Explaining Compliance: Business Responses To Regulation Essay

Length: 5 pages Sources: 10 Subject: Business Type: Essay Paper: #77026664 Related Topics: Deregulation, Australia, Consumer Protection, Harvard Business
Excerpt from Essay :

Big Businesses in Australia Use Highly Paid Lobbyists or Circumvent Regulations

In its relations with government, big business in Australia usually gets its own way either through the influence of highly paid lobbyists or through the capacity to circumvent regulations.

In the recent few years, the Australia government has promoted an economic liberalization task through a deregulation and privatization process. Deregulation of the media sector is now on the agenda. In 2006 Senator Coonan, Minister for Communication, Information Technology and the Arts launched a government structure for modern deregulation of the media sector (Arup, 2006). Included within the deregulation structure is a suggestion to relax the present media ownership regulation. This document will temporarily summarize the present Big business ownership in Australia and talk about the reasons for such control. This will be followed by a research of the different justifications for and against deregulation.

Arguments for deregulation consist of financial justifications such as "free market theory" and maximization of profit. Arguments against deregulation are social based justifications such as the prospective of unnecessary power and Big business owners' influence and decrease in diversity of information and views. From this research, it will then be suggested that the Big business ownership rules must not be relaxed. This discussion will be made on the foundation that there is no proof that deregulation will not be damaging to society and change will be challenging.

Big business ownership in Australia has been an important policy issue for many government authorities around the world. This has been attributed to the special role that big business plays politically, culturally and socially. The present rules with regards to cross-business ownership in Australia as set out in the Business Act 1992 states that an organization or an organization's director can only control a certificate for one form of big business (television, newspaper or radio) in any given license domain (Australia & CCH Australia Limited, 2011). An example of this may be if an organization has a television license in a certain domain, they would not be eligible to acquire a newspaper or radio license within that same license domain. These rules were recognized in an effort to prevent support competition and concentration in the media sector. This effort sought to sure that democracy could function effectively and that the larger society can have access to a range of appropriate, provided opinions and information

It has been widely approved that there must be different and free exchange of opinions, ideas and information for a democracy to function. Many nations around the world have shared the perspective that rules applied to control the concentration and ownership of the big business fosters the diverse circulation of ideas and information. This perspective is modifying. From the policies of economic liberalization, technical developments, commercialization and pressure from expanding big business, government authorities have started to deregulate the market. Nevertheless, it appears there is little research that discovers the social effect of concentration in the big business market (Parker & Nielsen, 2011) Will society benefit from greater concentration of the big business industry?

With lots of big business resources available to the society, particularly the world wide web, there will continue to be a different variety of goods from which the society can choose. However, numbers show that, in Australia, newspaper, television and radio remain the most common resource of information and current affairs; only 11% of people use the internet and 10% use cable television as their resource of information and current matters. Moreover, conventional big business owners own many online and cable television services. Furthermore, this is a simple relaxation of the business laws and regulations and that safety measures to ensure diversity will be developed, these safety measures being at the least five voices in urban markets and metropolitan markets. Despite these safety measures, relaxation of the present rules will provide an opportunity for merging and further concentration of an already concentrated market. The two biggest big...


Former Australian Prime Minister Paul Keating (OECD, 2011) indicates that the safety measures are insufficient, as relatively small and unimportant voices will be mentioned in the five required voices in an area. The question remains; Will further concentration of the big business market be damaging or beneficial to society?

Further merging will be valuable to the big business owners and society as companies will have the capacity to realize economies of scale and scope. However, cross- big business possession across conventional big business platforms does not cause important effectiveness and cost savings benefits. In regards to the public interest, it has been suggested that the industry forces of demand and supply is the best way to control the big business. This means that those that provide public interest will be successful while those that will fail have to change or will fail. According to Djankov (2004), controlled marketplaces may be less different from a not controlled industry. In the name of earnings, a single owner with various big businesses will entice a greater audience by generating many items than by generating homogeneous items in each business. This discussion is naturally appealing. However, business income is the greatest issue for a professional big business owner. In this sense, owners will only offer what people want when it is a valuable industry. Furthermore, there are issues that to entice audiences' owners will motivate entertainment and sensationalism, making information a saleable product rather than a public service (Parker & Nielsen, 2011).

A further problem is the possible power, accompanying ownership control over big business. Big business now has the potential to break or make political figures, even whole governments. No more does big business simply bring the information, they also have the power to influence political action and shape policy. Given the additional control and power that the big business owners will have, one must be sure not to get on the wrong part of them. Entrepreneurs will be unlikely to claim control over the content that is created unless they are willing to trade earnings for their goals. This raises the question on what may occur if influencing the big business is economically valuable to the company. It has been discovered that there is a common approval that the commercial interest of the proprietor will affect production and business. After deregulation, the huge big business owners will use significant influence in state policies and policymaking. They will also be able to constrain an effective community debate. From this power, once deregulation has occurred by reversing the situation will be much more challenging. Rainnie and Grobbelaar (2005, pp 1-18) in his research also discovered that entrepreneurs of big business can and have used a certain level of content control. He also discovered that these methods could be very challenging to prove or monitor. Furthermore, it has been discovered that employees are able to identify and work to the employer's choices without having to be clearly told what to do

Big business ownership in Australia will continue to be a controversial issue; despite the level of discussion around big business ownership, governments around the world are seeking agendas of deregulating the media industry. There are economic justifications that have been put forward such as the laws of demand and supply, economies of scale and scope along with International Finance Corporation's (2013, pp 161-164) discussion of diversity due to profit goals and audience maximization. However, the justifications are beneficial to the industry but cannot show the benefits to society and the public interest. This shows that there will be a loss of the quality of the goods offered under the laws of demand and supply. It will be focused towards the most profitable market segments. They fail to address the reasons behind the big business owners' misuse of increased power provided to them through further integration both in influence of content and in political influence.

Lastly, Scott (2008) is suggesting safeguards that do allow for further industry concentration and are poor, as it will allow a big business owner to control the key business platforms in an industry given there are other owners still in the marketplace. As there is, no extensive proof to confirm that relaxation of rules governing the big business ownership will not be damaging to society the rules should stay as they are. As Parker & Nielsen (2011) put it, "ownership is easily regulated and monitored whereas ideas such as the difference of views' are much more challenging to regulate." Can the democratic society manage for deregulation advocates to be wrong? Once the industry is deregulated, it will be very challenging to recover (Parker & Nielsen, 2011).

It is evident that large companies in Australia misuse their privileges by holding the government hostage by using high-powered lobbyists. Through this, such companies band the laws to their favor and are not punished or cannot face the law because they have arm-twisted the government officials. To some extent, this has not been a…

Sources Used in Documents:


Arup, C. (2006). Labour law and labour market regulation: Essays on the construction, constitution and regulation of labour markets and work relationships. Annandale, NSW: Federation Press.

Ahmad, A.U.F. (2010). Theory and practice of modern Islamic finance: The case analysis from Australia. Boca Raton, Fla: BrownWalker Press.

Australia., & CCH Australia Limited. (2011). Australian corporations & securities legislation 2011. North Ryde, N.S.W: CCH Australia.

Djankov, S. (2004). Understanding regulation. Washington, DC [u.a..

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