Textbook Notes (358,897)
Canada (155,906)
Administration (1,243)
ADM1301 (73)
Chapter 10

ADM1301 Chapter 10 Textbook Notes
ADM1301 Chapter 10 Textbook Notes

6 Pages
Unlock Document

University of Ottawa
John Palmer

Chapter 10: Regulating Business 10.1 The Spectrum of Regulation Advantages of self-regulation  Faster  Cheaper  More efficient and effective than government regulation  More likely to be accepted  Improves the relationship between business and consumers  Allows government to focus on other priorities. Criticisms of self-regulation  Impairs business competition and innovation due to self-serving restraint  May result in lower standards than those imposed by government  Ineffective when competition and other laws forbid memberships.  Lack of adequate penalties for those who violate the regulations  Insufficient financing  Publicity  Lack of public representation  Government regulation is necessary because society cannot trust business to regulate itself  Government reflects society’s concerns  Government regulation is criticized for being oppressive, ineffectual, confused, conflictual, costly, rigid, and weakly enforced 10.2 Forms of Market Regulation, Self-Regulation, and Government Regulation Laissez-Faire Market Regulation  This approach is where government does not interfere with business  Government regulation is less needed if in a competitive market, due to market forces  Consumers are involved as they can refuse to purchase goods or services Corporate Self-Discipline Regulation  Norms or standards are enforced by the corporation itself  Done through mission and value statements, or codes of conduct or ethics.  CSR is the most general form of self-regulation Industry Self-Regulation  Members of an industry attempt to influence corporate behavior and enforce standards  Potential fro anti-competitive behavior limits the effectiveness of this regulation  Participation is voluntary Self-Regulation Involving Stakeholders  The industry includes non-industry stakeholders by its own volition in the development, application and enforcement of standards,  Stakeholders are difficult to identify Negotiated Self-Regulation  An outside body voluntarily negotiates regulatory standards  Not common, difficult to establish and can be expensive Mandated Self-Regulations  Government prefers to have industry regulate itself  Problems include: potential conflicts of interest, may be slow to initiate, unable to enforce  Stakeholder representation is often token Quasi-Government Regulation  Delegated to government agencies  In some agencies staff are political appointments, or former industry employees  Make presentations before agencies for stakeholders interests Government Regulation  The government extensively regulates an industry or some aspect of business operations  Standards are developed, applied, and enforced by government or its agents, and the standard applied to everyone  Governments are always introducing new regulations  The type of regulation should vary to suit the circumstances  Any type of self-regulation is likely to occur when they are shared beliefs for all stakeholders  Sometimes difficult to clearly identify the types of regulation used  It is generally recognized that some degree of regulation is necessary from outside the corporation 10.3 The scope of Government Regulation of Business  The influence and involvement of government in the business system is substantial and there are ethical implications for businesses Scope of government-business relationships Government is the architect of economic growth  Government actions affect the economic growth of the economy  Economic growth is impacted by trade, fiscal, monetary, taxation, land use, wage and price control, and employment policies  Businesspersons play a role in influencing government to follow policies favorable to them. Government prescribes the rules business is to follow  The government provides the framework legislation, enabling businesses to operate  This legislation includes laws relating to competition policy, anti-dumping, bankruptcy, incorporation, intellectual and industrial property, and property rights.  These laws provide the conditions in which business will operate Government is the major purchaser of goods and services produced by business  The expenditures of all governments are about 40% of GNP  Includes salaries, procurement of goods and services, and grants  Business enterprises supply a large portion of the goods and services sought by government Government is a major promoter and subsidizer of business  Government promotes through grants, loans, and tax credits Governments are suppliers of debt capital to many business enterprises  Government operate financial institutions that lend to businesses Examples of tax expenditures  Accelerated depreciation  Capital gains exemptions  Inventory valuation  Various business adjustment deductions  Government influences business through toxic expenditures, either by granting or withdrawing them Government is a rescuer of failed business  Bailouts occur to varying degrees and can take different forms  Governments are less willing to provide a complete bailout  Provide a bailout arrangement that may include assistance from outside  **GM Bailout** Government is the protector of business and producer interests  Protection from foreign competition, such as tariffs Government is the owner of business enterprises  All levels of government own and operate businesses that could also be supplied by private-sector corporations Crown corporations were formed to  Maintain employment  Provide services the public must  Fill a gap purchase  Promote economic activity  Enhance incomes  Ensure stable supplies o
More Less

Related notes for ADM1301

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.