Business - Government Regulations and Society

Question: Discuss about the Business, Government Regulations and Society. Answer: Introduction: Large corporations and business industries influence economic, environmental, cultural and political forces, which are the key components to shape our world (Roach, 2000). In the past, the size of these industries was not too big and they were controlled by the actions of the society. With the globalization, the industries have moved towards becoming more powerful. Though, there is not any widely accepted metric to measure the power of corporations to shape our world, the fact that they affect the world in an imperceptible and complex manner cannot be avoided (Korten, 2015). The actions of these corporations shape our consumption patterns, working schedule, income distribution, communication, culture, transportation and even the political situation largely (Serafeim, 2014). Facebook, one of the biggest corporations, has almost swallower the public sphere of journalism industry. It has become more powerful in controlling the publication matters and grabbing the attention. Social media companies like Google, Apple, Amazon, twitter have changed the thinking pattern of the entire world largely (Korten, 2015). These corporations affect the society as completely, even those who are not directly associated with them. The industries generate pollutions, which affects all the nearby residents. These corporations are responsible for many other externalities (Roach, 2000). However, the corporations and industries sometimes use their power to avoid their responsibility of compensating for the significant external costs. They also use their power to shift these externalize cost to the public sector. Through the power, they are successful in reducing the applicable tax rate and receiving substantial subsidies (Serafeim, 2014). The corporations and industries possess huge wealth and political power. They exert this power in influencing international trade agreements. The laws governing the business world are also relaxed for industries and corporations. These corporations enjoy greater freedom and rights than that of the individual (Korten, 2015). For example, the metastasized growth of Wal-Mart has become so influential that it has knocked out many local businesses and transformed the logistic industry dramatically. In a way, they set their own rules. Although the influence of corporations on world is not new, but the rising size, wealth and thus the power is a matter of concern. These may result in corporate libertarianism along with libertarian economics and market capitalism (Serafeim, 2014). However, the corporations also use their power to address the social and environmental causes. They spend their resources on many issues that are immaterial for them. These corporations have recognized a shifting role in the society. They even frame various social and environmental policies to integrate in their business operations. Corporations use their power to develop a relationship between business and society and satisfy the needs of all its stakeholders. Various internal and external forces need to be anticipated and recognized for the growth and prosperity of the businesses (Harrison John, 2013).. These forces have changed the management task, altered the business operations and modified the stakeholder expectations. The main task of the management is planning, organizing, controlling and leading. The internal and external factors and the business environment affect all these functions. The managers must try to identify these forces to take best advantages of these forces (Isaac, n.d.). The impact of these forces on the management task is discussed below: Human resources require managers to be alert while recruitment and selection. Organizational culture requires managers to develop and maintain positive attitude of staff members. Organization structure affects the division of labor to accomplish a task. Financial strength affects the implementation of strategy by the management. Sociological and demographic factors influence the management task of planning and designing the products for specific groups. Prevailing economic and political forces affects the spending patterns of consumers. The managerial decision should be effective to succeed in the dynamic market environment. Technological forces now require managers to be flexible to adapt the changes. Market forces require managers to make strategies to deal with the constantly changing environment and the competitors. The legal forces like taxation and other industrial and workplace legislations require prompt management actions (Harrison John, 2013). These forces also affect the business operations. The internal forces are within the control of the company to an extent but the external forces cannot be controlled (Li Liu, 2014). The influence of the forces on business operations are: The strength of the employees affects the performance level of the organization. Strategic risk affects organizational ability to achieve their business objectives. Companys location affects the ease of procurement and distribution. Access to natural resources reduces cost of operation. The economic condition affects the