Government Relations Notes - CHAPTER 7 Business Government Relations How Business and Government Relate The relationship between business and

Government Relations Notes - CHAPTER 7 Business...

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CHAPTER 7: Business- Government Relations How Business and Government Relate The relationship between business and government is dynamic and complex. Understanding the government’s authority and its relationship with business is essential for managers in developing their strategies and achieving their organization’s goals Seeking a Collaborative Partnership In some situations, government may work closely with business to build a collaborative partnership and seek mutually beneficial goals. They see each other as key partners in the relationship and work openly to achieve common objectives. The basis for this cooperation may be at the core of the nation’s societal values and customs. In some Asian countries, society is viewed as a collective family that includes both government and business. Thus, working together as a family leads these two powers to seek results that benefit both society and business. In Europe, the relationship between government and business often has been collaborative. European culture includes a sense of teamwork and mutual aid. Working in Opposition to Government In other situations, government’s goals and business’s objectives are at odds, and these conflicts result in an adversarial relationship where business and government tend to work in opposition to each other. Companies often prefer to operate without government constraints, which can be costly or restrict innovation. But regulations can also help business, by setting minimum standards that all firms must meet, building public confidence in the safety of a product, creating a fair playing field for competition, or creating barriers to entry to maintain a business’s competitive advantage. How a specific company reacts to a specific government policy often depends on their assessment of whether they would be helped or hurt by that rule. Public policy is a plan of action undertaken by government officials to achieve some broad purpose affecting a substantial segment of a nation’s citizens. Public policy goals can be broad (e.g., full employment) and high-minded (equal opportunity for all) or narrow and self-serving. National values, such as freedom, democracy, and a fair chance for all citizens to share in economic prosperity, have led to the adoption of civil rights laws and economic assistance programs for those in need. Narrow goals that serve special interests are more apparent when nations decide how tax legislation will allocate the burden of taxes among various interests and income groups, or when public resources, such as oil exploration rights or timber cutting privileges, are given to one group or another. Whether the goals are broad or narrow, for

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