The end of an international trade embargo against Vietnam encouraged U.S. consumer goods giants to invest heavily in factories in Vietnam. By 1998, for example, Tide, Lux, and Clouse-Up were top sellers. So, were Lever-Viso (Unilever's Vietnamese joint venture) and Procter & Gamble happy? No, the products, while genuine, wire Thai-made and smuggled into Vietnam. The season was the devaluation of the Thai baht versus the Vietnamese dong. The Thai-manufactured goods were far cheaper than identical Vietnamese-manufactured goods. The Vietnamese companies were frustrated by government officials against smuggling.
The management accountant in the MNC must be aware of more than business and finance Political and legal systems have important implications for the company. Sometimes, the political system changes quickly, throwing the company into crisis. Other times, the situation evolves more slowly. The shift in Spain's political system, from Franco's dictatorship to a democracy, is a case in point.
Management accounting has gained increased importance in Spain since the early 1980s. Part of the increased importance is due to the increase in competitive pressures. The profitability of many Spanish firms has eroded, and firms see the need for more formal mechanisms of control, such as budgeting and standard costing A second reason is the shift from a sheltered economy and political dictatorship to a democratic society. The previous dictatorship favored external methods of control, reinforcing a coercive political and social structure. The system was isolated from the rest of Europe, with a highly regulated economy. The shift to a more democratic society and a loosening of the regulatory environment has allowed Spanish firms more freedom of action in business and has led to the need for management accounting control.