My Future

I have always lived by the quote: “Mistakes are not failures. Quitting is the true failure.” This quote speaks quite simply about not giving up and about realizing one’s dreams to the very end. When a person has a goal, it is important never to lose sight of that goal, even though wrong decisions have been made and even if there are missed opportunities along the way.

A person needs to achieve certain goals in one’s life before you can call them successful. Success is to achieve goals, you have set. I have set certain goals I would like to achieve in my lifetime. Some of these goals are personal while others are professional. My professional goals in life are to find a good job that makes me happy, get a good education, find a job that makes enough money for me to support my family, and help people.

I plan to work in a toys or video games design company after finishing my degree and, hopefully, manage my own business one day. The obstacles that I have gone through have given me the resilience to rise above anything, and not to let failure discourage me from my aspirations. Through my time management skills, I know I will be able to attend classes, activities, and meetings on time. Also, I will make sure that I have something to contribute to the discussions by being prepared and by studying and researching on what is required. With the standard of excellence that our school is renowned for, I hope to be able to make my own contribution, through conscious effort and utmost dedication.

In the future, I envision myself working for a toys design or video games development company to gain worthwhile working experience and to expand my network. Eventually, I hope to be able to manage my own business, providing my clients with top notch toys contrive or video games frames and marketing materials for both small-time and big companies. I believe that the U.O.G will equip me with the needed knowledge, background, and updated set of skills so I can further my dreams and realize my lifelong goals at the right time.

A decade from now, I shall have my own business and work with organizations, charities, and other non-profit projects within my community. I hope to impart to others what I have learned and gained through quality services and business solutions.

source: Internet

Chapter 1: The Powers of Government and Business

The chairman of the board of Globally Diversified enterprises (GDE) has just summoned the board’s secretary (a bright, young MBA fresh from a tour of duty in Singapore with an international management consulting firm). The purpose of the meeting is to review the agenda for the upcoming meeting of the company’s board of directors.
Aside from the usual committee reports - audit, finance, executive compensation, and government - the GDE board meeting will focus on the chairman's quarterly review of operations. A longer-than-usual list of problems has arisen that the chairman wants to discuss with the board.

• The Industrial Machinery Division is behind schedule on its new factory.
• The consumer Products Division has been turned down again by U.S. government regulators on key new products it has developed.
• The government products division is pressing for a larger capital budget.
• The farm equipment division has reported an unexpected decline in sales, resulting from the loss of some overseas markets, especially in Asia.
• The treasurer has deferred the bond issue scheduled for this month in view of the unexplained gyrations in foreign exchange markets.
• The senior vice president for human resources has been spending most of her time in Washingtion, trying to settle a class action suit instituted by the equal employment opportunity commission.
• The vice chairman of the board has been meeting with representatives of the new york state employee's pension fund, a magior holder of the company's stock.
• The executive board of the national association of manufacturers has asked for a go ahead to nominate GDE's CEO as the next chairman of that broadbased business association.

International Comparisons

• History shows us that superior economic performance is not necessarily a question of natural resources, inherited wealth, culture, or geography.

The Policy Tools available to government

• Government payrolls (government as paymaster)
• Government purchases
• Transfer payments
• Government subsidies
• Government loans
• Government credit programs (government as underwriter)
• Government regulation
• Taxation
• Government as business partner
• Monetary policy (government as regulator of the economy)
• Moral suasion (government as leader)

 Let us try to summarize the highlights of the relationship between business and government in a modern society. Government exercises a variety of important powers in dealing with the individual private enterprise, ranging from taxation to regulation. Business, in turn, relies on constitutional protections and its substantial financial resources as well as on public support of its basic role in creating income, employment, and material standards of living. The business-government relationship in a dynamic society is constantly changing. The line between the public and private sectors frequently shifts.

In a global economy, that line is especially difficult to define. As we will see throughout this book, the strategies and issues discussed apply, with perhaps minor variations, to most governments and businesses around the world.

source: Business and Government in the Global marketplace (seventh edition, Murray L. Weidenbaum)

Chapter 2: The Rationale For Regulaiton

A basic way that government exerts its power over business is to issue regulations governing private sector behaviour. The use of regulatory power has grown in the U.S., especially in recent decades. Many rationales have been put forth to justify this type of government intervention in the economy, notably the failure of private markets to work well.
Theories of regulation
Responding to natural monopoly conditions

• The classic case for regulation is natural monopoly.
• Traditional policy toward natural monoploy has been to retain the single large firm in a given sector of the economy, but to use regulation to prevent monopolistic exploitation.
• Unregulated monopolies can cause social losses because they restrict production and raise prices.

Encouraging sensible use of natural resources

• Regualtion or other controls may be appropriate where a common resource must be allocated rationally or where there is no incentive to conserve natural resources.

Requiring producers and consumers to take account of external costs ("Externalities")

• Regulation-or another form of governmental intervention- can be a means to compel individuals or organizations to take account of external costs or spillover effects, the costs they impose on other people.

Proponents of regualtion contend that many of the rules and directives have yielded numerous benefits to the public.

