Environmental Issues in Business Regulation

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Table of Contents

Introduction
Discussion
Conclusion
Bibliography

Introduction

Business regulation refers to the measures that the government imposes on businesses in order to control the activities that they undertake. The government regulates businesses by controlling their production processes, regulating their amount of imports and exports and monitoring the services that organizations offer to their clients. The government also implements social and environmental regulations which allow it to direct companies on appropriate ways in which they can dispose their waste products. Moreover, the government sets up legal measures that businesses should abide by before they start operating (Thorne 2003, 4). Therefore, the goal of this paper is to discuss the pros and cons of government regulations regarding the practices that businesses undertake daily.

Discussion

The regulations that the government imposes on businesses have benefits and limitations.

Benefits

Regulation of environmental pollution

It is the goal of every government to ensure that the environment is safe to use by the citizens of a nation. In this case, most governments make sure that companies comply with environmental protection laws in order to ensure that the business environment remains sustainable. In this case, the government advises companies to devise proper waste disposal mechanisms so that people can adopt healthy living standards.

Companies that lack sufficient resources encounter difficulties while looking for ways to dispose their waste products. In this case, the government denies such companies permission to undertake activities that would bring negative impacts to the environment. Moreover, the government advises companies to disclose information that is related to hazardous materials that they produce. In this case, employees are able to make informed decisions whether to work for a certain organization or not (Ingram 2013). Therefore, it is true that the regulations that the government imposes on companies are have the effect of sustaining the environment thus allowing people adopt healthy living standards.

Price control

The business environment is characterised by business people whose main objective is to maximise profits. In this case, the government imposes measures that protect consumers from the high prices that organisations charge. For example, monopolies charge high prices since no competitors force them to reduce their prices. In this case, the government adopts price control mechanisms in order to ensure that consumers pay fair prices for the goods and services that they obtain from the organizations. When the government sets price control, only the strong firms are left to operate in the market. Most firms leave the market when they realize that the profits that they are making do not cover for their costs of operation (Ingram 2013).

Monitoring illegal practices

There are certain businesses that engage in unethical business practices. In this case, companies engage in activities that draw the performance of an economy backwards. In order to keep track of the performance of an economy, it is important for the government to put restrictions on business practices that draw back the performance of a country. Though some illegal business practices improve the performance of an economy, it is vital for the government of a state to embark on ethical business practices in order to encourage other nations to transact business with it professionally. A nation that supports illegal business practices does not build lasting relationships with other nations thus making the performance of the economy to deteriorate (James 2010). Therefore, once the government imposes restrictions on illegal business practices, a country manages to sustain its relationships with other nations thus improving the performance of an economy.

Limitations

The regulations that the government imposes hinder the competitiveness of businesses thereby making the performance of an economy to slow down. Moreover, research indicates that some governments impose weak regulations thus preventing businesses with good reputation from operating in an efficient manner.

Minimum wage

The issue of minimum wage affects the profitability of businesses negatively. In this case, the government directs companies to pay their employees high wages. As a result, the costs of operation of businesses go up significantly. In this case, organizations fire their employees in order to keep the prices of their goods and services down. On the other hand, companies raise the prices of their products to allow them to pay their employees reasonable wages. However, there are certain firms that are incapable of coping with such situations and they therefore go out of the market (James 2010).

Wastage of time

Every business enterprise pays significant attention to time factor in order for it to maximize its revenue. However, when the government imposes laws and regulations, businesses waste a lot of time while attempting to follow up with the imposed regulations. In this case, the profitability of such businesses and the productivity of their employees go down significantly (Ingram 2013). As a result, companies find it difficult to cope with the changing economic conditions.

Conclusion

From the analysis therefore, it is true that government regulations influence the sustainability of a business positively and negatively. Therefore, it is vital for the government to set up regulations which would help developing economies to compete effectively with other international organizations and safeguard them from being driven out of the market.

Bibliography

Ingram, David. 2013. Government Regulation Factors in Business. Web.

James, Geoffrey. 2010. Government Regulation is good for Business. Web.

Thorne, Francis. 2003. Business and Society: A strategic approach to Corporate Citizenship. New York: Ferrell and Ferrell.

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