The Influence of Politics in Business
Politics and business have been intertwined since the beginning of time. When running a business, you must consider what legislation may be passed in the future and how laws will affect your livelihood. If you do not take the time to become informed, you may be faced with some less-than-desirable outcomes. Please look at the history of politics and business throughout the years explained by Dr. Jordan Sudberg and discover how they have affected one another.
Ways in which politics influence business
1. The government can effectively legislate against businesses that are considered to be unethical, sometimes even openly declaring them illegal. This is not an ideal circumstance for businesses. This can also be seen in many countries around the world enacting regulations or laws that significantly hamper business operations or profits (this concept is known as ‘Regulation’). This can have a significant impact on a business and its employees.
2. The government passes policies to control business decisions related to jobs and working conditions. Often, this will negatively influence the company’s decision-making processes. The government has shown an interest in how business is conducted in recent years, trying to intervene to create legislation that gives them the power of greater control over businesses.
3. Governments regularly give certain businesses special favors, such as tax breaks and subsidies. These “subsidies” are paid for by tax money, so each taxpayer is paying for a particular company to be broken even or turn a profit. As per Dr. Jordan Sudberg, This can cause problems for a company, especially if they are getting free money from the government but also have competition. These competitors may not be getting these subsidies and thus have an unfair advantage. Oil companies are a perfect example of a firm being subsidized by the government, which the US government is constantly subsidizing.
4. According to him, governments often give certain businesses unique benefits, such as tax breaks and subsidies. These “subsidies” are paid for by tax money, so each taxpayer is paying for a particular company to be broken even or turn a profit. This can cause problems with the business because they must take partial credit for this growth while also taking the blame if they fall short of expectations. An example of businesses receiving unique benefits from the government is oil companies that receive considerable subsidies to drill in foreign countries and turn a profit, at the same time being used as an example of why it is not feasible that other countries should do this.
5. Government policies affect how we live by dictating how we shop, travel, eat and conduct our daily lives. Some businesses, such as airlines, have had to make considerable changes to provide better service and increase security to comply with new regulations. From now on, they will have to be able to check their bodies for weapons at security checkpoints, which means that staff will have to be able to handle this task to pass the background check. Furthermore, passengers will not be allowed to bring their weapons onto planes, directly impacting many business models in how they sell their goods and services.
As we can see, politics and business have been intertwined since the beginning. When running a business, you must consider what legislation may be passed in the future and how laws will affect your livelihood. If you do not take the time to become informed, you may be faced with some less-than-desirable outcomes. Please look at the history of politics and business throughout the years and discover how they have affected one another.
