Business and government in global society (Term Paper Sample)

Business and Government in Global society Name: Number: Course: Facilitator: Date: Business and Government in Society Executive Summary Business, government and the society are interrelated. Research conducted indicates that none can exist without the other. Business requires the government to set regulations and rules and to provide a conducive business environment. Business needs the society to consume the goods. This interrelationship is an endless one. This research paper was done to explain further the relationship that exists between the government, business and the society. The main study focuses on the importance of business and government in the global society. The research done was based on the review of many literature materials for example the textbooks. According to Kolbi (2008, p.51), he outlines three theories that describe the relationship that exists between government, business and the society. These three theories are: theory of mixed economy, socialism and free market economy. The main objectives of business are maximization of profits having low costs. The government is to set rules and framework for the business and to provide adequate resources and many others. The likely problems associated with business are outlined towards the end of the report. Some of these are uncertainty, the global economy, the credit markets, innovation, government policy and regulations and the technological advancements among others. Business and government are of key significance in our global society. Introduction The involvement of business, civil societies and the government in providing solutions facing the global society has been in the existence for ages (Kolb, 2008, p.8). However, this idea has acquired more support in the recent past. Due to the urgent need of globalization, there is the necessity to re-evaluate the business and government-society relationship. The expression of business ideas is ever changing and is extraordinarily diverse. Business activities take place every day, every time and everywhere. People earn most of their income from business activities. Business and Government have a close relationship and play very significant in the global society. Government refers to the body that governs a particular state of country. Society is a collection of individuals. They reside in communities of same values and laws. The society is composed of different interests, culture, attitudes, lifestyle and religions (Kolb, 2008, p.10). Business involves firms or organizations that have a role industrial, consumer or economic activities. Business forms the cornerstone of prosperity in society (Crane, 2015, p.3). Business companies do create the necessary resources needed for social development in the global society. Business involves the exchange of goods and services between the buyers and the sellers. This report generally describes the role of business and government in the society. It outlines why business is of great necessity to our society. The business sector has provided many benefits to the economical sector of our society. This is also described. It explains the theories and models of business and government relationship. The description of the business and government sector is briefly described. This work also focuses on the effects of government on business and the likely problems associated with business. The main goal of business is to develop, produces and supply goods and services to customers within the society (Crane, 2015, p.340). This is aimed at achieving profit maximization. The business sector plays an important role in the enhancement of much development in all the sectors of the economy of any country. Literature Review Theories of Business, Government and Society relationships There exists a complex relationship between business and government. This relationship entails both the negative and positive aspects. This is termed as "the public good." It varies depending on several ideologies put forward by many people. This makes it even more complex to understand. There are three theories that elaborate further on the understanding of the relationships between business, government and the society. These include: theory of mixed economy, socialism and the free market economy (Kolb, 2008, p.51). Mixed economy refers to a system of economy whereby both the private sector and the state directs the economy. It also directs the planned economies and the market economies. This system argues that private sector should direct the means of ownership. The dominant form of coordination should be the markets (Crane, 2015, p.370). The fundamental force that drives economic activity should be the profit-seeking enterprises and the capital accumulation. The role of the government is the provision of social and economic benefits to its citizens. The government has a considerable indirect influence over the economy. This is realized through the fiscal and monetary policies. These policies are set to counteract the economic setbacks like cases of unemployment. Mixed economy is so complex and there may not be a definite definition. It simply encompasses certain private degree of economic freedom combined with degree of the regulation of markets by the government. The economic concept of socialism emphasizes on the collective ownership of the means of production and the way of distribution (Beales, 2012, p.80). It eradicates competition within business. This is because regardless of the demand of goods or the cost of production, the items or goods are still solved at predetermined prices (Aras & Crowther, 2012, p.178). It ignores the people’s ability to pay for the goods. Its main objective is the provision of goods for the general welfare of people and the proper distribution in accordance to the needs of people. It stresses on social ownership. It disputes the idea that items preferred by individual or private businesses firms are also important for the entire society. The government should direct and control business on behalf of people. It should also determine the nature of goods to be produced and at what prices (Beales, 2012, p. 85). This solves the problem of tendencies of capitalism that are selfish and dehumanizing. The free market theory stresses on the investment, production and the distribution of goods and services (Crane, 2015, p.88). The forces of demand and supply determine the decisions of investment, production and the distribution of goods and services. It is in the free market system where the prices of goods and services are determined. It is based on laissez faire which is a theory of Adam Smith. It asserts that there should be minimal or no relationship that is formal between the government and business (Beales, 2012, p.100). It further argues that in the standard living of individuals, there exists a similarity between the economic gains and efficiency with the public goods. Better goods are produced at cheaper prices for people based on the system of demand and supply. This theory postulates that it is only in the market place where business interacts with others in the society. Business Sector Every business posses some nature of involvements with groups, people organizations or stakeholders in the society. These people may affect the policies, decisions and the operations of a particular business operation. This is attributed to the diversity in the cultural, political and economical influences created by the people, ideas or the institution (Crane, 2015, p.232). Some are desirable while others are undesirable and unintentional. The profitability and economic success of the business may affect suppliers, customers, owners, employees, the creditors and the local communities. Decision made about business matters may have both the negative and positive impact to the society. The prosperity of a business firm may also be influenced by the actions within the society. Managers in the business firms must take the key responsibility to achieve or fulfill the tasks of the government. The government may be primarily influenced by business through the political action committees, the public relations and the lobbying groups (Aras & Crowther, 2012, p.155). Lobbying groups for example, trade and business associations are actively involved in the presentation of their ideas at the state and the local levels of government. The existing groups may be supported by business or new groups can be formed for a specific purpose. Businesses, through the political action committees may be greatly get involved in the electoral and government process. For example, in countries like United States of America, the political action committees have the mandate to solicit for funds from stockholders and employees. They then make the contributions to their political candidates. Government sector The government is joining hands with other stakeholders to take the strategic role of corporate social responsibility (CSR). The CSR as a concept in government action has a connection with the other challenges that are attributed economic changes and globalization for example, the changing role of business in society. The CSR policies of the government can be evaluated through four types of relationship. These are: CSR in government-business relationships, CSR in public administration, CSR in government-civil society relationships and CSR in government-business-civil society relationships (Giavazzi & Mcmahon, 2012, p. 55). These programmes incorporate the inputs of participation between business, government and the society. The governments in many nations have started to see the CSR programs as a means to enhance development that is sustainable. They also view the programs as a means of creating strategies of national competitiveness. This allows for competition of fo...