Role of Government in Regulating Business Organization
Government performs many diverse roles in an economy. Usually, the role of government is to maintain the law and order, defend a country from outside attacks, give social security, take care of public utilities, and sustain peace within a nation. Regulating Business Organization is also an essential part of a Government. The role of government in regulating business organizations is discussed below.
Military industrial complex: A group of high technology companies of a large economic size which work in close cooperation with the department of defense to design and produce military weapons. Retired military officers may be appointed and contract with DD for sales.
Otherwise, a specific business can be closely supervised by the military.
Influence through indirect laws: Government may influence business by various indirect laws to business operations such as monetary contribution, awarding government contract, licensing, the standard of performance etc.
Consumer Protection: The government’s role in business includes protecting the consumer or customer. When a vendor fails to honor the guarantee, the purchaser has recourse in the law.
Employee Protection: The Occupational Health and Safety Administration, for example, is an agency under the Department of Labor. Its mission is to ensure a safe and healthful work environment.
Other regulations: Government may regulate business in many other ways e.g. act as a customer, competitor, supplier, partner, and financier. Govt., can sale and purchase shares, securities, bond, debentures etc.