Is the government an important factor of a Business existence?

[Mellorando]

A lot of people think if there is no government support then there is no guaranteed business existence this thinking is absolutely true because Governments can create subsidies, taxing the public and giving the money to an industry, or tariffs, adding taxes to foreign products to lift prices and make domestic products more appealing. Higher taxes, fees, and greater regulations can stymie businesses or entire industries. Government mandates that companies make financial information public, thereby protecting the rights of investors and facilitating further investment. This is generally done through filings with the Securities and Exchange Commission. Whether federal regulation has been adequate is a matter of much debate.
Government and business institutions in a country in many ways are interrelated and interdependent. In today’s global economy, businessmen and entrepreneurs are the driving forces of the economy. In a planned economy or even in the market economy government holds control of shaping the business activates of a country. For maintaining a steady and upward economic growth The Government must try to make the environment for business organizations suitable. And the organizations must follow the laws of governments’ to run the businesses smoothly and making sure there is a level playing field.
The main goal of businesses is to make a profit and governments’ goal is to ensure economic stability and growth. Both of them are different but very co-dependent. For this, the government and organizations or businesses always try to influence and persuade each other in many ways for various matters. A balanced relationship between the government and businesses is required for the welfare of the economy and the nation. Let’s see how government and business organizations try to influence each other.

Below is how Government Influences the Business Organizations:

1. The government attempts to shape the business practices through both, directly and indirectly, implementing rules and regulations.

2. The government most often directly influences organizations by establishing regulations, laws, and rules that dictate what organizations can and cannot do.

3. To implement legislation, the government generally creates special agencies to monitor and control certain aspects of business activity.

4. For example, the environment protection agency handles Central Bank, Food and Drug Administration, Labor Commission, Securities, and Exchange Commission and much more.These agencies directly create, implement laws and monitor its application in the organization.

5. Governments sometimes take an indirect approach to shaping the activities of business organizations. These are also done by implementing laws or regulations but they are not always mandatory. For instance, the government sometimes tries to change organizations’ policies by their tax codes.

6. The government could give tax incentives to companies that have an environment-friendly waste management system in a production factory.

7. Or, tax incentives could be provided to companies that have established their production facilities in a less developed region in the country. As a result, more often the businesses would probably do so.However, this regulation and its implementation must be to an optimal degree.

 

[Jasz]

Yes, the government is an important factor of a business existence. The government is responsible for laws, which regulate and also protects business firms against unfair competition or unethical market practices. The government also provides legal protection over property and assets of a business firm.


Why thinking about this, It is not as if you would go directly to the government for selling your products provided that you have a monopoly in the market or some backed-up aid from the central bank. Certainly, the political power is good for controlling the corruption level and it is more effective than providing the absolute transparency in economic activities. However, managing expectations about economic performances is a tricky task for every business. The governments are also looking forward to give some boost in every phase of economic cycle.

Businesses exist in the context of both internal and external environments. Since businesses are subject to the rules, regulations and policies created by government entities, it is safe to say that government plays an important role in a business's existence.


The impact of the government in various businesses can not be overemphasized. So, we should bare this in mind while trying to have our various businesses. Thank you.

 

[Alexandoy]

The government should be supported of business enterprises because the business is there for the profit. One factor is the taxation. When the tax is onerous that the business would endure shortage of funds then most likely the businesses in the area would soon close shop. In some provinces here they give a tax holiday of 1 year for new businesses to give the entrepreneurs a chance to earn. We also have the discount on the seniors which discount of 20% on food items is shouldered by the government (the amount of discount is deducted on the taxes due the business). The rental law is also a factor especially when there is a cap on the rental increase. But in our country there is no much benefit that is given by the government to the business, what I mean is the national government.

 

[eldavis]

Well I would say the government do play a role in the business. There are certain policies that the government might introduce that would definitely affect both big and small business owners.

 

[Kingsley]

In setting up a business venture there is a lot of things to put into consideration, we all know that having the technical know how of the business you intend to do, and also having adequate capital to start up and run the business effectively and efficiently. The government plays a lot of role in business formation and existence. In fact the government gives a business organization that legality that they require to operate and they also confine that power for a business to be seen as an entity that is distinct from their owners, hence making them have the power to sue and be sued aswel.

Government also provide an enabling environment for businesses to survive by making provisions of good road and reliable transportation systems that can make goods and services to get to their desired destinations in good time. and they also provide stable electricity for business to have access to regular power supply and power up their businesses, hence they will not waste their hard earn resources on burning fossil fuel to power up generators causing both wastage and environmental pollution and noise pollution. They also provide start up capital for businesses and also provide support funds and training for businesses mostly in agriculture.

 

[Deleted member 28127]

Sometimes government rules are against the existence of a company means the law obliges you to sell this thing for 1100 neira while the cost is 1160 neira so you couldn't sell at 1100 neira but at least 1200 neira.

 

[Chibson]

Of course, the government have a whole lot of rules to play in the success of any business in any country. it is the responsibility of the government to provide an enabling environment for businesses to thrive and also to survive on the long run. In a situation whereby the government does not provide an enabling environment for businesses to survive and grow then it will definitely affect the economy of that particular country. It is also the responsibility of the government to provide security for businesses to thrive on. If businesses are not secure in a particular country then you will observe that there will be a limited number of investors ready to invest in businesses in that particular nation. The government also makes laws which directly and indirectly affects survival and growth of businesses in a nation. Sometimes the government may decide to give financial assistance is to growing businesses which may be small and medium enterprises.

In growing countries, some of them face the problem of bad road network which directly affects the transportation of business goods or materials from one location to the other. It is the responsibility of the government to provide all these things.

 

[PICKFORD]

Yes the government is an important factor in a business environment the absence of the government will mean absence of governmental support towards a particular firm or company government can assist a firm by providing subsidies as well as grants or governmental loans two business who are trying to start up or what is known as infant industries.
Although Presently in Nigeria government assistant toward smaller businesses is very low over here there is no good roads good communication network and some young entrepreneurs who have great business ideas cannot even get a loan at least to start up their business. so you see the absence of a government will mean absence of a business activities
Government also provide security 4 products an absence of government will mean that people's goods and services are not protected thereby leading to theft and fraudulent activities which will in turn affect the standard of living as well as cost of living of the people that is why I it is advisable for the government to be active in area of security not only security but also in the area of social infrastructure aswell

 

[Asad Ali]

Well, I'd say the government has a hand in the business. Certain policies that the government may enact will undoubtedly affect both large and small business owners.