Business in the Modern World of Globalization and Liberalization - Coursework Example

Business and Government Business and Government In the modern world of globalization and liberalization most of the business in public sector (Sector under government’s control) has give way for the private participation. Most of the governments are now encouraging the private sector participation in more areas though some of the critical sectors still they keep under the control of governments. For example the defense sector most of the governments keeping under their control since this filed is extremely volatile and the private sector participation will cause problems for the sovereignty of the states. Now the question is how far the governments can go ahead with liberalization policies especially in the field of service sectors like hospital, water supply, electricity or power supply, transportation etc. Government control of business No governments can completely give up the service sector to the private sector since it is directly linked with the public. If the private sector is allowed to take control of the service sector, they will give more emphasis to their interests in making profit than giving proper service to the public. This will generate frustration among the public and they will protest against the government and that will be against the political will of the government. Service sector should not be utilized for making profits. All the governments know this principle and while allowing private involvement in this field they will take necessary steps to avoid complete dominance of private sector in such fields. Government ownership of a service-advantages and disadvantages to the government Health sector can be taken as an example. In most of the countries the health sector is dominated by public undertakings than the private organizations. Since health sector is an Business and Government 2 essential service the government should provide to the public, direct involvement of government can control the activities in this sector positively. Subsidized health care can be implemented for the deserving ones and thereby government can provide better treatments for everyone irrespective of their financial capacities. Social equality can be achieved through government involvement in service sector. ” If we want cheaper and more creatively delivered health care, we need less, not more, government. According to Dr. David Gratzer of the Manhattan Institute, in 1960 about half of health-care expenditures were directly controlled by consumers. Today, it is about 15 percent. Over the same period, in which consumers have relinquished control, per-capita health-care spending has quintupled and costs have skyrocketed”. When someone else is paying, individuals behave differently. (Star Parker Scripps -We need less government involvement in health care, not more) The health care rates are going up rapidly. If the government involvement is more people will try to exploit the subsidized treatment facilities rather unnecessary also. In some cases even for small diseases they will collect large amount medical bills from the hospital authority by influencing them with bribes and then they will reimburse it from the government. The governments also have certain limitations in investing health sector alone. Though they must concentrate more in this sector, the growing population rates and other economic crisis are forcing the government to allow private sector also in this field Since governments are the protectors of the public in all means they have more responsibility than the private sector in conserving the health of their citizens. People with less health problems are the hallmarks of a developing or developed country. Business and Government 3 Government ownership of a service-advantages and disadvantages to the business The government will provide lot of concessions in setting up of health care institutions in private sector. The motive behind such move will be more healthcare institutions means better facilities to the public in terms of quality and accessibility. The business sector can utilize the concessions from the government and at the same time they can start associated business in the label of health care with less government involvement. For example the business sector can start their own manufacturing units of medicines under the health care label which is a largely profitable business. The complete dominance of government over the health industry will definitely be a disadvantage to the business sector. The business sector is eagerly waiting for their opportunities in one of the biggest business as per the turnover. If the government gives more subsidies or reduction in the health sector service charges, then more people will attracted to the government hospitals than the private ones.