demand for the products and thus the sale of the products. Technological changes determine the production and distribution manner. Environmental fluctuations influence the availability of the resources. Socio- cultural forces influence the buying pattern and expectations of consumers (Li Liu, 2014). Stakeholders have the greatest interest in the business operations (Rothaermel, 2015). The change in the internal and external forces of the business environment has also modified the expectation of the stakeholders. The working condition influences the performance and behavior of internal employees. Technological changes have raised training and development expectations of employees in order to stay updated. The rising competition has raised customer expectations of quality products at reasonable cost. The legal forces have raised the demand for healthy environment, good corporate governance practices and concern for corporate social responsibility (Richards, 2016). It can be concluded that various internal and external forces have a direct impact on the task of the management, business operations and expectation of the shareholders. Law and government regulations supervise the business behavior towards beneficial direction throughout the world. Government implements and enforces laws and regulations, in the absence of which, the businesses might engage in unfair and unethical practices and produce outcomes that are unacceptable (Breslin, 2016). Government regulations protect the interest of stakeholders by reducing objectionable business activities. The legal regulations establish an expected performance standard and failure to comply with the standard brings consequences in terms of fine and several other penalties. It promotes the compliance of corporate governance, both through encouragement and coercion, which in turn reduces the incidence of illegal behavior (Breslin, 2016). Government establishes explicit legislations to restrict illegal activities and fair compliance of the ethical obligations. The government regulations also monitor anti competitive practices and supervise the position of dominance. Government regulations also monitor business behavior towards the environment (ernstein, 2015). It rewards the companies with green awareness and environment friendly practices and imposes tax for wasting energy. Government regulations ensure that the new firms can enter the market without any restriction unless otherwise the law itself imposes a restriction. It allows firms to exit from the market freely in case it chooses to do so (Breslin, 2016). The government regulations control the price level ensuring that the organizations charge a fair price. They also monitor the prevailing wage rate and fix minimum wage level. The government regulates the standard and quality of certain products and services. These regulations enforce the complex business contract as to the mergers and acquisitions. It also protects the consumers by ensuring that the vendors meet their obligations. Legal regulations protect the employees of the company by administrating the health and safety measures of the company (ernstein, 2015). Government regulation ensures non-discrimination and fair recruitment and hiring process. It also provides for privacy of the sensitive information of the employees and customers (Holt, n.d.). Thus, it can be said that the law and government regulations have a significant role in monitoring and supervising the business behavior to generate the desired results for the betterment of the society (Breslin, 2016). References: Breslin, C. (2016). Role of Government in Business Ethics. Smallbusiness.chron.com. Retrieved 30 December 2016, from https://smallbusiness.chron.com/role-government-business-ethics-65128.html ernstein, M. H. (2015).Regulating business by independent commission. Princeton University Press. Harrison, J. S., John, C. H. S. (2013).Foundations in strategic management. Cengage Learning. Holt, M. Five Areas of Government Regulation of Business. Smallbusiness.chron.com. Retrieved 30 December 2016, from https://smallbusiness.chron.com/five-areas-government-regulation-business-701.html Isaac, L. Strategic Planning: Environmental factors in strategic planning. Leoisaac.com. Retrieved 30 December 2016, from https://www.leoisaac.com/planning/strat016.htm Korten, D. C. (2015).When corporations rule the world. Berrett-Koehler Publishers. Li, D. Y., Liu, J. (2014). Dynamic capabilities, environmental dynamism, and competitive advantage: Evidence from China.Journal of Business Research,67(1), 2793-2799 Richards, L. (2016). Internal External Forces That Influence Employee Behavior. Smallbusiness.chron.com. Retrieved 30 December 2016, from https://smallbusiness.chron.com/internal-external-forces-influence-employee-behavior-2806.html Roach, B. (2000). Corporate Power in a Global Economy (1st ed.). Medford. Retrieved from https://www.ase.tufts.edu/gdae/education_materials/modules/Corporate_Power_in_a_Global_Economy.pdf Rothaermel, F. T. (2015).Strategic management. McGraw-Hill Serafeim, G. (2014). The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research (1st ed.). Retrieved from https://www.hbs.edu/faculty/Publication%20Files/14-110_e7a7f1b3-be0d-4992-93cc-7a4834daebf1.pdf