Economic Boundaries And Its Effect On Business

1974 Words8 Pages
Every business’s goal is to maximise profit, generate more revenue and increase customer satisfaction. Although to achieve these goals could be changing, barriers from the economic conditions, government and competition has increased the difficulties. Governments and businesses are interdependent, the interdependence will grow further by globalisation of the economy when it comes to international business. Mamman (2004) states: “One of the manifestations of globalisation is the blurring of political and economic boundaries and the diminishing traditional role of national governments.” The role of government has always been an important factor in business, they create rules and frameworks that let businesses compete against each other. Business is affected by the government policy, the rules and frameworks can force them to change the way how they operate. The policies of the government can have implications. For example the requirements of licensing, other permissions, regulations, taxation and formalities. All these restrictions have a direct impact on doing business. The burden falls on business enterprises and if the cost of compliance becomes very high, business will make less profit. Government intervention falls in two areas: political and economic. Political interference is concerned with protecting the interests of certain groups (producers), often at the expense of other groups (consumers), or with achieving some political objective that lies outside the economic
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