“The private insurers arent some large profitable organization. Theyre squeezed in the middle - between the consumers and the providers - and the more funds that pass into the private insurers the more will there be medical inflation”( Eleanor Hall- Economist discusses Governments involvement in health funds profits) Private hospitals, though expensive offers lot of facilities than public hospitals to attract people towards them. The negligence will be more in public hospitals than the private hospitals. The private hospitals need to build their brand image to attract customers while for public hospital; brand image is not a problem. Business and Government 4 Government ownership of a service-advantages and disadvantages to the community Mostly the community will be benefitted from the government involvement in the health sector. The community will get quality health care products at affordable price irrespective of the financial capacity of the public. The exploitation from the private sector will be less for the community if the government participation is more. Fast spreading diseases can be controlled under the effective involvement of the government. Health card and health insurance are some other facilities given by the government. Those who have such facilities will get treatments at affordable price and also they can reimburse the expense from the insurance company. The ownership of government, will allow the people to get some reductions in the medical expenses from the public hospitals if they deserved it. Most of the government hospitals offer reduction in medical bills to the poor or physically handicapped people. This will allow public hospitals more accessible to the socially backward people. For general public the public health sector will be more reliable than the private one since the service charges and rates for different tests and diagnosis will be less compared to the private sector. The monopoly of government in health sector will be sometimes be a disadvantage for the community. Private sector participation will improve competition and hence the public will get cheaper rates. The employees of the public sector may not be that much responsive compare to the private sector since private sector employees will be motivated with rewards and incentives for their better performances Total words – 1091 Business and Government 5 Characteristics of business and government The liberal policies adopted by various governments towards privatization led to the deregulations or re-regulations of lot of policies and laws. Foreign investments, looked with suspicious eyes, were cordially welcomed in most of the countries. Insurance and banking sector were earlier confined within the country. But now the scenario has changed. Outsourcing jobs are another example. In the 1970’s or 80’s nobody has even think about working for foreign companies while staying in India like countries. But still regulations are required and no governments can look foreign participations with completely closed eyes. The different regulatory strategies of business by governments are command and control; incentive based regulatory regimes, self regulation and enforced self regulation. ‘Command and control’ (CAC) regulations are deals with preventing environmental problems. In such regulations specific instructions will be given to a company in managing a pollution-generation process. In this type of regulations detailed inspection will be done to see whether the company violating the instructions given or not. Command control regulations were designed to meet the threats from point sources. But now the threat from non- point sources are more compared to the point sources and hence its relevance is in jeopardy. For example this regulation is successful in directing the hazardous wastes to the appropriate disposal facility. But it fails in reducing the hazardous waste produced. “The alternative to command and control regulation is performance oriented regulation, in which specific environmental performance goals such as a reduction in the amount of pollution associated with a process specified by the regulation and each facility is left to determine the best method to achieve this goal”(Ralph Stuart : Environmental economics and Environmental policy) Business and Government 6 It is the duty of every government to protect environment from pollution. They must regulate the activities of organizations which is harmful to the environment. Excess exploitation of natural resources and going after industrialization with blind eyes will lead to the destruction of equilibrium of the environment. Before implementing any new idea or establishing new organizations the government should consider whether there is any harmful effect to the environment. Another method of government regulation is incentive based regulation. “Market-based incentives rely on economic motivations to encourage environmental protection and cost effectiveness. A prominent example of market-based incentives to achieve environmental protection is the use of tradable sulfur dioxide emission allowances to reduce acid rain” (Alternatives to Command-and-Control Regulation.) This program forced every company to install the most-expensive sulfur dioxide control technology. The cost of a ton of sulfur dioxide emission allowances has fallen below projected costs, presumably reflecting technological advances. Similar programs are being developed to reduce regional nitrogen oxide emissions. The main aim of this strategy is to improve performance of an organization not only by the productivity alone, but reducing the harmful effects to the environment caused by the organization. In order to reduce pollution manufacturing units are provided with incentives to replace it’s old conventional pollution prevention equipments with the new ones which will not produce waste and pollution The government regulation to warn the public about the exposure to chemicals known to cause cancer, birth defects, or other reproductive harm has been an incentive to businesses to eliminate such chemicals. Tax and subsidy programs that encourage and discourage economic activity can be Business and Government 7 powerful motivators, either encouraging or discouraging use of natural resources and production or reduction of pollution. Government purchasing practices can also encourage the development of markets for products that are environmentally sounder. Care is needed to avoid excessive acquisition costs