CHAPTER_4 - CHAPTER 4 Legal Regulatory and Political Issues PURPOSE AND PERSPECTIVE This chapter explores the complex relationship between business

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CHAPTER 4 Legal, Regulatory, and Political Issues 0PURPOSE AND PERSPECTIVE This chapter explores the complex relationship between business and government. First, we discuss some of the laws that structure the environment for regulation of business. Major legislation relating to competition and regulatory agencies is reviewed to provide an overview of the regulatory environment. Next, we consider how business can participate in the public policy process through lobbying, political contributions, and political action committees. Finally, we offer a framework for a strategic approach to managing the legal and regulatory environment. 0LECTURE OUTLINE I0. Government’s Influence on Business0 A0. The Rationale for Regulation Many of the issues used to rationalize business regulation can be categorized as economic or social. 10. Economic and Competitive Reasons for Regulation A great number of regulations have been passed over the last century in an effort to level the playing field on which businesses operate. a0. Trusts are organizations generally established to gain control of a product market or industry by eliminating competition. If successful, a monopoly can result. b0. A monopoly occurs when just one business provides a good or service in a given market. c0. Because trusts and monopolies lack serious competition, there are concerns that they may either exploit their market dominance to restrict their output and raise prices or lower quality in order to gain greater profits. d0. Society desires to restrict destructive or unfair competition such as conspiring to fix prices, stealing trade secrets, trademark and copyright infringement, false advertising, and deceptive selling methods. e0. These economically based regulations allow the government to punish firms that engage in anticompetitive practices. 20. Social Reasons for Regulation Regulation may also occur when marketing activities result in undesirable consequences for society. a0. Regulation is necessary in manufacturing industries to ensure that all firms within an industry do their part to minimize the costs of contamination caused by pollution and to pay their fair share of these costs. b0. Regulations have come about in response to social demands for equality in the workplace. c0. Regulations have resulted from special-interest group crusades for safer products. d0. Issues arising from the increasing use of the Internet have led to demands for new laws protecting consumers and business.
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B0. Laws and Regulations The federal government has passed many laws to regulate business conduct. 10.
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This note was uploaded on 04/17/2008 for the course BUS 260 taught by Professor Schultz during the Spring '08 term at Carroll WI.

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CHAPTER_4 - CHAPTER 4 Legal Regulatory and Political Issues PURPOSE AND PERSPECTIVE This chapter explores the complex relationship between business

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