Effective Business Association - Essay Example

Effective Business Association Introduction Business association is official organization functioning as an intermediary between its participants and external organizations such as country agencies, customer organizations and trade unions (Wilson, 2003). The characteristic of a given association depends on its nature and duties involved at the association. Different nations have different cultures at their associations. Today, there are many associations being formed to satisfy the needs of their members. Basing on the needs of its participants business association effectiveness depends on its ability to attend to the needs of the participants e.g. Australia bankers association and steel & iron industry association. Each of these associations tends to have different objectives to their members thus structuring their unique culture. The strength of an association is determined by its effectiveness to attend to its members needs independently (Coleman, 1988: 47-65). In the begining, association were believed to be formed formally by employers to counteract organized labour among its employees at the work station. This was aimed at protecting the objectives of the business as well as that of the management. In Australia, business association has been as result of economic, political and social changes within organizations. The change has led to many businesses to come up with ways in which they can co-ordinate with each other to enhance their productivity in the market. These have been achieved through forming associations that counter the nation’s activities other than weakening the unions at their business centres. In today’s global era, business association provide organisations with technique to counteract labour and of practicing on, and contributing in public policy (Wilson 2003). The association also offers schemes of self-regulation services to its members. Basing on this fact, the paper will discuss conditions that influence the formation of business association as well as the condition that impede the formation of business association. These conditions are believed to revolve around variants of capitalism model. The model is split into two sections in which some of the variants are responsible for effective formation of association where as the other variants hinders the formation of effective business association. Other than the effectiveness of capitalism model in the nation, there has also been the existence of other element that gives rise to comfortable or uncomfortable conditions for the formation of associations in nations. These include the availability of tariffs, lobbying among other. These will be discussed in relation to business associations in Australia. Conditions Facilitating the Formation of Business Associations These are the circumstances presence in the nation or in business environment that makes it possible for the formation of business association. As discussed earlier, business association is the official organization functioning as an intermediary between its participants and external organizations such as country agencies, thus, the participants have to poses common objectives that will guide them within the association. The following are conditions that are likely to facilitate the formation of business association between organisations. Arbitration & Protectionism There should be chance for the members to negotiate on terms and condition that will govern them at the association before any association is formed. This will give the participant a clue on what every member is entitled at and their final objective at the end of the period. At the same time, there should be the aspect of protection that shields the members from other nation rules that are against their objectives (Bell, 1994: 137-158). With these conditions in place, it is hopped that the association formed will be more effective to the society as well as to the participants of the association. Arbitration in nation gives employers good opportunity to form association in that they are able to come up with constant guidelines that will govern them in the formed association. Neo-liberalism The association should be able to be independent while dealing with the needs of its members. This will reduce the rate at which they participate actively in the nation labour market. The availability of rules and regulation at association tend to give the group more independence from the nations (Bell, 2006: 543-70). This condition tend o give the business much freedom to decide on working conditions in the market as well as they taxation rate to be imposed to their goods. Deregulation Basing on deregulation, the association has to be able to develop and administer its own programs allowing the state to offer legislative backing to enable the arrangement to be enforced. This is hoped to underpin the organisation codes of conduct. In other words, the organisation has to be able to run their activities separately without any assistance from the government thus giving it the chance to be a private sector organisation (Wilson, 2003). This condition gives the business the opportunity to alter some of the government policy without permission to suit their agenda in the market. This provides the business with an opportunity to be independent in solving some of associations’ members’ problem that arises without any help form the government (Coleman, 1988 47-65). With varied regulations in the market, it gives organisations chance to compete amongst themselves in the market. For more effective association, the member organisation has to be from the same category enabling them to compete effectively in the market. This is viewed to increase the well being of the association as each member will strive to attain competitive advantage in the market. Government-Business Relations This is the relationship that exists between the nation and business in action. For effective formation of association, the organisations have to check on key issues such as their environment, industrial relations that exist among them, the regulations that control their products as well as financial market and the taxation policies among the members of the association. In regard to taxation policies, there should be slight different or no different in the rate at which the member pay tax to the nation. This will facilitate the general tax policy to be implemented at the association (Wilson 2003). At the same time, the members are supposed to have average regulation basing on their products in the market. This is also concerned with tariff policies in the nation. It has to be able to protect the employers in such a manner that they are able to control the procedures at the association without going against the nation laws. Tariffs & Industrial Relations In Australia, protectionism has been the most significant element in association formation. It provided comfortable policies for associations thus facilitating association formation in the nation. According to Matthews, he