• The regulatory process generates its own set of "externalities." 
• The very substantial costs and other adverse side effects that government regulation gives rise to, society has begun to take a hard look at the full array of government controls over business.
• The expansion of regulation also has required a variety of changes in the way companies manage their operations

There is little justification for either a general attack by business or other groups on all forms of government regulation or for a blanket endorsement of every instance of government intervention in the economy. Proponents of regulation contend that many of the rules and directives have yielded numerous benefits to the public. The NHTSA claims that seat belts, head restrainted, and other mandated safety devices save thousands of lives each year. 

Source: Business and government in the global marketplace (seventh edition, Murrat L. Weidenbaum)

Chapter 3: Government and The Consumer

Competition in the marketplace provides an opportunity to encourage the production of safer products because companies that earn reputations for making unsafe products face retribution from consumers.
Consumer products are subject to regulation by a great variety of government agencies. The Consumer Product Safety Commission (CPSC) has the broadest and most general responsibility.
The CPSC truly has a board mandate:

• To work with consumers and business to foster voluntary standards for product safety.
• To set and enforce mandatory standards.
• To ban unsafe products when a safety standard is not considered to be abequate protection for the public.
• To order firms to give public notice of a subatantial hazard assciated with a product and to repair, replace, or refund the price of a product that presents a substantial hazard.
• To provide information to help consumers select and use products safety.

The Impact on Consumers - Benefits and Costs. Generate substantial costs, which will be brone ulitimately by the consumer in the form of higher prices or reduced variety of products.

• What is an acceptable risk?-Some government regulations aim at eliminating all hazards
• Regulation and Consumers-The regulation of consumer products by the Food and Drug Adiministration (FDA) procides cogent examples of the costs and benefits that flow to the consumer from governmental involvement.
• Product Liability and the Courts-Under the U,S, legal system, the promiart responsibility for product safety is borne by the manufacturers.

 Government regulates a great variety of consumer products and in the process influences business decision making in many ways. At times, some of the agencies regulating consumer products rely on the information approach. On occasion, providing pertinent product information can benefit consumers more quickly than regulation. Potentially, market competition can play a key role in reducing injuries from the products consumers use.

Source:Business and Government in the Global Marketplace (Seventh edition Murrary L. Weidenbaum)

Chapter 4: Protecting the Encironment

Environmental protection programs are a very large area of government regulation and a major reason for growth of public-sector involvement in private decision making. This growth has coincided with substantial improvement in the quality of the environment. The polluter received private benefits (easy disposal of wastes), but social costs ("externalities") in the form of dirtier air and water resulted.

The basic assumption is that people pollute, not because they enjjoy spoiling the environment, but because polluting is cheaper or easier than not polluting. The idea behind pollution fees is not to punish polluters but to get them to change their ways as high-polluting products become more expensive than low-polluting products. The basic idea is that the price of a product should reflect its costs to , or burden on, the environment.
The Toxic Substances Control Act (TSCA) gives the EPA substantial power over the chemical industry, including the following:

• Authority to require testing of new and existing chemical compounds.
• Mandates for premanufacturing notices 90 days prior to the production of any new chemial or significant new use of an existing chemical.
• Power to control the manufacturing, processing, distribution, use, and disposal of any chemical substance.
• Required reporting, which covers each chemical produced by every chemical manufacturer.

The Development of Environmental policies. In the United States, the EPA is the main federal organization operating in this area, and it focuses on issuing rules, approving permits, and enforcing its regulations.
The Range of national Environmental Regulation. Activities of the EPA center on setting and enforcing standards relating to environmental concerns. The EPA has several means of enforcement. Upon finding a violation, it may seek voluntary compliance. If that fails, it can order compliance and take violators to court. Four major environmental statutes cover hazardous and toxic substance; they are usually referred to by their acronyms: TSCA, RCRA, FIFRA, and CERCLA or Superfund.
The costs of compliance with environmental laws is quite uneven. A proportionately greater burden is borne by small factories because of the economies of scale incolced in regulatory compliance.

Source:Business and Government in the Global Marketplace (seventh edition Murray L. Weidenbaum)

Chapter 5: Achieving Equal Employment Opportunity

In a great variety of ways, government influences hiring and firing, pay and working conditions, training and retirement plans, relations with unions, and many other human resource practices of the private sector. Government responsibility for eliminating job discrimination in the U.S. rests primarily with two federal agencies: the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance (OFCC) in the Department of Labor.
The statutes governing antidiscrimination guidelines are numerous and complex. Individual or class action suits can be filed against a firm under any one or a combination of the following laws and directives:

• The Fifth and Fourteenth Amendments to the Constitution.
• The Civil Rights Acts of 1866, 1870, 1871, 1964, and 1991.
• The Equal Pay Act of 1963...
• The Vocational Rehabilitation Act of 1973.
• The Vietnam Era Veterans Readjustment Assistance Act of 1974.
• The Pregnancy Discrimination Act of 1978.
• The Americans With Disabilities Act of 1990.

The Agencies and Their Mandates. Title VII of the Civil Right act of 1964 prohibits job discrimination on the basis of race, color, religion, sex, or national origin
The EEOC was established by Title VII to help carry out the 1964 law. The commission conducts its enforcement through the following procedure: People who believe they have been discriminated against file charges. Practitioners of EEOC litigation report that employers usually try to settle these cases out of court.
Guidance From Supreme Court Decisions. First of all, over discrimination is wrong and illegal. second, there is a continuing role for affirmative action because discrimination and its legacy in the workplace have not been fully eliminated
On balance, serious studies of the benefits and costs of equal emplyment opportunity programs and especially of affirmative action programs come down onthe positive side. Critics maintain that such interventions in the marketplace create divisive work-places and often harm the intended beneficiaries, aside from the general objection to government intervention in the private economy.

