8/12/2019 CaseNoteBGR

1/3

Roles and Relationship of Business and

GovernmentIntroduction

This case focusses on the worldwide relationship between various governments and businessesand some of the issues related to it.

Some analytical frameworks have been suggested which may be helpful in managing relationwith government more effectively.

The government and business, both have been engaged in defining and fulfilling the needs ofcommunities.

Their relationship has been marked by both suspicion and trust, conflict and cooperation.Roles of government

Individualistic Society

Role of Government is limited. Purpose of the Government is to protect property, enforce contract, and keep the market

place open to promote competition.

When does the government Intervene? In a Crisis situation:-epidemics, pollution, economicdisaster, war etc.

Direction of the government is decided by interests groups which fix government priorities. Properties: Suspicious of the government Example of this type are USA, Western Economies

Communitarian Society

Role: Authoritative Purpose: Define & satisfy the needs of the community. Envision the good for the society. Intervention: Rebellion or revolt or uprising Direction: Plays a central role in generating/ imposing consensus of the society to support

the direction decided by the government itself. Properties: Hierarchical or egalitarian Example: Japan, Germany, UK, USSR

Structure of government

Governments are not Monoliths. They are a warring collection of

o Executive Agencieso Legislative Bodieso Courtso Other Interest Groups

8/12/2019 CaseNoteBGR

2/3

A good government listens to the voices of business, labor, and other interest groups and takes aharmonious decision suitable for everyone.

A Strong Governmento Creates consensus in Societyo Change behavior of important groups for policy makingo Change structure of society to achieve its goal.

Role of Business

Sources which provide legitimacy to corporations and a source of management authority

The shareholders Banks or debt holders The managed The government

Structure of Business

Communitarians

Participants tied by consensus Relation amongst competitors is competitive Perceived to be permanent and passed on to the future Planning and decision making without governments involvement

Individualism

Participants tied by contract Relation between competitors is mix of rivalry and cooperation Temporary arrangement Planning and decision making with the consent of all the participants and the government

Conclusion

Positive Business-Government Relationship(BGR) is desirable Symbiotic relationships and resource interdependence accepted cognitively, but not behaviorally Positive BGR, necessary societal demands may saturate the joint decision making. Negative

reactions from business increase when demands from Government, Society increase

If Govt. intervention is required & govt. is unresponsive & inefficient, what strategies mustbusinesses develop?

Submitted by-

Gundeep Singh

DM15220

8/12/2019 CaseNoteBGR

3/3