Question

1) Under what circumstances do you think the government will impose greater regulation on financial markets and businesses? When does the government tend to favor deregulation and take a more laissez-faire attitude toward business

2) Can a firm stay in business if it does not consider the impact of its decisions on all stakeholders, including the environment?

Answer 1

1. There are some factors when the government would impose greater regulation on financial markets and businesses  

a. Economic and financial market conditions

b. Competitive Market

c. Operating efficiency

d. Labor conditions

Increased regulation indicates a increase the workload for people in financial services. Too much regulation could drive up costs, while too little regulation can lead to mismanagement, corruption, and collapse in the financial services sector.

Government is friendly to business when there is favorable economic conditions, while tougher regulations are imposed by the government when there is an economic disaster occurs.

The government would impose regulation on financial market if it believes deregulation contributed to the economic woes of the country. The tougher regulations were abundant when the country faces economic crisis or when the country suffer losses.

2. No, firm cannot stay in business if it does not consider the impact of its decisions on all stakeholders.

A firm can survive if it treats fairly with all the stakeholders. A firm can achieve the value of maximization through sustainability which indicates the concept of improving the quality of life for stakeholders.

A firm that makes decisions can affect the customers, environment and the government.