for products with small markets and to avoid buying products with one attractive attribute but other unfavorable characteristics. “The efficiency incentives provided by incentive based regulation are sensitive to the length of time between reviews. The longer the duration between reviews, the greater the incentive to reduce costs and improve efficiency, because the regulated company can keep savings achieved within the price control period for longer. (Economic regulation of Transmission using incentive based regulation) But if the time period between reviews is more the performance of the company or the organization may be varied. So the review period should be carefully adjusted. The regulator, mostly the government or the agency appointed by the government will typically try to achieve a balance between costs and revenues over the regulatory period. The regulator will consider the loss due to technical problems which is beyond the control of the employees. They will consider only the human performance for considering the incentives. Self regulation and enforced self regulation are the third strategy adopted by the government. Organizations which enforce self restrictions on their activities are self regulated organizations. In order to attain more and more profit, organizations will search for cheap labor, weak environmental standards. In the absence of strong government regulation corporate companies will never adopt advanced expensive environmental conservation. For them it is the duty of the government to protect environment even if they are contributing to pollute it. Meeting Business and Government 8 the expense to conserve environment is not only the duty of public, but the corporate that are responsible for that also “Does self-regulation actually works and under what conditions is it most likely to be effective? The answer to this question is particularly important for developing countries where corporate self-regulation is often seen as substitute for weak governance structures” (Dana Brown, Making global self-regulation effective in developing countries) Self regulation can affect competition within the market. New ways of business especially under globalization and liberalization resulted in new regulations. The main participants in self-regulation are multinational corporations based in the industrialized countries. Business self-regulation may have deep effects on the nature of governance. Some says that self regulation will reflect the inefficiency of the government. Others say that it can complement government’s effort. Developments in the world political and economic system have set the stage for the expansion of business self-regulation. The corporate companies are establishing their own regulations in their strategies. “The complexity of new technologies and the rapidity of change in market conditions make it difficult to design the kind of hard and fast rules of traditional regulatory systems, and raise questions about whether they are effective and desirable under current conditions”. (Virginia Haufler - Beyond Government: Business Self-Regulation in International Affairs) In fact in some cases the private sector is more capable of enforcing regulations than the government. Consumers of modern century demand not only high quality goods, but also Business and Government 9 products and production processes that meet new standards for human rights and environmental protection. Such demand will force the private sector to enforce self regulations. In short efficiency, reputation, autonomy, liability, and leadership are some of the fundamental factors which force the corporate towards business self-regulation. Total words – 1105 The feasibility study of continued use of coal to generate electricity As everybody knows the world is in the search of new energy sources and the scientists even exploring the moon for new energy sources (Helium-3). The recent 1-2-3 agreement reached between India and U.S. is an example for India’s strive for energy sources. The conventional non renewable energy sources like coal is exhausting and new sources of coal are yet to find out. Since our company is associated with electricity generation from coal, it is time for us to think about the continued use of coal to produce electricity. The concerns raised by scientists about the environmental pollution produced from coal have to be studied since such pollution will affect even the existence of civilization on earth. We have to consider few things. How far the coal is polluting air compare to other sources electricity? Whether the electricity production from coal is cost effective compare to other sources of electricity? For how long we can sustain with the coal stock on earth? What are the other sources once the coal is being exhausted? Business and Government 10 Coal is considered as the source of carbon dioxide which is contributing to the atmospheric pollution. When coal burns the carbon combined with atmospheric oxygen produces carbon dioxide. The excess percentage of carbon dioxide in the atmosphere will increase the temperature of atmosphere and hence will contribute to the global warming. This will lead to the climate changes and the existence of civilization also will be questioned. We have heard about climate changes in lot of regions of the world. The summer seasons of some countries are now changed to rainy seasons and vice versa. This is affecting the cultivations of that region. “Coal and oil contain small amounts of sulfur, typically 0.5% to 3% by weight. In the combustion process, sulfur combines with oxygen in the air to produce sulfur dioxide, which is the most important