BA 385: Business, Government and Regulation Chapter Ten: Who’s Flying That Plane? Introduction to Chapter Ten The chapter examines the relationship between business and government and in particular the government’s role in influencing business decision making.
Chapter Ten: Who’s Flying That Plane?
Maximizes concession to self-interest
Minimizes the load of obligations society imposes on the individual (personal freedom)
Emphasizes inequalities of individuals
Subordinated individual goals and self-interest to group goals and group interests
Maximized obligations assumed by the individual and discouraging self-interest
Emphasized equality of individualsRoles of Government and Business
Clash of Ethical Systems
targeting certain industries for special tax breaks
Industrial policy is a prime target for special interest capture, as firms attempt to influence government to favor them.
Also, industrial policy has had the effect of raising prices and restricting output due to overbearing and bureaucratic government management.
Decline of U.S. competitiveness
Use by other nations
Ad hoc system
Reduces market efficiency
Promotes political decisions
Foreign success variable
National attempts uncoordinated and irrationalGovernment’s Nonregulatory Influence on Business
Moral suasionGovernment’s Nonregulatory Influence on Business
Other Nonregulatory Influences
Reasons for Regulation
Types of Regulation
Benefits of Regulation
Reduced investment in plant and equipment
Increased pressure on small business
Purpose & Dilemma