Government Challenges to Regulate Businesses - Essay Example

Name: Course: Tutor: Date: Government Challenges to Regulate Businesses There are various views shared across the boundaries on reasons why the government seeks to regulate businesses and if the move bears any fruits. Many people deem it unimportant and see it as a destructive move that should not be applied in the first place. At the same time, others see it as the only way that consumers will be shielded from fraud and market failures from unscrupulous business people. The government does so to protect the consumers and set standards that manufacturers must meet in order to supply them with safe products and services. The absence of such standards would expose consumers to substandard products and services which would pose health risks and other dangers to them. This paper looks at the challenges that the government faces in its attempt to regulate businesses. One of the major challenges that the government faces in the business regulation process is the compliance burden. Once the government sets regulations, it has to give the businesses time to make the proper adjustments. These regulations cost time and money and this is a cost imposed on businesses and may therefore take time before the desirable results are established. Some of the regulations require technological input which may take time as well as certain procedures which may be complex for the business. This changes the way a business operates and the government on the other hand has to wait before the implementations take place. This may not happen in the government’s time frame and may require it to give businesses more time to become compliant with the imposed regulations according to Dorothy and Sylvia (2). Procurement is another challenge that the government faces as it seeks to regulate businesses. For instance, businesses wishing to procure goods in small amounts get cleared faster than those wishing to do so in bulk. This is due to the nature of streamlined rules set by the government which give such a provision. Government rules clearly state that businesses wishing to procure large contracts must undergo the bidding process where in most cases the lowest bidder always wins the bid to supply the good in question. This is a process that takes time and it goes without saying that the procurement process will be slowed down significantly (Government Leaders 1). Trans national pressure groups refer to human rights firms and other non governmental organisations which shift their focus to protecting the consumer under all costs. In this case, they use their influence to change the operations of a particular business depending on how it has presented itself in the market. They have such a huge influence that they can lead to changes in a business’s general perception by the masses as well the cost of the goods they have in the market. This makes it hard for business to continue their operations freely due to constant interference and monitoring. In such cases, the government fails to have its weight felt in the regulation process and this makes it a huge challenge for them. These human rights firms also target unfair treatment of employees by their employers and even influence them to go on strike in an effort to air their grievances. In many cases, the government is not left with much choice than to step in and offer the solutions needed at that time (Haufler 3). Another key challenge as the government seeks to regulate businesses is the misconception held by many business people about the government. This is often brought about by lack of clear communication lines where the government is seen as an enemy to businesses. The government will never allow for improper businesses and they always have justifiable reasons for such. The business people may feel undermined by the government’s decision and this creates bad blood. The government also sets regulations on the acceptable structures in a certain area and also proposes the right safety and health measures that the company should employ. The business fraternity may choose to differ but at the end of the day the government has a higher hand in the matter. Basically, this is not a complex issue and with the right communication can be solved amicably (Government Law 1). Many businesses view the regulation process by the government as an administrative burden. They feel that the government is placing an unnecessary burden on their shoulders other than what they carry on their daily operations. These regulations in many cases require a lot of paper work as well as the preparation of reports that must be submitted to the relevant government offices. This process costs time and money and many businesses remain stubborn to the record keepings and making returns to the government which drags the regulation process thus posing unnecessary delays (Dorothy and Sylvia 5). The government faces another challenge in the form of hostility from the business people as well as the media. For them to regulate businesses is seen as a ploy to enrich a few people in the government and this does not auger well with the business fraternity. They see it as fraud and have therefore been in the forefront fighting for deregulation which will give them more freedom to transact business without the watchful eye of the government. The business people feel that they are protecting the majorities welfare whereas the government feels that the consumer is being defrauded. This conflict of interest between the government and the capitalists poses a great challenge to the government (Cramer 6). What the government seeks to regulate has met a lot of criticism from various sectors. For instance, the government has exercised its power over some areas while neglecting others. As a powerful tool of the state, the government has the power to regulate, prohibit and even manage some of the products and services available in the market. The government regulates the manufacture of products, prohibits some actions such as fraud and manages some public assets like game parks and museums. Some sectors are neglected in the regulation process and a good example is judicial matters. The governments seems to be lax leading to judicial inefficiency and this discrepancy causes an out roar in the public, a factor that is among the challenges it meets (Machan 2007). Another challenge that the government faces is instituting new incentives that will not kill the domestic market. When the government regulations are put in place, the cost of production rises and this may lead to the closure of many businesses. This many a time gives rise to importation of low standard products from other countries which create a cheap market for the consumer. This ends up killing the local industry and this call for the government to come up with reasonable regulations for the domestic market. The challenge here is that the government may loose its grip on its regulatory process thereby incapacitating it in the implementation of such. The NGOs on the other hand will have to take sides with the private sector and this means that they will have to shift their attention from highlighting the ‘bad side’. The challenge here is that both sides do not have enough trust for either and this leaves the burden of regulations on the