Government and business relationship in india

Government-Business Relations - Wikiversity

government and business relationship in india

The term responsibility, accountability, obligation or duty is all used interchangeably in the context of relations between Government and business. Government-Business Relations in India. C The present policies and problems of government-business relations in. India are examined by Professor Varshney. Government and business institutions in a country in many ways are interrelated and interdependent on each other. Entrepreneurs are the driving forces of the.

For this, the government and organizations or businesses always try to influence and persuade each other in many ways for various matters. A balanced relationship between the government and businesses is required for the welfare of the economy and the nation. How Business Organizations Influences the Government Organizations try to force the government to act in ways that benefit the business activities.

Of Course, for that, an organization must go through in a legitimate way.

government and business relationship in india

But sometimes we see that organizations try to go over the line. Anyways, these are the common methods that business organizations us to influence government policies. Personal Conducts and Lobbying The corporate executives and political leaders and government officials are in the same social class. This creates a personal relationship between both parties.

Also, organizations formally from the group to present its issues to government bodies. Forming Trade Unions And Chamber Of Commerce Trade unions and chamber of commerce are associations of business organizations with a common interest.

government and business relationship in india

They work to find the common issues of organizations and present reports, holds dialogue to discuss them with government bodies. Political action committees PACs or are special organizations formed to solicit money and distribute to political candidates.

Most times the rich executives donate money to the political candidates whose political views are similar to them. Large Investment The companies if can make a very large investment in industries or projects, they could somehow affect the government policies.

Government and Business

We see these very often in developing countries where foreign corporate wants to invest in these countries. This is in contrast to government being the regulator to ensure businesses act in a socially responsible manner.

These views are not mutually exclusive. For example, the same solar business can use some of its interaction with government to try to maximize the benefits, such as favorable tax credits, it receives from government and at the same time work in partnership with government to achieve a social purpose, such as reducing carbon emissions, and then try to minimize its tax obligations. Sustainable businesses, such as the companies presented in the case study chapters in this textbook—such as Stonyfield Yogurt, Oakhurst Dairy, and Green Mountain Coffee—tend to focus on their responsibility to the environment and societal impact and also tend to recognize that government policies and programs are often necessary to help them achieve their objectives and therefore are inclined to try to work with and even partner with government to achieve desired ends.

It is always important for sustainable businesses to understand how their efforts to achieve profits and to serve a social purpose are both strongly influenced by government policies, and it is always important for sustainable businesses to manage their relationships with government local, state, national, and international effectively.

government and business relationship in india

Types of Business Responses Once a business has an understanding of how government affects their operations and profitability, it can formulate strategies for how best to interact with government. There are three general types of business responses to the public policy environment—reactive, interactive, and proactive. Reactive responses involve responding to government policy after it happens.

Relationship between Government and Business Organizations

An interactive response involves engaging with government policymakers and actors including the media to try to influence public policy to serve the interests of the business. A proactive response approach entails acting to influence policies, anticipating changes in public policy, and trying to enhance competitive positioning by correctly anticipating changes in policy.

For most businesses, a combination of the interactive and proactive approaches is the best approach. In meeting challenges from nongovernmental organizations NGOs and the media, businesses may respond in a variety of ways, including the following: It may aggressively attack either the message or the messenger, and in extreme cases, business has felt justified to sue its critics for libel.

Business may adopt issues management programs to forecast emerging issues and to adjust or change business practices in advance of the passage of stringent laws or regulations.

government and business relationship in india

When business is in a reactive response mode, it most often engages in confrontation of its adversaries. When it assumes an interactive response mode, it participates in dialogues with NGOs and the media and develops partnerships or coalitions to advance new policies and programs. When business behaves in a proactive manner, it anticipates future pressures and policy changes and adjusts its own internal corporate policies and practices before it is forced to do so. While a reactive stance may sometimes work, it often only delays needing to engage in a more interactive or proactive way.

An interactive or proactive approach is usually a better way to meet political and societal challenges while also protecting the reputation of the firm. After discussions with RAN, Home Depot agreed to sell only lumber that was certified as grown from sustainable forests. This includes lobbying, political contributions, and interest group politics. Business Lobbying Businesses lobby in different ways. This can include lobbying of Congress and state legislatures and executive branch agencies directly through its own government relations specialists, through an industry trade association, through consultants, or through a combination of all those avenues.

For businesses, it can include owners and investors, employees, customers, suppliers, and all members of society affected by the organization.

Business lobbying has a strong influence on public policies. There are more than 1, private companies in the United States with public affairs offices in Washington, DC, and more than 75 percent of large firms employ private lobbyists to make their case for policies that can benefit them.

This includes more than 42, registered lobbyists in state capitals across the nation. Business may engage in reactive defensive lobbying defending its own freedom from government regulation or interactive lobbying partnering with interest groups on policies that the firm can benefit from.

government and business relationship in india

Businesses can also choose to engage in social lobbying, examples of which include chemical companies with the best environmental track record joining environmental NGOs in lobbying for an increased budget for the Environmental Protection Agency EPA and retailers wanting to address consumer concerns joining interest groups in pressuring the Consumer Product Safety Commission to adopt more stringent product safety standards.

Corporations showing a willingness to join such public interest coalitions can gain reputational rewards from NGOs, the media, and public policymakers. Energy Company Lobbying In While oil, gas, and utility companies spent most of that money, renewable energy lobbying efforts were also sizable. Political Contributions Businesses also use campaign contributions to support their position and to try to influence public policies that can help them increase profits.


Seven of the ten largest corporations in the world are oil companies, based on revenues. Their access to funds for lobbying and campaign contributions gives them a significant voice in the political system and on policies that can impact sustainable businesses.

There are a range of avenues a company might use in making political contributions. The most transparent and legitimate is that of forming a political action committee A private group organized to elect political candidates or promote a particular policy or political cause.

PAC to which voluntary contributions of employees are amassed and then given in legally limited amounts to selected candidates. Not surprisingly, larger firms in regulated industries, or in industries exposed to greater risk from changing public policies, such as oil companies in during and after the British Petroleum BP Gulf of Mexico oil crisis, use PACs more often than other firms.

Beyond contributing directly to political candidates, firms can also advertise on ballot measure campaigns, and those contributions can come from corporate assets and are subject to no legal limitations. Federal Election Commission ruled that the government could not ban independent political spending by corporations, as well as labor unions and other organizations, in candidate elections.

Interest Group Participation Business response can include participation in interest group politics. Interest groups play a key role in all democratic systems of government. However, as an interest group is a group of individuals organized to seek public policy influence, there is tremendous diversity within interest groups.