Source: Business and government in the global marketplace (seventh edition Murray L. Weidenbaum)

Chapter 6: Government and The Workplace

The rising role of government in the workplace is a key example of the public's unwillingness to accept all of the impacts on society that result from the unregulated workings of the free market.
The Occupational Safety and Health Administration (OSHA) was created in 1970 "to assure so far as possible every working man and woman in the nation safe and healthful working conditions."

• Encouring employers and employees to reduce hazards in the workplace and to institite health and safety programs.
• Establishing responsibilities and rights for employers and employees (mainly resposibilities for employers and right for employees)
• Authorizing OSHA to set mandatory job safety and health standards.
• Prociding an enforcement program.
• Encouraging the states to take responsibility for administering their own job safety and health programs, which must be at least as effective as the federal program.
• Setting up reporting procedures for job injuries, illnesses, and fatalities.

Compliance with OSHA regulations is enforced through inspecions. Target health hazards are associated with the five most hazardous and most commonly use toxic substances: asbestos, carbon monoxide, contton dust, lead, and silica.
Contributory negligence by the employee is not a defense for the employer, nor is the worker cited.
If every firm in the country were to comply fully with OSHA's standards, total injuries would be reduced by only 10 to 20 percent. The smaller firms tend to bear a disproportionately large share of the expenses that arise from employee safety and health regulation.
Researchers who have focsed on workplace safety and health regulation almost uniformly conclude that the fundamental flaw in the OSHA approach is the decision by Congress at the outset ro rely primarily on government-promulgated standards. One study estimated that only about 10 percent of injuries are preventable by enforcement of OSHA standards. The tole for training would seem to merit more attention than it receives under the traditional OSHA approach.
Statistically, the turnover rate among workers is the most important single factor indetermining injury rates.
After the collapse of the number of private pension plans, in 1974 congree passed the Employee Retirement Income Security Act 9ERISA). The main purpose of that law is to protect the rights of participants in retirement plans so that workers receive the benefits they have been promised.
The growth iin government regulation of the workplace has resulted in a comparable expansion in the size and role of human resource departments of businesses and other employers.

source:Business and Government in the Global Market Place (seventh Edition Murray L. Weidenbaum)

Chapter 7: Traditional Economic Regulation

Economic regulation - traditionally exemplified by that now-defunct industry regulatory bady, the Interstate Commerce Commission - was considered virtually the entire field of regulation 30 or 40 years ago. This form of regulation, which still exists, is characterized by the use of independent, politically balanced agencies organized more or less along industry lines. The most widespread use of economic regulation is at the state level, where public utility commissions continue to hold jurisdiction over electric, gas, and telephone utility companies.
The end results, the maximum allowable rates to be charged, are fundamentally based in two key objecitives:

• To protect consumers against exorbitant charges that might otherwise result from the monopoly aspect of public utility franchises.
• To set rates for service at levels that will afford the companies an opportunity to earn a fair and reasonable rate of return.

The movement to regulate electric power resulted from two basic factors.

• Consolidation in the early 1900s of competing utilities often rpoduced price fixing
• Most students of the subject assumed that utilities are natural monopolies and that attempts to introduce competition would increase unit costs by forcing duplicaiton of costly transmission and distribution networks.

The principal solution to these problems, which evolved over a considerable number of years, is to permit franchised monopolies to operate under government rule makeing. Regulation is designed to serve as a substitiute for competition.

Improvements in the technology of transmission have made spatial location of power generation less important. The utilities' monopoly on power generation has been broken by several thousand small power plants that have been built as a result of the Public Utility Regulatory Policies Act of 1978.

Some energy experts have gleaned some lessons for the future from the Californian experience:

• Replacing regulation with a well-functioning competitive market is not easy.
• Consumers cannot be insulated from changes in wholesale prices
• The real benefits of electricity deregulation come from encouraging new investments in more efficient power plants.

Economists' suspicion of efforts by business to restrain trade dates back at least to Adam Smith's oftenquoted statement, "People of the same trade seldom meet together, even for merriment and dicersion, but the conversation ends in the conspiracy against the public, or in some contrivance to raise prices."
Two conflicting viewpoints dominate economic theorizing on antitrust. One clainms that the only legitimate gola of antitrust is consumer welfare, which is equivalent to economic efficiency. An alternative view is the competitive approach. Its proponents believe that the intent of the sherman act is to establish the right for buyers to pay no more than the competitive price. This group notes a part of Adam Smith's wealth of nations that is rarely quoted: "It is impossible indeed to prevent such meeting, by any law which either could be executed, or would be consistenet with liberty and justic." On the other hand, those who take a structural view of the antitrust process believe that there laws should be used to reorganize the economy.
The reach of government antitrust agencies is being undercut by three key factors: the internationalization of production; the increased cross-border flows of information, money, and technology; and the resultant rise of the transnational enterprise.
The influence of fedal economic regulatory agencies on the transportation, banking, and communications industries has greatly declined in the past decade. Antitrust regulation has also changed significantly during recent decades. The criteria for judging harmful levels of industry concentration have been altered.