believes that the existence of labour movement in the nation’s centralised industrial relation arena offered very rationale conditions for creation of many employer associations in the nations (Matthews, 1983: 115-49). The availability of tariffs has acted as supporting benefits for associations in the nation thus increasing their creation. Unity & Collectiveness For any formation of association, there should be existence of unity amongst the participants which will enable them to come up with better strategies to govern their organisation. For example, in Australia, more than 40employers have come together to form association depending on their business objectives. For instance, the banks in the country have come together to for Australian bankers association which governs them on how to conduct their various activities at their work station (Wilson, 2003). Using the same spirits, other industrial firms have united to form Iron & Steel Industry Association that directs then on ways to import and export their goods in and out of the nation. Unity is very essential condition needed for any association formation to take place. Having the idea that association is official organisation functioning between groups of organisation; it then calls for unity among its members to give it support to represent them in the nation. Unity is believed to be agreement between two or more organisations (Matthews, 1983: 115-49). At the same time, there has to be the spirit of collectiveness amongst the organisations to form the association. The businesses have to know each other as well as know what every business is after before engaging themselves in such businesses. Multiparty Presence of many parties within a state leads to proportional representation systems giving confidence to corporation’s organisations, thus making it easy for the formation of business association. Whenever there is multiparty politics in a nation, the state tend to relax their rules on business as well as their general rules on taxation policies in the nation. This gives business better opportunity to come up with business association as there will be minimal government policies governing them (Matthews, 1983: 115-49). Globalisation This is the change in technology as well as way of doing things among organisations. For effective formation of association among organisation, the members should have same rate of technology change (Wilson, 2003). This will increase their ability of understanding as well as growth within the association. Different rate of globalisation in organisation may result to injustice ness in time of decision making. At the same time, globalisation brings about change sin government policies and thus enabling the business association to impose their changes that they feel has to be included in the new strategy (Wilson, 2003). Collective Nature This is the ability for businesses to relate thus being able to be generalised to form one association. The business has to be dealing wit same activities or product in the market. For example, the banks in Australian have the same nature thus being able to come up with Australia Bankers Association. Neo-capitalism This refers to continental European combination of generous private ventures, widespread social-welfare programs and careful government involvement whereby, structured labour function in affiliation with government and private industry to bargain and execute universal wage levels and management spending across the financial system in return for evading strikes and labour turbulence. This has been the main function of association in nations and thus, the availability of neo-capitalism in place will result into effective formation of association (Wilson, 2003). Laissez-Faire This is the ability for an organisation to be free from government restrictions in term of monopolies and tariffs. This gives the organisation an upper hand to be independent in decision making thus providing better condition for the formation of association (Cerny, 1997: 215-74). Conditions Hindering the Formation of Business Association These are the circumstances or situation in business environment that impede the formation of business association among businessmen. Generally, the present of government control over business tend to hinder business association formation. This with many others will be discussed in the context below (Bell 1995 543-61). Disunity & Fragmentation This is division among organisations. For effective business association, the organisation has to unite in all their activities and functions. Whenever there arise the disunity, it tend to break the bond between the organisation and thus hard to form business association. When business interests are compared to other aspects such as workers, they tend to have minimal need for collectivist associations. These arguments bring about the presence of diversity and fragmentation in business environment that tend to discourage the formation of associations in the country (Wilson, 2003). The relative fragmentation and disunity of business which is generally evident in the Anglo-Saxon nations should be contrasted with the often considerably higher levels of business cohesion and company found in a number of European nations. According to Matthew, he argues that, to elaborate on the national dissimilarities in business mobilisation, it is important to evaluate the institutional context in which the business functions (Bell 1995 543-61). To this point of view, it is then clear that factors such as configuration of the state together with the structure of the nation economy plays significant role in business association formation. In Australia, fragmented state structure together with divisions in economy between exporting and protects domestic sectors have historically fragmented and separated Australia business association. The divisions have also been created by the presence of major frameworks of public policy, specifically protectionism and Australian tradition pattern of centralised industrial relations (Gamble 2000 115-215). By tradition manufacturing interest gained substantial benefits from protectionism but much of the cost created by other economic sectors such as mining and farming in the country. This contributed to disunity among sectors arising to conflicts which discouraged the formation of business association in the country. The presence of protectionism led to division of key economic sectors in the nation together with their presence association. Small industrial associations were connected to larger associations with complex patterns of relationship in the industrial and tariff with reasonable alternations in arrangement between the nations. This is though to be the result of confusing in Australian’s industry and nation based employers association (Bell, 1995 543-61). The availability of limited leadership capacities in business associations have led to reduction of association in the nations (Wilson 2003). Associations have been awarded with minimal disciplinary powers