Key Topics Ch 11 & 12 © 2015 Cengage Learning

Transcript:Key Topics Ch 11 & 12 © 2015 Cengage Learning:
Key Topics Ch 11 & 12 © 2015 Cengage Learning 1 Learning Outcomes Articulate a brief history of government’s role in its relationship with business. Appreciate the complex interactions among business, government, and the public. Identify and describe government’s nonregulatory influences, especially the concepts of industrial policy and privatization. Explain government regulation and identify the major reasons for regulation, the types of regulation, and issues arising out of deregulation. Provide a perspective on privatization versus federalization, along with accompanying trends. © 2015 Cengage Learning 2 Business, Government, and Regulation The government tends to become involved in business after serious problems arise, and there has been no shortage of problems. The first decade of the 21st century saw the tech stock plunge, and the Enron, WorldCom and other scandals. The collapse of the housing market put the economy on the brink of collapse. That decade swung the pendulum of government involvement in business from minimal to major player. © 2015 Cengagje Learning 3 The Pendulum of Government’s Role in Business The areas in which government regulates change, and its varying roles increase the complexity of its relationship with business. Government can: Determine the rules of the game Be a major purchaser with buying power that can affect a business’ or industry’s chances of survival Strengthen some businesses and weaken others Create new businesses and industries through subsidization and privatization © 2015 Cengage Learning 4 The Roles of Government and Business For effective management, government’s role as a stakeholder must be understood. What should be the respective roles of business and government in our socioeconomic system? If the role of business were simply production and distribution of goods and services, business would need little regulation. But other goals exist – safe working environment, equal employment opportunities, fair pay, clean air, safe products – which business does not automatically factor into the business decision making process. As a result, it falls to government to ensure those goals are achieved. © 2015 Cengage Learning 5 A Clash of Ethical Systems © 2015 Cengage Learning 6 Interaction of Business, Government, and the Public (1 of 2) Government-Business relationship - Government influences business through regulation, taxation, and more. Business influences government by lobbying, and more Public-Government relationship - Public influences government through voting and forming special interest groups. Government influences the public with politicking, public policy formation, and other political influences. © 2015 Cengage Learning 7