Canadian Business and Society:
Ethics & Responsibilities
Chapter
Ten
Regulating Business
Copyright © 2008 McGraw-Hill
Ryerson Ltd.
1
Chapter Outline
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Regulation: Market, Self, Government
Business Involvement in Politics and
Lobbying
Corporate Public Affairs Departments
Corporate Agenda
Impact of Decreasing Government
Involvement
Ethical Implications in Business–
Government Relationship
Ethics in Government
Chapter 10
Copyright © 2008 McGraw-Hill
Ryerson Ltd.
2
Spectrum of Regulation
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Laissez-faire regulation
Corporate self-discipline
Industry self-regulation
Self-regulation involving
stakeholders
Negotiated self-regulation
Mandated self-regulation
Quasi-government regulation
Government regulation
Chapter 10
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Market Regulation
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No need for government-imposed laws or
regulations
Corporation influenced by market forces
Laissez-faire approach
Government does not interfere with
business
Consumers can force companies to
behave in particular ways by refusing to
purchase goods or services or through
boycotts
Chapter 10
Copyright © 2008 McGraw-Hill
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Self-Regulation
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Corporate self-discipline regulation
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Industry self-regulation
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mission, values statement, codes of conduct
or ethics
voluntary codes
Self-regulation involving stakeholders
Negotiated self-regulation
Mandatory self-regulation
Chapter 10
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Scope of Government
Regulation
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Government:
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is architect of economic growth
prescribes rules businesses must follow
is major purchaser of goods and services
produced by businesses
is major promoter and subsidizer of
businesses
is a supplier of debt capital to many
businesses
is a rescuer of failed businesses
is the protector of business and producer
interests
Chapter 10
Copyright © 2008 McGraw-Hill
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Business Involvement in
Politics: Examples
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Financing of political parties
Publicly expressed support for a
candidate or party
Publicly expressed views on political
issues
Executives running for public office
Management’s position on
employee participation
Chapter 10
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Business Lobbying
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Business lobbying attempts to influence:
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Making or amending of legislation and
regulations
Making or changing of government policies or
programs
Government decisions in the awarding of
grants, contracts, contributions, or any similar
benefits
Government appointments to boards,
commissions, and any other public office
Source: Carson, 1998
Chapter 10
Copyright © 2008 McGraw-Hill
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Business Lobbying:
Criticisms
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Practices unethical (e.g., bribes,
gifts, improper political
contributions, blackmail)
Business lobby too powerful
Business has unequal access to
government
Cost of business lobbying passed
on to consumers
Chapter 10
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9
Corporate Public Affairs
Departments
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The management function responsible
for monitoring and interpreting the
governmental environment of the
corporation or industry and for managing
the responses necessary to protect the
interests of the corporation or industry.
Role expanded to include community
relations, media relations, environmental
monitoring, issues management,
lobbying, and public relations.
Chapter 10
Copyright © 2008 McGraw-Hill
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10
Corporate Agenda
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The real or imagined alleged domination
of public policy or government programs
by corporations or business
organizations in their own best interests.
The corporate agenda might include:
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Reduction of government involvement
Deregulation of business and industry
Reduced corporate taxation
Enactment of free trade agreements and
support for globalization
Chapter 10
Copyright © 2008 McGraw-Hill
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11
Impact of Decreasing
Government Involvement:
Possibilities
 Privatization of the financing of services
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that continue to be produced by the
public sector
Contracting out of the provision of
services to the private sector
Transfer of state functions to private
sector
Sale of government-owned enterprises
Liberalization of public policy
Chapter 10
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12
Ethical Implications in
Business–Government
Relationship
 Appropriateness of government
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involvement and interference in business
operations
Matter of accessibility to government
Favouritism to some corporations
regarding loans, grants, or protection
Endorsement of political candidates or
parties can be perceived as expecting
favours in future
Lack of transparency in relationship
between government and business
Chapter 10
Copyright © 2008 McGraw-Hill
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13
Ethics in Government
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Office of Values and Ethics,
Treasury Board of Canada
“Principles of the Public Service of
Canada”
Public Service and Integrity Office
Office of the Ethics Commissioner
Federal Accountability Act
Chapter 10
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