How Do Business and Government Interact

  • 08 Pages
  • Published On: 22-11-2023

The article is about analysing the interactions between government and the business, where there is positive cooperation between them for better practice and management. According to Yergin and Stanislaw (2002), the macroeconomic view, there is crucial role of the government in the business, where the rules and legislations of the government provide a scope to the business entrepreneurs to reshape their organisational activities and make effective decision. As per the article, there are five elements such as smooth information flow, high competition in the market, efficiency of third party, property rights and trust among the individuals which are effective for the market economy. O’Neill and Harsell (2015) stated that, the business firms try to maximise the profitability and in this regard the firm’s profitability is the different between revenue and cost. Yergin and Stanislaw (2002) argued that, the revue and cost of the organisation depend on the output, produced and sold in the firm. In this regard, the organisations try to include the government activities and in this regard, maximisation of the profit volume depends on the revenue and cost, which is measured by the organisational output and governmental activities in the market. The study is hereby beneficial to understand the business activities, as well as linkage between the organisations and the government, as the government plays an important role in maximising the firm’s profitability. Without implementing the government rules, the firms cannot run their activities in the market ethically. The article is also effective to discuss the standard micro economic theory and as per the theory, the government is considered to be constraint the firm’s ability to maximise profitability. According to Harsell and O’Neill (2010), the government activities are taken to be constraint as for example, the activities are such as compliances activities in banks, carbon emission reduction expenses for the electric utilisation etc. hence; there are impacts of the government activities on the profit volume of the organisation.


Through this article, it is hereby effective to discuss the activities of the government and the relationship between the government and the business in running the operations successfully in the market. With the government intervention, the firms also have the scope to restructure their activities to enhance their sales volume and profitability in long run. As opined by Berry et al., (2009), political views are also discussed in this article, where public administration, government intervention and nature of lobbying have important impacts on the activities of the organisations. According to Harsell and O’Neill (2010), legal restrictions, professional code of conduct and government intervention in pricing mechanism and product quality testing are important examples, which regulate thee business activities in the market. The article is also effective to understand the examples of the government intervention which are mainly the strict rules, business copyright and intellectual property rights, as well as price regulation and product testing which rise the costing of the organisation leading to deterioration of the profit volume of the firms in the market. As stated by Harsell and O’Neill (2010), through the analysis, it can be stated that, there is arguments about the aspects of relationship between the business and government. There are both the positive and negative impacts of the government regulations on the business. Berry et al., (2009) argue that, American pluralism is also another crucial factor which review the trade associations, business lobbying, government relationship with the staff and business leader federal agencies and law makers so that the business operations can be strategized efficiently. According to O’Neill and Harsell (2015), lobbying and trade association as well as the business rules have crucial impacts where the government try to intervene in the organisation for successful market mechanism and regulate the activities in long run which has direct impacts on the brand profitability. Hence, as per the opinion of Harsell and O’Neill (2010), that the economic interpretation of the business activities is highly linked with the government activities and political stability of the country to strategise their business activities and run the operations in a sustainable way.

As per the article, it can also be argued that, the government focus on public private partnership for running the organisation and it is beneficial for the society as well as the business entrepreneurs to run their operations successfully. As stated by Berry et al., (2009), commerce department also focus on job creation, economic growth, maximising standard of living and sustainable development. Hence, Yergin and Stanislaw (2002) argued that, there is necessity of public private partnership, where the government aims at collaborating with the business entrepreneurs for better practice and management. The article is effective to discuss about the Washington DC culture in government and business management, which is beneficial to understand the necessity of partnership working practice between the government and the business. However, there is lack of examples of the market structure and government intervention which are major weakness of the study. It is necessary to develop more examples and real life case studies about the government intervention in the business, so that it is possible to acknowledge the relationship between government and business.

The major strength of the article is that the author is able to discuss the theory of profitability, market and government intervention, which provides a scope to understand the government intervention and constraint factor of the government including the strict rules, ethical code and business legislations. According to Harsell and O’Neill (2010), the micro economic equations and political views on the government intervention on business are also the major strengths of the article, where it is possible to understand the ways that the government intervene in the business for better market mechanism. The article provides the perspectives of economic, administrative and political science through which it is also possible to understand relationship between government and business. It is also beneficial to argue about the business practice and the government regulations which help the business to regulate their operations and run the activities in an ethical manner.

Reference List
  • Berry, Jeffrey M., and Wilcox, Clyde, 2009. The interest group society, 5e. New York: Pearson.
  • Harsell, D.M. and O’Neill, P. B., 2010. Experiential learning: lessons learned from the UND Business and Government Symposium. American Journal of Business Education, 3:8, 27-33.
  • O’Neill, P. B., and Harsell, D. M., 2015. How Do Business And Government Interact? Combining Perspectives From Economics, Political Science, Public Administration, And Practitioners. American Journal Of Business Education, 8(2), pp. 161-168.
  • Yergin, D., and Stanislaw, J., 2002. The commanding heights: The battle for the world economy. New York: Free Press.
Kicking Away the Ladder: Infant Industry Promotion in Historical