Source: Business and Government in the Global marketplace (7 edition Murray L. Weidenbaum)

Chapter 8: Economic Deregulation

Three streames of economic research and policy analysis dealing with different aspects of regulation reached a confluence in the 1970s.

• The firsr, and most substantial, focused on the fact that the widely distributed burdens imposed by economic regulation.
• The second stream dealt with the fundamental nature of the regulatory process.
• The third focused on the cost of regulation.

It is evident that a great deal of the traditional economic regulatory apparatus has been cut back.

• 1978-Transportation: Airline Deregulation Act gives carriers freedom to decide fares and routes and phases out CAB.
• 1984-Telecommunications:AT&T agrees to divest local operating companies as part of antitrust settlement with Justic Department.
• 1999-Financial institutions: The Gramm-Leach-Bliley Act repeals the Glass-Steagall Act restricting banks from providing other financial services.

Inevitably, the wrenching changes brought about by deregulation have generated problems for epecific companies. Several types of effects on the competitive structures of the deregulated industries have emerged to date

• The range of variability of performance among the companies in the deregulated industry increases.
• The most profitable products come under substantial price pressure.
• The resulting industrywide profit squeeze forces personnel reductions and other cost-cutting efforts.

Financial institutions have responded to rate deregulation by closiing branch offices and reducing payrolls

Two types of winners emerge from deregulation

• category consists of companies that tend to serve national markets with a full line of products and services.
• category of winners under deregulation is low-cost producers that focus on a highly price-sensitive segment of the market.

The major winners underderegulation are the customers of the previously regulated industries.

Source:Business and Government in the Global Marketplace (7 Edition Murray L. Weidenbaum)

Chapter 9: Terrorism and Business

The recently created Office of Homeland Security, located in the Executive Office of the President, has overall responsibility for developing governmentwide policies on enhancing the nation's domestic security. At least for a while, the struggle aginst international terrorism has become the number one priority among federal government programs and activities. The larger role for government is taking many forms: increased military spending, unprecedented emphasis on homeland security, special assistance to companies heavily ulation of private activities, especially business. However, what is Terrorism? Terrorism is the deliberate and systematic murder, maiming, and menacing of the innocent to inspire fear for political ends

Involves a violent act or anact dangerour to human life, property, or infrastructure; Appears to be intended

• to intimidate or coerce a civilian population
• to influence the policy of a government by intimidation or coercion;
• to affect the conduct of a government by mass destruction, assassination, kidnapping, or hostage-taking

The Treasury Department has directed these private companies to do many things

• to conduct more "due diligence" investigations of account holders, especially private banking clients, to make sure they are not terrorist groups.
• to set up anti-money laundering programs - or to expand their existing efforts - in order to prevent the conversion of illegal funds into legitimate financial accounts.
• to report "suspicious" activities to the Treasury Department.
• to cease transactions with "shell banks" that have no physical presence in any country.
• to gain more information about the foreign banks that they do business with.
• in the case of hedge funds, not to accept money from anonymous sources.

The first role of business in the struggle against terrorism is helping to cut off the money flows to the terrorists. Business also designs and produces the antiterrorist equipment and systems used by both the public and private sectors. Business develops and produces the medicines and the related equipment used to respond to biological and chemical attacks. In its overseas activities, private enterprise helps bolster the economies of the nations that are America's allies in the struggle against terrorism.
The most indirect role of business may be the most powerful-to maintain the flow of goods and services to consumers and, in the process, to generate the jobs incomes, and taxes that keep the economy moving ahead and the government adequately financed. Heightened security measures are basically an expense. a bigger outlay for these overhead items raises the cost of production. Many companies who have been producing for conventional markets are adapting their products to meet the rapidly rising demand for antiterrorist equipment. Domestically, some companies are decentralizing their operations to avoid excessive concentration of resources in one highly visible and vulnerable headquarters office.
The struggle against terrorism is being waged on two fronts. the forst is the most bovious: Government forces, military and civilian, directly fight the terrorists and their networks. The second front is also vital, especially in a long struggle.

Source:Business and Government in the Global Marketplace (7 edition Murray L. Weidenbaum)

Chapter 10: Reforming Government Regulation

Over the years, many efforts have been made to improve the process of government regulation of business, Some of the changes have required legislative enactments; they have been slow in coming. Many others could be carried out by executive branch authority; subatantial progress has occourred in that way. The advent of a professional literature on measuring the impacts of regulation has fueled a concern about improving the effctiveness and reducing the burden of the vast network of rules, prohibitions, and requirements that government imposes on the pricate sector.


Abrute fact should be engraved on our consciousness: given finite resources, when we choose to reduce one toxin, we also choose to tolerate another. The American people want a safe and healthy environment, but they also want a strong national defense, first-rate transportation, better and cheaper medical care, good homes, laborsaving appliances, a varied diet, and entertainment. Those who uphold the encironment as a primary value compete daily with the advocates of these other worthy objective.


Given the variety of regulatory statutes and rulings, it is likely than an array of regulatory reforms may be needed. At the heart of benefit-cost, cost-effectiveness, and benefit-risk analyses is the proposition that the existence of finite resources requires society to set prioriries and to make choices.