contributor to acid rain”. Air consists of a mixture of oxygen (20%) and nitrogen (79%), and at very high temperatures molecules of these can combine to produce nitrogen oxides, the other important cause of acid rain (Environmental problems with Coal, Oil and Gas) Sulfur dioxide and nitrogen oxide are harmful to human health. It causes diseases coughs and colds, asthma, bronchitis, and emphysema bronchitis and pneumonia. Sulfur dioxide and nitrogen oxide undergo chemical reactions which will produce sulfuric acids and nitric acids which may eventually combine with water vapor in the atmosphere and produces acid rain. Acidity of the soil is very important for the cultivation. The equilibrium will be destroyed due to the acid rains. Carbon dioxide also contributes to the formation of carbonic acid which will make one of the components of natural Business and Government 11 rain. There are political aspects also to the acid rains since acids rains can be occurred in even in under developed countries who are not contributing to the air pollution much. The sulfur dioxide or nitrogen oxide responsible for acid rain may be originated far away, sometimes in other countries. Coal collection from the earth requires a lot of soil or earth removal which will again destroy the equilibrium of the environment. Mining of coal will destroy the health of the miner. Cleaning of coal after mining will produce lot of waste materials. Another environmental impacts of underground mining that the ground on the surface moving downward, causing buildings on the surface to crack or even to be completely destroyed. Fires started by accidents in coal mines are very difficult to put out. Coal is a versatile fuel. It can be used as a solid fuel or can be converted to gas. Oil and natural gas also can be used for making electricity. But when we consider the cost of mining, transportation, electricity generation and pollution control costs associated with these fuels along with coal are increasing. So we have to search for other sources which will be cost effective and environment friendly. In my opinion hydro electric projects are the best answer to these questions. Since our country does have lot of rivers and have enough rainy seasons the water can be conserved in dams and the potential energy of the water in dams can be made use of making electricity. This idea will be cost effective as well as it may not cause any type of environmental pollutions. Nuclear power is another option. But compared to hydro electric projects this will not be that much cost effective and environment friendly. Business and Government 12 Our country has enough stock of coal in order to meet our power requirement for another 300 more years. We cannot avoid any energy source since each country is facing energy deficit. . So we have to utilize that coal stock along with improved technology to reduce environmental pollutions. In order to reduce environment pollution we have to implement new technologies. For this purpose the R & D department should be restructured to incorporate new technologies. At the same time we have to search for new energy sources also. We have our own technologies which are already developed for the mining of coal and the conversion of coal energy into electrical energy. So if we stop our activities in the coal sector the technology will be wasted along with the equipments. On the other hand we have to develop the technology for other segments which will be a costly affair. Competition also will be more in the other sectors since there already established organizations in other sectors. Taking into the account of all the points discussed above, I feel we have to diversify our projects concentrating more on other areas of power production especially the hydro electric project. The water after the production of electric power can be utilized for cultivation. So we achieve two goals from hydro electric projects. Once we have identified feasible hydro electric project we can start reducing our activities in the coal segment gradually. It is not necessary to stop our activities related to coal all of a sudden. At the same time we have to improve our safety measures to prevent environment pollution till we diversified completely to other areas.  Total word count - 1018 Business and Government 13 Sources 1. Ralph Stuart (other articles) - Environmental economics and Environmental policy February 19, 2007 Retrieved on 6/11/2008 http://www.eoearth.org/article/Command_and_control_regulation) 2. Star Parker Scripps Howard News Service-We need less government involvement in health care, not more- Deseret News (Salt Lake City),  Feb 9, 2008) Retrieved on 6/11/2008 http://findarticles.com/p/articles/mi_qn4188/is_/ai_n21305614 3. Economic regulation of Transmission using incentive based regulation)Retrieved on 6/11/2008 http://209.85.175.104/search?q=cache:5DzkbZv53PwJ:www.nersa.org.za/documents/thirdconsultation.pdf+incentive+based+regulatory+regimes&hl=en&ct=clnk&cd=6 4. Dana Brown, Making global self-regulation effective in developing countries) Retrieved on 6/11/2008 http://www.sbs.ox.ac.uk/news/archives/Skoll/Making+global+self+regulation+effective+in+developing+countries.htm) 5. Virginia Haufler - Beyond Government: Business Self-Regulation in International Affairs) Retrieved on 6/11/2008 http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=583 6. Environmental problems with Coal, Oil and Gas -Retrieved on 6/11/2008 http://www.phyast.pitt.edu/~blc/book/chapter3.html) 7. Eleanor Hall- Economist discusses Governments involvement in health funds profits Retrieved on 6/11/2008 http://www.abc.net.au/worldtoday/stories/s267492.htm Read More