Stakeholder Analysis Paper
ghtyui52000
GovernmentStakeholder.pptQuiz #3
- Describe one way that government is different from business, as laid out by former President Obama?
- How are many American companies spending their recent tax cuts?
Government deals with…
- Common good
public interest--in the interest of society
- Public Goods
shared, generally indivisible, external benefits accruing to all citizens from actions by others
- Externalities
shared, indivisible, costs that accrue from deleterious actions of others
Traditionally, corporate America has viewed the
Government as an adversary…
Blamed for constraining business efforts
Disparaged as responsible for economic woes
Government-Business relationship is also
complicated by recent societal changes:
Rising expectations of entitlements
Consumer protection movement
Rising emphasis on quality of life
Environmental movement
Whereas Business (Capitalism) believes in:
Individualism
Self-interest
Personal freedom
Inequalities between individuals
Government (Democracy) believes in:
Collectivism
Group interest
Equality between individuals
Compared to other countries, the current role of U.S.
government with regard to business is to intervene
after the fact, when the need arises.
Throughout our history, though, government has
supported business:
Laws protecting private property and contracts
Land grants and loans
Building of roads
Protection of overseas investments
Tariffs to protect domestic industries
Granted contracts – such as Iraq war & reconstruction
Does GOVERNMENT have a role in creating world economic powers?
Britain in the 18th – 19th centuries, U.S. in the 19th – 20th centuries, Japan in the late 20th century…
They all use government to “cheat” and get prices “right”
They only espouse “laissez-faire” after industrial success
They all used tariffs and industrial planning, as well as the guise of national defense
While industrializing, promoting production came first, consumer welfare second
Government Business =
Taxation, Regulation, Personal Profiteering
Business Government =
Lobbying & Political Action
Reasons for Government Regulation
of the Private Sector
Flaws in the market mechanism
Natural monopoly
Natural-resource regulation
Destructive competition
Externalities
Inadequate information
Social, political, and other reasons
Socially desirable goods and services
Protecting individual rights and privacy
Resolution of national and global problems
Regulation to benefit special groups
Conservation of resources
Reasons for Government Regulation
of the Private Sector
C3-*
Major Federal Regulatory Agencies
Predominantly Industry
Food and Drug Administration (FDA) 1906
Federal Reserve Board (FRB) 1913
Federal Trade Commission (FTC) 1914
Federal Home Loan Bank Board (FHLBB) 1932
Federal Deposit Insurance Corporation (FDIC) 1933
Federal Communications Commission (FCC) 1934
Federal Aviation Administration (FAA) 1958
Federal Maritime Commission (FMC) 1961
Nuclear Regulatory Commission (NRC) 1975
Federal Energy Regulatory Commission (FERC) 1977
Predominantly Functional
Securities and Exchange Commission (SEC) 1934
National Labor Relations Board (NLRB) 1935
Equal Employment Opportunity Commission (EEOC) 1964
Environmental Protection Agency (EPA) 1970
National Highway Traffic Safety Administration (NHTSA) 1970
Occupational Safety and Health Administration (OSHA) 1971
Consumer Product Safety Commission (CPSC) 1972
Mine Safety and Health Administration (MSHA) 1977
Table 9.1
C3-*
Historical Waves of Government Regulations of Business
Shortcomings of Federal Regulations
- Poorly drafted basic legislation
- Insufficient budgets
- Legislative excess that overloads agencies with impossible tasks and denies them money to carry out tasks
- Contradictory laws and regulations
- Lax administration, incompetent bureaucrats
- Interference of special interests in implementation
Ethical issues in the context of privatization and deregulation
- Privatization profits
- Key issue is a fair price
- Citizens turned consumers
- Economic basis for decisions, rather than political
- Natural monopolies
- Can lead to over-charging or delivering poor quality
- PPPs, Public-private-partnerships
- Private sector profit-maximization tends to dominate at the expense of quality and effectiveness for citizens
Should Business be Involved in Public Policy?
Business influence on government
Degree of business influence
Type of business influence
Privatization of governmental functions
Overlap of posts between business and government
Party financing
Lobbying
State capture
Degree of business influence
Type of business influence
Lobbying
Overlap of posts between business and government
Party financing
State capture
Privatization of governmental functions
Levels of Business Involvement in Public Policy…
“Today, the biggest companies have upwards of 100 lobbyists representing them, allowing them to be everywhere, all the time. For every dollar spent on lobbying by labor unions and public-interest groups together, large corporations and their associations now spend $34. Of the 100 organizations that spend the most on lobbying, 95 consistently represent business.”
The Business-Government relationship:
A global challenge
The challenges related to controlling the untoward influence of business (and money) on politics is not just a US challenge. Countries around the world have been working on legislation that would include:
Limits on expenditures
Contribution limits
Disclosure regulations
Bans against certain types of contribution
Bans against certain types of expenditures
Measures designed to encourage donations
Subsidies in-kind
Public subsidies
Business Strategy - BUSN 162
*
Larry Summers
Glenn Hubbard
Eliot Spitzer
Fredric Mishkin
Brooksley Born
Alan Greenspan
Raghuram Rajan
Lehman Brothers
Lloyd Blankfein
Moody’s
AIG
Business Strategy - BUSN 162
*
Lobbying Party
financing
Overlap of posts
between
business and
government
State
capture
Privatization of
governmental
functions
Type of business influence
Degree of business influence
Lobbying Party
financing
Overlap of posts
between
business and
government
State
capture
Privatization of
governmental
functions
Type of business influence
Degree of business influence