Source:Business and Government in the Global Marketplace (7 edition Murray L. Weidenbaum)

Chapter 11: Business, Government, and Globalization

Business and government are closely linked in one of the great - and controversial - developments of our time: globalization, the rising tendency for national borders to be crossed by people, goods, services, money, information, and ideas. Transportation and communication barriers between nations have fallen as new technology has dramatically reduced the expence and time required to move people, goods, and information across borders. Yet the key changes in international relations have not been economic, although the economic ramifications are powerful.



It seems to be clear that the substantial internationalization of business activity that has occurred in recent decades is a continuing phenomenon. However, the costs of globalization, even if they are much less than the public believes, are far more visible than the benefits.


The debates over globaliztion obscure important limitations to the development of a truly global marketplace. The mobility of enterprises-of their people, capital, and information-is reducing the effective power of government. Many firms are attemptiing to adjust to this new environment by shifting to a more nearly horizontal, decentralized organization.

The extent that human capital isincreasingly seen as a key resource in business and economic competition, the nations and companies that perform well will be those that can generate, attract, and keep educated, skilled, and experienced workers, managers, and entrepreneurs.

The tension between business and government is exacerbated by the rapid rate of social, economic, and technoligical changes around the globe. To the extent that human capital is increasingly seen as a key resource in business and economic competition, the nations and companies that perform well be those that can generate, attract, and keep educated, skilled, and experienced workers, managers, and entrepreneurs.


Source:Business and Government in the Global Marketplace (7 edition Murray L. Weidenbaum)

Chapter 12: Government and International Commerce

Many discussions of international economic issues ignore the vital role of private enterprises and the effects of public polilies on business. When we examine foreign trade from that viewpoint, we gain new insights. At the other end of the spectrum of global activity, an extreme case of transnational business was cited by former U.S. Secretary of State George Shultz.
The most striking indicators of continuing American influence, if not power, in the world economy are quite unconventional. In the 1980s, some of the most powerful calls for restraint of international trade and investment came from the American automotive industry and the United Auto Workers union, which earlier had been bastions of free trade.
The argument in favor of freer trade is supported by historical evidence. Through most of the twentieth century, the United States played a leadership role in devekoping the world trading system.
Around the beginning of the twentieth century, the dynamics of the American economy shifted. Exports and imports became smaller shares of GDP.

Generalizing from historical experience, the advantages of freer trade are numerous

• Open trade contributes to lowering inflationary pressures by increasing the supply of goods and services competing for the consumer's dollar
• Open trade minimizes the role of government in influencing private-sector decisions in the international marketplace.
• Open trade improves the efficiency with which resources are allocated by permitting the operation of the principle of comparative advantage. tehreby, the society can achieve more growth, higher levels of employment, and an improved living standard.

The United States is hardly an island of free trade in a world of protectionism. The federal goverment impose numerous obstacles to imports, restricts various types of exports, and also dicourages or prevents certain types of foreign investment. Five major types of trade obstacles inhibit imports into the United States

• Buy-American statutes, which give preference in government procurement to domestic producers
• The Jones Act, which prohibits foreign ships from engaging in waterborne commerce between U.S. ports
• Statutes that limit the timport of specific agricultural and manufactured products
• Selective high triffs on specific items
• Regulatory barriers aimed at protecting domestic producers

Perhaps the most striking indicators of continuing American influence, if not power, in the world economy are quite unconventional.

 source: Business and Government in the Global Marketplace (7 edition, Murray L. Weidenbaum)

Chapter 13: Global Geopolitics of Energy

Energy policy is an amalgam of economic, political, military, and foreign policy concerns. The resulting impacts on business are pervasive and are best considered in a global context.

As a general proposition, a nation's energy security should be viewed in dunamic terms. Energy security is tuly achieved through actions that enhance an economy's ability to respond to supply shocks and the volatile prices changes associated with such shocks. Numberous actions can reduce a nation's vulnerability to aggressive energy geopolitical pressures

• Expansion of emergency stockpiles such as a strategic petroleum reserve
• Reliance on a greater variety of standard as well as nonconventional energy sources in order to reduce vulnerability to supply disruptions in any individual region or production category
• Developing the flexibility to switch quickly to alternative fuels
• Maintaining an effective economic stabilization mechanism, comprising rapid adjustments in monetary and fiscal policies that can help to cope with large and disruptive shifts in energy prices.

Identifying sensible policy options is far easier than translating them into proposals that generate public support.
A variety of suggesttions has been offered to foster the development of a comprehensive energy policy. The following is a representative sampling:

• Rely more heavily on the information approach to conserving energy.
• Procide temporary tax subsidies for the purchase of new hybrid fuel cell vehicles.
• Spend more government money on improved highway infrastructure to reduce the amount of gasoline that motorists use.
• Explore for and extract petroleum from a portion of the Alaska National Wildlife Reserve (ANWR)
• Eliminate or reform Corporate Average Fuel Efficiency (CAFE) standards that stipulate required minimum motor vehicle mileage in fuel usage.
• Government regulators should adopt "one stop" shopping when it comes to approving energy installations.
• Eliminate one of the most serious objections to nuclear power-where to store spent fuel.
• Promote maket forces in the consumption of energy
• Promote the construction of natural gas pipelines from the Arctic to the lower 48 states.
• Recognize the domestic weaknesses and fragility of some of the major energy exporting nations.

