Introduction to Business Administration Slide 11

Introduction to Business Administration

Session 11 –Role of government in business

1. History and development of Ghana government’s involvement with business
Shift from Socialist to Free market Economy.
The dynamics of world affairs and of the economic growth of Ghana.
The emergence of multinational companies and large enterprises.
The political conviction that government should be a representative of the people

2. Why Government regulates

This emanates from the conviction that there must be rules for business, otherwise, disorder and unfairness would prevail.

3. How Government regulates the Business Sector

• The promotion of business competition by permitting entry into any of a wide range of business pursuits. e.g. Protection Against Unfair Competition Act 2000 (Act 589).
• Regulating and Deregulating Industries.
• OECD 1995 defines regulation as legal instruments by which governing institutions at all levels of government impose obligations or constraints on private sector behaviour.
• Protecting stakeholders
• (i) Bank of Ghana Act provides for its role as regulator of the banking industry.
• (ii) Public Utilities Regulation Commission 1999 LI 1651

Some government regulating agencies

Government Agency                        Major areas of responsibility

•Environmental Protection Agency    Develops and sets standards to protect the environment.
•Federal Highway Authority        Regulates vehicle safety requirements.
•Food and Drug Board            Enforces laws and regulations to prevent distribution of harmful foods, drugs, medical devices and cosmetics

• The provision of adequate public facilities to business in order to insure healthy and expanding business activity.
• Contributing to economic stability.

Should government actively operate a business enterprise?

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