government (Haufler 4). Hiring is another challenge that the government meets in its regulation quest. Government regulations are so stiff that it takes about two years to create a vacancy and up to six months and higher to fill the position. The managers do not have the mandate to hire someone directly and their duties are only restricted to interviewing. This makes the process of hiring efficient staff a lot more complicated. At times, this leads to understaffing which definitely creates a challenge within the government operations. Dismissal of the inefficient ones is even worse since the laid down regulations require a lot of consultations before action is taken (Government Leaders 2). Laxity is another devil of a challenge even as the government embarks on regulating businesses. Many of its officials on the ground are sleeping on the job and this leads to disasters like the one of a certain building that was set up without following the building code. It was therefore built without smoke detectors and this led to the untimely death of the occupant. The government may be trying so hard to put measures in place but the biggest question here is whether the government officials are up to the task. This laxity extends to other products and services where the consumer may end up consuming substandard goods (Fridell 5). The persistent call for deregulation is another challenge that the government is facing from its disgruntled masses. They feel that the government is too powerful and in their bid to regulate businesses make unfair moves that kill businesses. They feel that regulation is the cause of all the domestic feuds between business people and that the government should loosen its grip on the markets. They see it as the only way that they will be able to make more money and promote general welfare (Cramer 2). The business fraternity feel that without regulation, they will have equal opportunities in the market. This will translate to greater business opportunities and the economies of states will improve. They feel that with deregulation, the private sector will thrive and monopoly which is a business killer will be eliminated. They therefore feel that government regulations are unnecessary and that they are the necessary evil that needs to be eliminated. This concern is a set back to a government which has devoted itself to regulating businesses (3). Infringement of people’s rights is another challenge that the government faces in its line of the regulation process. Government regulations mostly prohibit strikes in instances where workers feel that they are being treated unfairly. This prohibition infringes on the employees rights to voice their concerns and this leads to inefficiency. This often happens since a disgruntled worker will not have the energy to perform as usual. The government may therefore consider giving the government employees freedom and bear the inefficiencies that come with strikes. Perfection is a myth and the government must come to terms with this fact if it will succeed in its regulation process (Machan 22). Another challenge that the government faces is the issue of budgetary constraints. In many cases, the budgeting process takes ages to mature and this slows down the business process. These budgets are also inflexible and this makes it even more cumbersome to implement some favourable changes in the business. Reallocation of resources is a major challenge due to the difficulty it encompasses. On the other hand the issue of additional funding is quite a task since the process is long thereby presenting avoidable financial constraints (Government Leaders 1). The issue of corporate decision making is another challenge that the government faces in the regulation of businesses. Many corporate crave the freedom away from these regulations which pose legal liability. This translates into fines which the corporate sector is not ready to deal with and this leads to a cats and mouse game with the authorities. Another issue posed by regulation is inflexibility which the private sector craves. This is generated by the need to be up to date with the market’s changing trends in terms of technology. They therefore feel that government regulation hobbles them and leads them to imbalanced competition (Haufler 6). The fast growth of businesses presented by stiff competition is another challenge that the government has to contend with in its desire to regulate businesses. This makes it hard for it to keep up with these accelerated changes as well as the new strategies that are synonymous with businesses. With these developments come major risks that the government has to be well prepared to cope with. It also has the challenge of learning the new trends to be able to regulate them. Many a time, the government regulations become hard to define and this creates a commotion in the market place (Eatwell 3). Bureaucracy is another challenge faced by the government as it seeks to regulate businesses. The government is in many cases associated with stubbornness when it comes to change. Its lack of flexibility thus poses a great challenge in the 21st century where cumbersome systems are viewed as unnecessary delays to the business process. In other cases, the regulations are viewed as complex and many businesses always ask for less complicated ones. They also need a government official to take them through so as to understand them better. The government must therefore address these concerns if it is to penetrate the markets and succeed in their bid to regulate businesses (Dorothy and Sylvia 19). In conclusion, there are many challenges that the government faces in its quest to regulate businesses as evidenced by the paper. These range from the compliance burden to the fast growth of businesses. These challenges make the regulating task difficult and in many instances calls for change. Many anti government officials have been calling for deregulation which they see as a saviour in this process. Critics argue that with deregulation, businesses will be turned into profit making industries and this will leave all parties happy. On the contrary, regulation seems to offer refuge to consumers who may be subjected to substandard goods and services. Regulation thus, with all the challenges facing it brings sanity to businesses and this cannot be ignored. Works Cited Cramer, Jim. Jim Cramer challenges ‘laissez faire’ government. Bucknell University, 2008. Dorothy, Watson and Sylvia Blackwell. Business Regulation Survey. Economic and Social Research institute. Government of Ireland, 2007. Eatwell, John. The Challenges Facing International Financial Regulation. Queens College, Cambridge, 2002. Fridell, Zach. “Fire death questions linger. Officials: No smoke detector in apartment; Permit status unclear.” SteamBoat Today, 2008. Government Law. Government regulation case study. 21 Oct. 2010. Government Leaders. Management challenges: Government vs. Private sector. Promoting better leadership and management in the public service, 2008. Haufler Virginia. Private sector and international standard setting: The Challenge for Business and Government. Carnegie Endowment for International Peace, 2010. Machan Tibor, R. ‘Government Regulation of Business: The Moral Arguments’. The Freeman Ideas on Liberty. Vol. 38, Issue 7, 2007. Read More