Publics are groups that influence or put pressure on business organizations and influence their decision making. Government is one of the most crucial publics for an organization because regulates the business environment where an organization operates. Here are some of the reasons why government is an important public for all business organizations:
- Regulation and compliance:
Governments issue licenses and permits to allow businesses to operate. They also set laws and regulations that guide business operations in terms of labor standards, environmental protection, corporate governance, and consumer rights. No legal business can survive without following these laws and regulations.
- Economic policies:
Governments influence business decisions through implementation of economic policies such as monetary and fiscal policies. These policies affect business operations and profitability in the long term.
- Public Infrastructure
A business can benefit from development projects implemented by government. Public infrastructure projects such as roads, ports, and bridges can help a business to do its business operations such as distributions effectively. Public services such as education, security and healthcare are also offered through government expenditure to promote a good business environment.
- Market access and trade
Government can influence business decisions in terms of growth by developing trade policies that increase market access and trade. For instance, a government can set trade policies such as tariffs or trade agreements that either hinder or support international trade. Favorable trade policies enable businesses to expand and sell their products to international markets.
- Taxation
Government is also an important public to all businesses because it develops tax policies that influence business profits. Corporate tax and sales tax have a direct impact on costs and profits. Some governments offer tax incentives to encourage investment. Thus, business organizations can increase their investments in countries where such incentives are offered.
- Employment and labor
A country’s labor laws affect business operations in many ways. Governments develop labor laws to regulate employment practices in terms of minimum wage, workplace safety, etc. Business decisions regarding employment and human resource management are influenced by government’s labor laws and employment programs.
