on the impacts of the
instruction of states and the members of the society on the performances of the individual
entities which also includes the businesses such as Telstra (Boner, 2018).

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There are different benefits of political economy which directly and indirectly helps in the
operation of Telstra. For example, the objective of the economics part of the political
economy is to propose adequate policies given the current scenarios of the economy.
Savigliano (2018) highlighted that political economy establishes the relationship between the
producers and the workers of the society. On the other hand, the study of the politics suggests
the organisation regarding the distribution of power for the achievement of the overall well
being for the state. The organisations or the entity of economy uses both the notion of
economics and the direction of politics to have a better and sustainable growth for the
organisation. In this case, the better performance or the sustainable growth of the organisation
is not limited to the well being of the organisation (Vandevelde, 2017). It also influences the
other policies of the government, behaviours of the power holders and various members of
the society.
3.2 benefits of political economy and its challenges
The political economy allows different agents of the economy such as businesses, customers
and the individuals to have a better insight regarding the effects of government on members
of the society and the environment. As a result, businesses find it convenient for opportunities
through the established relationship between the state and the members of the economy.
Apart from that, risk assessment is important for all the economic agents. The political
economy provides a clear picture to the entities like businesses to have a clearer vision
regarding the risk of the operation. Keynes (2017) stated that the risk is inevitable for any
business, however, it is the management of the risk and the contingency plan that follows
makes the differences between a successful and an unsuccessful organisation. Another benefit
of the political economy is that it instils a common goal into all the entities of the economy
including businesses. The predominant profit-making goal of the companies becomes a
shared goal of the well being of the society as a whole and that works as the incentives for the
growth and the sustainable development for both the economy and the organisation (Cohen,
2017).
However, despite the benefits of the political economy, there exist a number of challenges
that can hinder the smooth and safe growth of the enterprises operating in other countries.
First and the foremost challenge that posses due to the political economy is the conflict of
interest among different members of the society. This conflict of interest may further hinder
the natural flow of power and economic distribution from institutions such as the government

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(Fine, 2018). For example, conflict of interest in Syria resulted in a proper mismanagement
where the government lost all control over the members of the economy and the society as a
whole. Any organisation operating in Syria would have lost all the credibility to influence a
society for further development and hence would lack adequate investment for further
development of the organisation and sustainable growth.
4.0 Application of political economic theory on Telstra
A commercial enterprise requires a gap in the market which is also known as an opportunity.
The economy of Singapore provides that gap to the companies like Telstra and that is why
these companies find it much easier to operate in Singapore than in Australia. In addition to
that, the political economy also provides a shared incentive to Telstra for the achievement of
both the societal goal and the individual goals of the organisation. (Bettig, 2018) noted that,
sustainable development of the society also has its effects on the growth and the development
of the organisation. For example, the ease of doing business can be attractive for any
organisation. However, from the perspective of political economy, it also creates a positive
value for the economy and society as well in terms of increased job growth and enhanced
economy (Ringen, 2017). According to data, the economy of Singapore stands second just
next to New Zealand. In addition to that, the goals of the political economy also can be in
favour of the sustainable growth of the company. For example, international trade is widely
used in Singapore to source most of the materials (Cohn, 2016). This international trade, from
the political economy of Singapore, is to uplift the quality of economic transaction in
Singapore. However, this also provides a platform for the Australian economy to expand its
operation in other country using its market.
5.0 Other theoretical concepts and perspective
Another theoretical concept other than the political economy that can influence the growth
and the long-term sustainability of the organisation includes the corporate social
responsibility. (Marable, 2015) noted that, the corporate social responsibility of the
organisation is a step taken by the management of the organisation for the betterment of the
environment and the members of the society. However, the implicit motive behind the CSR is
the sustainable development goals of the organisation. In the long term, the demand for the
service of the company depends upon the situation of the society and the world as a whole
and hence the CSR is a part of a strategy to ensure a long-term demand for the service of the
company (Rodan, 2016).

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Furthermore, another theoretical concept that can set the conduct of Telstra in Singapore in
the long term is the social and the cultural impacts. The activities of the Telstra inevitably
have an impact over the cultural and the social values. Therefore, a responsibility towards the
impacts should also be taken in to account for the long-term growth and the development of
the organisation. A good reputation of the organisation can help in the future growth through
the mouth to mouth advertisement of the organisation as well (May 2015). Thus, Cultural and
social impacts are important factors while estimating and considering the long-term
organisational growth and the sustainability of the organisation.
6.0 General recommendations
As per the study of the political economy of Singapore relative to the political economy of
Australia, it is recommended to Telstra to use trade relationships of the country for the supply
chain and the backward linkages of the organisation. The contribution of international trade
in the GDP of Singapore is significantly high and hence relationship of the country is good
with most of the major countries of the world. Telstra can use this trade ties to acquire
necessary raw materials at a lower rate than it can acquire in Australia. This will not only
influence the cost of production of the company but it will also assist in the innovation.
Another general recommendation for Telstra is to have a better focus on corporate social
responsibility as well. One of the effective tools for the sustainable development of an
organisation is corporate social responsibility. The assigned shared goals through the CSR
not only achieve the societal goal as a whole but it also contributes to the individual goals as
well. Corporate social responsibility is also a process to have a balanced environment for
production. In the long term, if the environment and the society are affected, the company
will lose its demand and hence it should be in the interest of the company to take care of the
members of the society and the environment as well.
7.0 Long-term sustainable development recommendations
First and foremost recommendation for long-term sustainable development is the use of eco-
friendly raw materials for the establishment of phone towers. As discussed above, the
political economy assigns a common goal among the entities of the economy. Care for the
environment is not only a shared goal but it can also give a long-term steady demand for the
service of the company. The company also needs to conserve the greenery around the
workspace of the company in order to put across a positive message towards the members of

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the society. Use of low radiation towers in urban areas can reduce the number of health
hazard of the customers who are also the future customers of the service of the company.
Furthermore, it is also recommended to the company to avoid using any kinds of paper for
the daily operation. Use of paper in the making of the recharge card needs to be banned by
the organisation so that, trees and the paper are saved for future growth and sustainability of
the company.
Another recommendation to the management of Telstra is to consider the social and the
cultural impacts of the strategies and the policies of the company. Telstra uses commercial
advertisements to reach out to the population of Australia and Singapore and therefore it
should refrain from using contents that can hurt the sentiments of the people of Singapore.
The member of the society is the customers of Singapore and hence the values and the
preferences of the society need to be respected by the company. The management can
undertake surveys in order to understand the tolerance and the preference of the society.
8.0 Conclusion
Therefore, the conduct of the business in the Asia Pacific is based on different factors. First
and the foremost is the political economy which is different for different economies of the
world. The study suggests that the relationship of the apex institution of the state and the
member of the society which is studied through the political economy is different for
different economies. For the proper growth and the adequate sustainable development of
Telstra in Singapore, it is important to adhere to few of the values of the political economy
which encompasses not only the economic prescriptions but also the values of the society and
the interrelationship among different entities of the economy. Corporate social responsibility
is also another important tool to have a reciprocated impact on the operation and the
sustainable development of the organisations. Thus, given the different characteristics of the
political economy, the structure, sustainable operation and the growth of both the
organisation and the society rest upon the conduct of the organisation in line with the
preferences of the society. Based on the study of the conduct of the company in the Asia
Pacific, the paper also furnishes recommendations to the company which may work for the
betterment and the sustainable development of the organisation in the long term.

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Reference
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