The article focuses son discussing the practice of infant industry promotion where there is strict rules and legislations about free trade policy and laissez-faire industrial policy. The article is also effective to discuss about the official history of capitalism which ahs crucial impacts on the business activities. Sachs and Warner (1995) stated that, the international development policy establishment (IDPE) is responsible for the good practices in the business promotional activities and trade related operations across the globe. In the 18th century, the government of Britain promote free trade and free market policy for enhancing economic growth and providing the chance to the small and medium sized firm to operate their activities efficiently in the market. According to Sachs and Warner (1995), during the World War, the global political system and economic system have been changed over the period of time, which regulate the market and introduce tariff and quota system for trading internationally. After World War II, there is GATT (General Agreement on Trade and Tariffs) for successful policy framing and economic activities management. As per the article, after the war, the east and South Asia countries focus on promoting the free market and free trade for sustainable economic growth and social development. Ruggiero (1998) argued that, in the 19th century, the liberal trade regime was there in the trade activities of the world economy.

The strengths of the article is that there is strong theory based information about the capitalism and trade activities and the history of capitalism is discussed efficiently which provides a scope to understand the practice of capitalism, free trade and laissez-faire. On the other hand, the examples of developed and developing countries are also evaluated where it is possible for the author to provide an overview about the trade activities and practice in the international markets. The infant industrial promotion is one of the major factors which have contribution in economic growth and social development. As stated by Ruggiero (1998), in the developing countries, there is free trade policy and laissez-faire industrial practice. Sachs and Warner (1995) argued that, the developed nations adopted trade protection to develop their industry and resent it in the international market, but recently, the developed countries focus on free trade zone and they are against the trade protections. However, earlier, the developed countries accept trade protection, tariff and quota system for better management and developing the industry efficiently. The study is also effective for understanding the strategies of international trade in the western countries and the developing countries, where the developing countries focus on infant industry promotional activities, so that the small and medium sized firms can expand their business and set effective price for their products. This is effective for generating profitability and achieving the brand success in long run. However, Chang (2003) argued that, as per the analysis, it has been revealed that, the developed nations focus on international trade, free trade agreement and free trade zone for enhancing the volume of trade activities across the international market, which may has adverse impacts on the infant industries across the international nations. According to Ruggiero (1998), the developed nations aim at implementing the ladder kicking strategy to enhance trade activities and on the other hand, the developing countries can enhance their operations through bad policies in international trade. For fair distribution of income and maintaining fairness and accountability in international trade, USA, Britain, Denmark implemented Income Tax Law.

As stated by Schiff (1971), pull out effects in the developed nations is also effective strategy to transfer the technology and skilled labour in the developing nations, so that industry efficacy can be maximised in long run. 1870 to 1914 is considered as golden age of liberalism WTO or World Trade Organisation regenerated the policy and practice for fair trade activities management. Chang (2003) stated that, during the economic growth and catching up the economies in the developed nations, the USA and UK and other developed nations tried hard to impose tariff and subsidies to grow their industry and represent the infant industries in the world economy. However, after becoming the developed nations and achieving the international trade success, the developed nations are not willing to improve the tariff and quota as well as subsidy in the infant sectors which has crucial impacts on the developing nations, where the developing nations fail to expand their business and they do not get effective remunerations for their products due to free trade and laissez-faire industrial polices and practice. Chang (2003) argued that, it is mandatory for the developing nations to focus on tariff and trade protection system rather than the free trade agreement to promote their infant industry in the international trade so that they can get effective price for their products and services.

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The major weakness of the journal is that it lacks industrial comparison, as well as there is no such future research in the study, where the researcher would be able to focus in future. On the other hand, there are no such promotional strategies for the infant industries mainly in the developing nations, which is mandatory to understand so that infant industry promotional could be possible in future. These are the major issues, in the journal, for which the researcher may face difficulties to focus on the major criteria of infant industry promotion in future. However, the legislations and the legal practices in the developed and developing countries are discussed in this journal, which is beneficial for acknowledging the strategic moves of the countries in maintaining the international trade activities. Schiff (1971) argued that, developed nations in the recent years focus on free trade and laissez-faire industrial policies to enhance their trade volume across the international countries, which further hampers the infant industry growth and promotional activities, mainly in the developing nations. Chang (2003) stated that, it is necessary for the WTO to develop standardise policies and practice for managing the international trade activities, so that the infant industries can be promoted internationally, and the entrepreneurs can enhance their market operations efficiently in long run.

Reference List
  • Chang, H., 2003. Kicking Away the Ladder: Infant Industry Promotion in Historical Perspective1. Oxford Development Studies, 31(1), pp.21-32.
  • Ruggiero, R., 1998. Whither the trade system next?, in: J. Bhagwati & M. Hirsch (eds) The Uruguay Round and Beyond—Essays in Honour of Arthur Dunkel (Ann Arbor, The University of Michigan Press).
  • Sachs, J. and Warner, A., 1995. Economic reform and the process of global integration, Brookings Papers on Economic Activity, No. 1.
  • Schiff, E., 1971. Industrialisation without National Patents—the Netherlands, 1869–1912 and Switzerland, 1850–1907 (Princeton, Princeton University Press).

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