Discussion:
Create a 2-3 pages in length
Q: Research, identify and discuss the advantages and disadvantages of business regulations.
Business Regulations
Business regulations in the United States are designed to keep businesses running smoothly and to ensure each business functions under the same regulations and rules. While strict rules and regulations can make it more difficult to conduct business these regulations provide a standardized approach to any given situation which results in a more uniform response. Business regulations are established by the government to ensure fairness in trade and business practices. While a true free market will not have any business regulations this is not feasible if there is to be a strong economy.
Business regulations protect consumers, the environment, and the business and to look out for the best interest of society as a whole. In its purest form, a free market economy is when the allocation of resources is determined by supply and demand, without any government intervention (Seabury, 2010). The problem is without business regulations there would not be proper control of the competitive environment and only the very fittest would survive with the little guy being made obsolete. Without regulation businesses would monopolize industries making competition unfair and impractical for the small business.
When businesses are not regulated the wealth is not evenly distributed making sure some people in society will never be afforded the opportunity to succeed. In order for the economy to be stable their needs to be business regulations to guide the process. The lack of business regulations can result in overproduction or underproduction creating swings in industry profitability causing major challenges to the economy. In order for an economy to be stable the business industry must be stable. If the business markets are unstable then the stock market will become less stable leading to potential financial crisis.
Another advantage to business regulation is the environment. Businesses that are not regulated do not take the same social responsibility as businesses that are required to take steps to ensure they do not create n necessary, negative impact to the environment. For example business regulations stop business form dumping harmful toxins into a waterway. Without these regulations businesses would be free to create any harm to the environment without fear of repercussions. For example, when oil was spilt in Alaska and the Gulf of Mexico creating untold harm to the environment and negatively impacting the sea and wildlife, business regulation made sure the business took responsibility. It cost billions of dollars to clean up these spills.
Business regulations protect the worker. Businesses are regulated by many different agencies to ensure they behave a certain way. OSHA is an agency responsible for ensuring the business keeps their environment safe so that workers do not become harmed by unnecessary accidents and to ensure they are not forced to work in poor working conditions. When a worker is harmed due to the actions of the business they will be properly protected and the business will be forced to take steps to prevent the accident or conditions from occurring.
Without these types of agencies to address workers need the business, as in the past, would allow the worker to work in horrible conditions with little or no benefits. Other government agencies regulate the types of salaries a worker will receive by establishing a minimum wage. And ensuring the worker is treated fairly, equally, and without discrimination. Due to business regulations workers no longer have to put up with sexual harassment or discrimination in the workplace and will receive a comparable salary for the same work and experience. Despite the many benefits of business regulations there are also some disadvantages.
One disadvantage of business regulations is creates a huge government bureaucracy that stifles growth and it also monopolies to exist if the monopolies benefit the government. Due to regulations everything is regulated with requires a bureaucratic response by the government. This response is slow and can stile the businesses opportunity for growth. Even though monopolies are not allowed in the American business environment that is not the case, there are many monopolies in many industries that are supported by business regulation (Ingram, 2009). This gives larger businesses the unfair advantage.
When an industry becomes overregulated it stifles innovation and competition, if it is too hard to get into an industry due to complex business regulations, this industry will be avoided by newly formed businesses. This also helps in creating monopolies. When businesses are overregulated it makes them hesitant to step out of the box and introduce new innovations. These innovations could save time or money or even save a life but over regulation makes it impossible to get the new innovation. After reviewing the advantages and disadvantages of business regulation it is obvious that without business regulation even a free market cannot operate properly.
References
Ingram, D. (2009). Government Regulation Factors in Business. Retrieved September 9, 2014 from
https://smallbusiness.chron.com/government-regulation-factors-business-2966.html
Seabury, C. (2010). Free Markets: What's The Cost? Retrieved September 9, 2014 from
https://www.investopedia.com/articles/economics/08/free-market-regulation.asp