Developments elsewhere on thr globe have the potential to strongly influence U.S. energy conditions. The seriousness of the potential impacts of changes in energy availability on our society may encourage governmental leaders to develop foreign policies that improve American relationships with the major energy exporting nations and that enhance their lobg-term stability.

source: Business and Government in the Global Marketplace (7 edition Murray L. Weidenbaum)

Chapter 14: Government Credits and Bailouts

One of the least understood components of the government's arsenal of power over the private sector is its ability to provide cerdit to various individuals, business firms, and other organizations.
The federal government subsidizes private economic activity in a great many ways and, as we will see, the typical credit program generates a specific benefit or subsidy to the recipients. The common characteristic of all subsidies - credit programs and other aids - is that they constitute a wedge between the cost to the seller of a product or service and the price paid by the buyer. A subsidy may go to producers or to consumers, or it may be shared. The general intent of a subsidy is to encourage some activity, usually to cause more to be produced or consumed than would result from the unaided operations of the competitive marketplace. A basic function that financial institutions are supposed to perform is assigning appropriate risk premiums to borrowers of different financial strengths.

Contrary to popular opinion, government credit programs are not costless, either to the Treasury or to citizens in general.

• The economic cost. since they do little to increase the total supply of investment funds in the economy, government credit programs take credit away from potential private borrowers.
• The initial fiscal cost. To the extent that government credit programs increase the total size of government-related credit, they cause an increase rates that are paid in order to channel these funds away from the pricate sector.
• The ultimate fiscal cost. When defaults occur on the part of the borrowers whose credit is guaranteed by the federal government,  the Treasury winds up bearing the ultimate cost of the credit.

Most fundamentally, an economic climate more conducive to provate saving and investment would reduce the need for private borrowers to seek federal credit assistance in the first place. Such a climate would be fostered by a tax system that tilts in favor of saving tather than consumption and a fiscal policy that avoids the Treasury deficits whose financing competes with pricate boeeowers.

The Chrysler Bailout

• The impact on the federal budget of a Chrysler failure would have been greater than the cost of assistance.
• The social upheaval attendant on a chrysler failure would have imposed substantial, albeit unquatifiable, costs on society.
• Production and employment at Chrysler were more heavily concentrated in the Detroit metropolitan area than were the other U.S. auto manufacturers.
• A Chrysler failure would have led to further concentration of the domestic automobile industry and greater monopoly power in the hands of the sureviving corporations, which would, in turn, have led to higher prices.
• The U.S. balance of payments, already severely in deficit, would have been pushed further into the red as foreign producers captured a share of Chrysler's domestic market.
• While Chrysler's ability to produce small cars in model years 1979 and 1980 was restricted to approximately 300,000 units, the company was building up to a yearly output of almost 1 million small-car units, which promised to sell trongly in the marketplace.

 The provision of credit continues to be a popular way for the federal government to provide assistance to business.

Source:Business and Government in the Global Marketplace (7 edition, Murray L. Weidenbaum)

Chapter 15: Government as a Market

Government in the U.S. - federal, state, and local - constitute large and often very special customers for a wide variety of private business. but it is far more than a mere matter of size.
Federal civilian procurement typically relies on the selection of the offerer of the lowest price based on sealed bids submitted by "responsible bidders". The Federal Supply Service in the U.S. General Services Administration is the agency in charge of buying most of the civilian procurements of the federal government.

For companies that conduct substantial amounts of business with the federal government, the very act of signing a procurement contract forces them to agree to perform a wide variety of socially responsible actions
Privatization can expand or contract the amount of goods and services that government purchases form the pricate sector. The federal government requires that firms doing business with it maintain fair employment practices, provide safe and healthful working cinditions, pay "prevailing" wages, refrain from polluting the air and water, give preference to American products in their puchases, and promote the rehabilitation of prisoners.
There is indeed a range of pricatization actions that governments take, and the effects on the private enterprise vary substantially. Contracting out is the most popular form of privatization. Monopsonistic-completely subject to the changing needs of this one purchaser. Long-term impacts of military procurement, the perverse offect that being a DOD contractor has on firms
Just as commercial markets are far from uniform, the government market consists of a conplex array of changing requirements. Moreover, the manner of production and distribution is not immune from political pressures. On the other hand, the activities of government agencies do not usually generate the economic incentives for good performance to which private enterprises routinely respond.

Source: Business and Government in the Global Marketplace (7 edition, Murray L. Weidenbaum)

Chapter 16: Business and Tax Policy

Business acts as the major tax collector for government, directly paying the taxes on business sales and earning and withholding and transmitting the great bulk of the income and wmpolyment taxes on individuals.  
The four approaches to tax reform analyzed in this chapter - the flat tax, the USA tax, the national sales tax, and the value-added tax -are all variations on the same theme.

