Professional Documents
Culture Documents
Overview
Understanding
business environment Understanding government & public policy Discuss the governments role in its relationship with business Explore the interactions among business, government, and the public List major reasons for regulation, the types, and issues arising out of regulation
External environment
environment
Macro environment
External Environment
Micro environment of business enterprise refers to study on small area or immediate periphery of the business organisation. Micro environment directly or regularly influence to business organisation. Macro environment is largely external to the business enterprise. Macro environment factors are uncontrollable factors and beyond the direct influence and control of the organisation.
Macro environment
Economic environment Political environment Legal environment Socio-cultural environment Demographic environment Natural environment Physical and technological environment Technological Environment Global or International environment
Understanding Government
Government is specialised institutions for allocating resources Its central features are the ability to make collective decisions and the capacity to enforce them The core functions of government are thus to make law (legislation), implement law (execution), and interpret law (adjudication) (Heywood, 2002)
Public policy: a plan of action undertaken by government officials to achieve some broad purpose affecting a substantial segment of a nations citizens Public policy inputs shape a governments policy decisions and strategies to address problems Public policy goals can be broad and high-minded or narrow and self-serving Governments use public policy tools involving combinations of incentives and penalties to prompt citizens to act in ways that achieve policy goals Public policy effects are the outcomes arising from government regulation (Lawrence, 2011)
Business-Government Relations
Recognition
of the role that nonmarket factors play in competitive strategy and firm performance Firms actively utilise political strategies to influence government policy and obtain an advantage (Shaffer & Hillman, 2000)
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Contd
Is an architect of economic growth. Is a financier. Is the protector of various interests in society against business exploitation. Directly manages large areas of private business. Is the repository of the social conscience and redistributes resources to meet social objectives
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Business
Government
Political Process Voting Interest Groups Contributions
Public
(Bakhsheshy, n.d)
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Regulation: the action of government to establish rules of conduct for citizens and organizations. It is a primary way of accomplishing public policy.
Market failure Negative externalities Natural monopolies Ethical arguments: achieve social goals
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Government Beliefs
Maximizes concession to self-interest Minimizes the load of obligations society imposes on the individual (personal freedom) Emphasizes inequalities of individuals
Subordinated individual goals and self-interest to group goals and group interests Maximized obligations assumed by the individual and discouraging self-interest Emphasized equality of individuals
(Bakhsheshy, n.d)
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Economic regulations: aim to modify the normal operation of the free market and the forces of supply and demand
Includes regulations that: Control prices or wages Allocate public resources Establish service territories Set the number of participants Alocate resources
(Bakhsheshy, n.d)
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Social regulations: Aimed at such important social goals as protecting consumers and the environment and providing workers with safe and healthy working conditions Includes regulations which apply to all businesses:
Consumer protection laws for businesses producing and selling consumer goods
(Bakhsheshy, n.d)
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Benefits of Regulation
Fair
treatment of employees Safer working conditions Safer products Cleaner air and water
(Bakhsheshy, n.d)
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Costs of Regulation
Reduced
innovation Reduced investment in plant and equipment Increased pressure on small business
(Bakhsheshy, n.d)
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Individual Assignment
Short essay on business-government relations Analyse one of the following topics based on empirical study: Government regulations on minimum wage Government regulations on child labour Government regulations on workers welfare (safety and health issues) Government regulations on natural environment The essay must focus on: problems identification; the costs of compliance; the firms strategy to comply with the regulations
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The length of the essay is between 1.000 1.500 words (or 4 5 pages, Times New Roman, 12 fonts, 1,5 lines) Essay must be submitted on 1 March 2013