Question

Should companies self-regulate their actions? Or should a governing body impose rules? What issues can happen with self or government imposed regulations?

Answer 1

Should companies self-regulate their actions? Or should a governing body impose rules?

Companies view most of their actions in terms of the profits which they can earn for themselves. The sole reason for companies to exist is the fact that they want to achieve higher profits for themselves.

Rampant and unchecked corporate activity is extremely bad for the society and it’s been one of the key reasons for government intervention in the sector.

The government actively engages in setting rules and a framework for these companies to exist. Since most of them are only concerned about the profits which they make, the governments rightly correct these over a period of time to ensure that they fall in line with the practices that promote overall welfare.

A governing body is must for all industry types which must regulate the directions of the companies. In the past without having such bodies meant companies often flouted rules which resulted in degradation of the resources which the society had and individual problems for all.

A governing body usually monitors the firms and their actions and intervenes only when required. In this sense it is very important to have one so that no unfair practices are followed by the firms in their aim of earning higher profits and harmony can be maintained.

What issues can happen with self or government imposed regulations?

Though, companies are actively trying to implement self-imposed regulations, largely the fact that the government has been stringently adopting the same is the biggest reasons why these policies came into existence at the first place.

While Self Governance should always be encouraged as a means to keep a check, government imposition of regulations is equally important in managing erring companies within the industry.

While self-imposition would mean an auto check on the industry. It is hardly possible, seeing the complex nature of most industries.

On the other hand, government imposition of regulations helps promoting balance and unfair trade practices by the companies which acts as a hindrance not only for competitors at large but also for the consumers which get impacted by the same.

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