• The flat tax is the simplest of the top-down reforms of the federal income tax. Its critics are concerned with the potential capital losses to homeowners and investors in state and local bonds that would arise from the absence of transition rules.
• The USA tax, in contrast, maintains the progressive nature of the current federal tax system while shifting the tax base from income to consumption.
• The national sales tax is the simpler of the bottom=up tax reforms. For most individual taxpayers, it would eliminate the need for dealing with the internal revenue Service.
• The value-added tax, well-known around the world, is the most sophisticated salesbased revenue approach.

Some tax analysts believe that some combination of the four approaches to consumption taxation is likely to emerge. One of the continuing shortcomings of tax policy is that, like other areas of government, decisions tend to be made in isolation, ignoring the impacts of other governmental policies.
The four approaches to tax reform analyzed in this chapter- the flat tax, the USA tax, the national sale tax, and the value-added tax - are all varications on the same theme. All would shift the base of federal taxation from income to consumption and also simplify the process of complying with federal tax law.

Source: Business and Government in the Global Marketplace (7 edition, Murray L. Weidenbaum)

Chapter 17: Business-Government Relations

Virtually every company has developed some capability to understand current and future developments in government and public policy as they relate to its activities- and to adjust and respond to these development.

Senior executives of the largest corporations are devoting substantial amounts of their time - often one-fourth or more - to problems stemming from external factors. The senior managements of major companies recognize that noneconomic factors can be as potent in fashioning corporate behavior as are economic forces. 
Senior corporate executives often list four extrnal areas that take substantial share of their time:

• Meeting with elected officials, say, to discuss specific provisions of a tax bill schedulaed for hearings and likely passage - or to oppose a pending reduction in the loans to business by the export -- import bank.
• Carrying on a dialogue with regulatory personnel - -in the EPA, FDA, OSHA and so on, depending on the products the company produces and the markets in which it is active.
• Maintaining relations with the corporation's various constituencies - employees, suppliers, shareholders, unions, local civic organizations, and a bewildering cariety of public-interest groups.
• Overseeing the company's communications with the public, including a substantial amount of time spent in speech making to business, academic, and professional societies.

In general, the CEO tends to concentrate on external aspects, long-term planning, and basic policy, and the chief operating officer (COO) - -usually the president - focuses on day-to-day managerial functions.
Many companies - foreign and domestic - find it useful to maintain a continuing presence in Washington, D.C., as well as in other national capitals. Three primary functions are performed by company offices located in Washington, D.C., and other national capitals:

• Supplying information to the home office on actions taken or contemplated by government.
• Assisting in obtaining government contracts
• Providing representation before legislative and regulatory bodies.

Lobbying is a communication with public officials to influence their decisions in a manner harmonious with the interests of the individual or grroup communicating. The total lobbying activity includes direct relations with legislative and executive branch officials and, in addition, dealing with the media that abound in national capitals and that influence national agendas.Trade associations interpret government actions and attitudes toward business, and vice versa. Many developments emphasize the role of state governements as regulators of private business.

Source: Business and Government in the Global Marketplace (7 edition, Murray L. Weidenbaum)

Chapter 18: Issues Management

The widely used term issues management is a misnomer. It does not imply the ability of a firm to "manage" the course of a national policy issue. the development of public policy often goes through a readily identifiable cycle. Great variations occur in the manner in which individual companies set up and operate issues- management systems.

Refers to a far more modest and relevant undertaking: managing the company's responses to key public-policy issues affecting its markets, sales, profitability, and internal operations. The first stage of the public-policy process is the latent or developmental phase - Developmental Stage

The opinion-formation or politicizaition phase is the sceond stage of the public-policy process. - Politicization Stage

It is within the developmental and politicization stages that the basic dimensions of a public-policy issue are established. The third stage of the public-policy process is the institutional action phase, when statutes are enacted and regulations are promulgated. - Legislative Stage

The final phase of the public-policy process begins after the enabling legislation has been passed and the rules and procedures have been formulated by the appropriate executive branch agency. - Implementation Stage. The potential for influencing the result is greatest during the early phases of the public-issue development process, before the issue has been framed and attitudes have become entrenched.

Five basic elements provide the framework for the typical corporate issuesmanagement program:

• Identifying public-policy issues and trends.
• Evaluating their impact and ranking them by priority to the company.
• Establishing a company position on the high-priority issues.
• Designing company actions and responses to help achieve the desired outcome.
• Carrying out the planned actions.

 Identifiying and responding to specific public-policy issues that strongly affect private business is a difficult and challenging assignment.

Source: Business and Government in the Global Marketplace (7 edition Murray L. Weidenbaum)

Chapter 19: Business Participation in Politics

The extensive impacts of government on business dicision making have results in expanded interest by business executives in participating directily in the political process. Industry leaders usually attempt to use the political process to slow or shape government intervention in the provate sector. Legislation enacted in the 1970s to prevent illegal political contributions by business has been an important factor in changing the nature of business participation in politics.
Corporations can participate legally in a wide cariety of political activities. Federal law governs only political activities involving candidates for president, vice president, and congress. Soft money payments made directly to a political party were exempt from the federal limits on the size of indvidual contributions because ostensibly the money was not going into the campaign of a specific candidate. Many business political donations have the effect of maintaining access to currect policy makers rather than attempting to change the actual composition of government decision-making bodies. Traditionally, Republican candidates have been supported more generously than Democrats.
Despite the attention given to PACs, congressional condidates usually raise most of their money from individual citizens. Businesses can legally make indirect contributions to political parties. Presidential election campaigns are financed primarily by the $3 checkoff on the feeral indvidual income tax return. The greater the importance of government to a firm's operations, the greater the likely scope and magnitude of its involvement in political acticity. The 2002 federal election reforms are expected to enhance the role of state and local political parties because they are not covered by the restrictions that now apply to national political parties. The largest donations to the state Democratic Party come from labor unions and trial lawyers. The major Republican contributions are real estate and securities firms and health professionals.
Business executives, as well as the public, might bear in mind Peter Druchker's thoughts on the subject of business in politics: "if I were to have a criticism of the American Businessman, it is that he has made no attempt to understand the political process. He attempts to influence it without understanding it." Some business organizations attempt to meet Drucher's chanllege.


