Imperial Chemical Industries Essay Example | Topics and Well Written Essays - 2000 words

Imperial Chemical Industries - Essay Example The technology could either be innovative products that satisfy customer needs and wants or technology that offers cost competitiveness (Annual Report and Accounts 2005, 149; Science & Technology, online). A few factors in the economical environment are influential on profitability, especially since ICI operates worldwide in over 50 countries. They include domestic and international recession, tariffs and trade barriers, exchange controls, fluctuations in national currencies, foreign exchange exposure, and cyclical fluctuations of the industries and economies in which its businesses operate (Annual Report and Accounts 2005, 149-150; Investor Relations: Financial Performance: Risk Management, online). There are many factors in the legal environment that are particularly influential on profitability. They arise from worldwide operation, exposure to consumer markets, rules governing fair competition and corporate governance, and contractual obligations. ICI worldwide operation requires compliance with a range of foreign laws, regulations and standards that are expensive. Moreover, the difficulty of enforcing legal claims and agreements through some foreign legal systems will also affect profitability. Lastly, unforeseen changes in local laws, regulations, and standards in developing countries could affect ICI's profitability (Annual Report and Accounts 2005, 150). ICI's exposure to consumer markets exposes it to legal risks, regulation and potential liabilities from product liability claims asserted by consumers, which could have an adverse effect on profitability. A significant proportion of ICI's products is sold directly or indirectly to end-user consumers, even if ICI does not itself provide these products directly to consumers. Specifically, the laws and regulations to which ICI are exposed are environmental, health, and safety. Environmental, health, and safety laws and regulations include those concerning pollution, the health and safety of employees, protection of the public, protection of the environment and the generation, storage, handling, transportation, treatment, disposal and remediation of hazardous substances and waste materials. These regulations and standards are becoming increasingly stringent. ICI is also subject to inspections and monitoring by the relevant enforcement authorities. ICI also requires relevant permits and a pprovals for its operations that require compliance with their terms and which may be subject to renewal, modification and, in some circumstances, revocation. Violations of applicable laws, regulations and standards, could result in losses in the form of damages, fines or other sanctions, increased costs of compliance as well as reputational damage (Annual Report and Accounts 2005, 151). With regard to environmental laws and regulations, ICI is subject to soil and groundwater remediation, that in the future may require it to take action to correct effects on the environment of prior disposal or release of chemical substances. With regard to safety and health laws and regulations, The Glidden Company (Glidden), a wholly owned subsidiary