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Some elements of business activity such as Advertising standards Authority offers a voluntary code of ethics for regulating advertising behaviors in some countries are self regulating. It is…
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Regulation can adhere to different forms such as self regulation by an organization via social regulation or trade association or legal restriction instituted by the government authority.
Regulation in the business sector is very important in that it is mandated by the government in an attempt to yield outcomes which might not be realized, prevent or produce outcomes in distinct places to what might not have taken place or prevent or produce outcomes in distinct timescales than would have occurred. In this manner, regulation can be perceived as implementation of policy statements that aim to bring sanity in business by ensuring that there is neutral for all players to benefit (Scherer, 1996). The State has always regulated companies because it is aware that the safety of the public and their welfare is its priority. If the activities and behaviors of companies or industries are not regulated and reviewed, they can have harmful effects to human health, community structure and financial well being of people. It is plausible to argue that these regulations are put in place with the intention of protecting those people who have set their businesses correctly on the market via acquiring working licenses, inspections and permits that allows them to operate, therefore, the State tries to weed out criminal or undesirable activities that undercut honest industries.
The State has always engaged in regulating businesses by stating that efficient and effective business regulation is necessary since it propagates situation where the total benefits of some people do not exceed the total costs of others. Government regulations are important since they aim to achieve various objectives. If businesses are not regulated, then there will high standards of malpractices whereby the consumer will be exploited and deprived of his rights. Because of market failures, it is necessary for the government to control and regulate the behavior of firms since ...
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