Source: Business and Government in the global marketplace (7 edition Murray L. Weidenbaum)

Chaper 20: Challenges to Corporate Governance

The governance of corporations in the United States is regulated primarily by the requirements contained in state corporation statutes. In addition, the U.S. Securities and Exchange Commission regulates many aspects of corporate reporting as well as the issuance of company stock for interstate sale and, as dicussed later, the voting process and related procedures at corporate annual meeting.

To many traditional critics of business, the managements of large corporations are oligarchies, responsible to no one buy themselves. Corporate boards of directors are thus characterized as self-perpetuating groups, accountable to themselves or to the chief executives who supposedly select them.
As a large investor in many companies, Calpers urged stremgthening the role of the outdie directors in sevel ways:

• Adopt a more stringent definition of independent director.
• The chairman should be an outside director
• No director should serve on more than three boards
• A formal program, in addition to the annual meeting, should be set for sharehoulders to communicate with directors.

Most past changes in corporate governance have taken place voluntarily. One of the first efforts to mobilize stockholders to achieve a social objective was launched in 1966 by activist Saul Alinsky. A statistical analysis of shareholder activism during 1982-1998 reveals the limitations of these efforts. Virtually all of the companies- Enron, Global Crossing, Tyco, Adelphia, WorldCom - whose activities enraged the public in 2001-2002 were ignored by the activists.
Under established law, the board of directors is elected by the shareholders to exercise the basic authority over the corporation. In practice, the board is not as all-powerful as would appear from a simple reading of corporate law. In the great majority of cases, the CEO also serves as chairman of the board. The 2002 corporate reform statute specifies that the audit committee of the board, rather than the management, is directly responsible for the appointment, compensation, and oversight of the accounting firm selected to serve as outside audito.The Sarbanes-Oxley Act of 2002 prohibits investment banking firms from punishing analysts who write report critical of the firm's clients.
There are many changes now occurring in corporate government, both on a compulsory and on a voluntary basis. The evolutionary pattern, which has been the experience in the United States over the years, also mirrors the status of the common law that governs much of business activity in the United States and the United Kingdom.

Source:Business and Government in the Global Marketplace (7 edition Murray L. Weidenbaum)

Chapter 21: The Future of the Business Firm

The demonstrated ability of the business corporation to gradually adapt to shifting political, social, and economic forces is the key to its continuiing strength and resilience. The corporation is likely to continue to be the dominant way of organizing economic activity in the developed wourld through the twenty-first century
Responding to a variety of new influences, the business corporation has gone through three stages of development: from the simple, competitve classical model of the nineteenth century to the managerial model of the first half of the twentieth century to the social environment model characteristic of the second halp of the twentieth century. The United States is in the midst of several important transitions that affect business-government relations in powerful ways.
In reality, of course, corporations-especially the larger and publicly owned ones-have always departed substantially from the narrow confines of the profitmaximizing model of classical economics
Three models of business organization:

• The classical market model, in large measure the original concept of business organization, was based primarily on the British economy of the nineteenth century.
• The managerial model was the next major development in terms of the fundamental approach to the organization and functioning of the business firm. Its basic identifying characteristic is the acknowledgment of the effective separation of ownershiop form management.
• The social environment model is the most recent of the three approaches to business behavior.

The latter tend to emphasize growth in size, market share, and profitability, as well as the security of their position in the community and in society generally. The broader social purpose of the corporation is een as creating wealth, society may have a moral as well as economic interest in business taking account of all the firm-specific investments.
In the broad sweep of American history, the transcendent ideological debate has been between the jeffersonian and Hamiltonian approaches to democracy: centralizing or decentralizing the location of power in society
In Western Europe, numerous barriers to the adoption of a more efficient operation of industrial facilities have been cited repeatedly as a key reason for the dlower growth of employment and economic activity than have occurred in the United States in recent decades.
A new policy climate for business may be takinig shape in the early twenty first century. It is an external environment less hospitable than that existing during the administration of Ronald Reagan.
Potential areas for deeper goverment involvement are numerous:

• The rising concern over the threats from international terrorist groups and the difficulty of reconciling sprcific responses with traditional notions of freedom and privacy.
• Renewed emphasis on environmental protection and fairness in the treatment of employess.
• Reducing the sale of illegal drugs and dealing with the adverse impacts of widespread use of various "chemical substances".
• Better education of the workforce so that American business can compete more effctively in an increasingly global market.

Source: Business and government in the Global Marketplace (7 edition Murry L. Weidenbaum)