E3, Ch 17: Business, Govt., Regulation Flashcards
Considering the CSR pyramid: the legal component of the government is to…….; the ethical concern is to……..
…enforce laws and regulations
… listen to concerns of society
Code of Federal Regulations
codifies general and permanent rules published by executive departments and federal agencies in Federal Register;
has grown from 22k to 200k pages worth of regulations since 1960
__% of Americans feel more regulation is needed for firms including Amazon, Facebook, and Google. These concerns include: (4)
57%
- misinformation and hate speech online
- size, power of large tech companies
- privacy of personal data
- foreign interference in elections
There is a dependence: Business provides… (4), versus Govt provides… (4)
- jobs
- goods/services
- taxes
- BUT, relies on govt for legal system and security
- educated workers
- infrastructure (roads, public transport, schools, etc.)
- major customer of business (30-40% of GDP)
- BUT, relies on bus. to drive economic growth
govt-business relationship
govt influences business through regulation, taxation; business influences govt through lobbying
public-govt relationship
public influences govt through voting and special interest groups; govt influences public with laws, public policy formation, other political influences
business-public relationship
business influences public through advertising, PR, etc.; public influences business through the marketplace and special interest groups
2 major non-regulatory issues
- industrial policy – role of govt in national economy
- privatization – transferring public/govt functions to private/business sector
industrial policy (3)
- fed govt supports development of EV car industry ($7500 tax credit), solar panels (26-30% tax credit)
- pandemic – govt took role in reviving economy
- in the past – bailouts for bankrupt companies, subsidies, tax benefits
privatization: pro vs anti
pro-privatization – Govt has no comparative advantage, is less efficient and less flexible
anti-privatization – works best when pursuit of profits does not work against broader goals or public policy
Regulation is needed to ensure that ________ and ________ are treated fairly, not exposed to ______, and to protect the _______.
consumers and employees
hazards
environment
Businesses complain that regulations are too _______, too expensive in _______, and burdensome in terms of ___ _____.
costly
scope
red tape (so many steps!!)
actions of a federal regulatory agency (4)
- operates principally on domestic business
- has decision-making authority
- establishes standards
- has members appointed by president subject to senate confirmation
economic regulation includes (3)
- prices (min and max)
- entry to and exit from markets
- types of services offered
social regulation includes
regulating business impacts on people and major stakeholders
ex. FTC voted to ban non-compete agreements, however did not go through
controversies behind social regulation (3)
- members of regulatory agencies are not elected but appointed
- congress has not given agencies explicit authority to make decisions that impact society
- what resources are available should agencies make decisions not supported by society?
previous economic regulation: drone operations have to maintain a visual line of sight (must be able to see it) →
now, FAA has approved flights beyond visual line of sight (using technology rather than direct vision)
Businesses would argue when budgets go toward meeting regulations… (3)
- innovation may be negatively affected by regulation
- new investments in PPE may be affected
- small business may be adversely affected
deregulation
deregulation represents a counterforce. this means…
it is aimed at keeping economy in balance & striving for a balance of freedom and control over business that will be best for society
purpose of deregulation: intended to increase competition with hopes for… (3)
greater efficiency
lower prices
enhanced innovation
2 examples of recent deregulatory actions
- EPA announced 31 deregulatory actions on power plants, oil/gas, mercury emissions
- presidential EO mandated for every new regulation introduced, at least 10 must be repealed. aims to alleviate burdens and promote growth