to its members and thus giving the members much power to rule the associations other than adhering to the rules at the association. In regard to this, many employers associations have been poorly placed to negotiate on a national basis. Monopolism This is ability for a business to own its own shares and product solely in the market. This tends to hinder the creation of business association in that, the sole business will not feel free to combine its efforts with other business in the market. With the nature of sole proprietor in the market, it is difficult to adjust to partnership type of business with other business people. Structuralist This is ability for an organisation to mostly rely to the government for support in term of finances, and regulation. The business can not come up with their own regulation that govern them but rather depend on the nation instruction. This is contrary to the qualities of an effective business association in that, the association should be able to manage the needs of its members without helps from the government. Crony Capitalism In business, this condition creates close relationship between the government official and the business people thus giving them better opportunity to acquire any help from the government whenever they need (Wilson, 2003). In regard to the close connection with the government, it tends to hinder their efforts in forming business association as the government calls for law regulation that binds their business. Thus the presence of crony capitalism in business environment impedes the formation of business association. State Capitalism This is the condition is which the state controls all the business affairs inclusive of their production in the market. This gives the business people hard time to attend to their clients needs minus consulting the government, thus hindering the formation of business associations among the business. With this, type of condition, the nations tend to control all the tax policies in the nation, the product produced in the country together with the profit made by the business people. These results to more public sectors business in the country compared to the rate of private sectors thus hindering the formation of business association (Bell, 1995: 543-61). Competition State This is the condition whereby the businesses in the environment are always on competition with each other to attain competitive advantage. This type of state tend to reduce the possibility of business association formation as the business will desire to have distinct products, services and features form their colleagues so that they may attain competitive advantage in the market (Cerny, 1997: 215-74) Pluralism This is the availability of two political parties in a nation. This stiffens government regulations among the business people in such a way that they can not deregulate to fit heir needs., as result of this, the condition is known to reduce the possibility for business association in the nation (Coleman, 1988 47-65) Industry Policy This is the active government duties in economic development of a given nation. It deals with investigation of policies that have influence on business industry such as tariffs and trade, research together with development and regional development innovation. This tends to bring about international competitiveness in the environment thus minimising the possibility for business association in the environment (Sheldon & Thornthwaite, 1999). This is to the fact that, many of the business will tend to focus on their international welfare and ways in which they can implement to attain competitive advantage in the market other than focusing on formation of business association. Internal Differences in Industrial Relations Within industrial relations, organisation has to poses same objective to facilitate the achievement of their goals. In presence of differences, it hinders the formation of association in such away that the organisation cannot have same goals at given period of time (Sheldon & Thornthwaite, 1999). Conclusion In conclusion we can say that, the political nature of state plays a major role in formation of associations in the country. This has been evident when we found out that, availability of two political parties in nation hinders the formation of association where as multiparty encourages the process. Thus, for high association formation rate in any nation, the government has to check on their political nature as well as culture. In connection to this, the structure of economy in a nation dictates the rate of business formation in the country. Many fragmentations in economic structure tend to impede the formation of business formation (Sheldon & Thornthwaite, 1999). At the same time, it has been clear that, the business environment in a country dictates whether there will be more associations or not. This is to the fact that, stiff competition in business environment, discourages business association formation as businesses will opt for there own independence to enable them attain competitive advantage in the market other than connecting with other business. This is in contrary to when the business environment is made of average competition, thus giving business people much time to relate with other business in the nation for the formation of association (Cerny, 1997: 215-74). Finally, the relationships between businesses have contribution to association formation. Good relationship among business encourages association formation whereas un-cooperation between businesses discourages business association formation. None the less, close relationship between business governments tend to reduce the rate of business association formation where as independent business facilitates business association formation in a state (Cerny, 1997: 215-74). References: Bell, S. The Role of Business Association in Public Policy Vol 28 No 1 1995 pp 25-53, 543- 61 Bell, S. Victim of its Own Success: Neo-liberalism, Internationalization & Organisational Involution Politics & Society Vol.34 No 4 2006 pp 543-70 Bell, S.Australia Business Association Australia Journal of Management Vol 19 No 2 1994 pp 137-158 Braithwaite, J. & Drahos, P. Global Business Regulation Melbourne Cambridge University Press 2000 Cerny, G. Paradoxes of the Competition State Government & Opposition Vol 32 No 2 1997 pp 251-274 Coleman, D. Business & Politics Study of Collective Action McGill-Queen’s University Press Kingston 1988 pp 47-65 Gamble, A. Economic Governance Oxford University Press 2000 pp 115-215 Matthews, T. Employers’ Association Corporatism Oxford University Press 1994 Matthews, V. Business Association & the State Oxford University Press, Melbourne 1983 pp 115-49 Plowman, H. Countervailing Power Organisational Parallelism & Australian Employer Association vol. 14 No 1 1989 pp 97-113 Sheldon, P. & Thornthwaite, L. Employer Association & Industrial Relations Change Alllen & Unwin 1999 Wilson, K. Business & Politics Comparative Introduction 3rd Ed Chatham House New York 2003 pp 15-21, 136-56 Read More