Government and Business | Business Studies Form 2

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Government and Business - Business Studies Form 2

INTRODUCTION

The government owns some businesses .This is one way in which it participates in business activities in the country.Government gets involved in business activities in various ways such as ownership, regulation, training and provision of enabling environment for example construction of roads.

Government is involved in banking through Kenya Commercial Bank(KCB).

Government and business

Government is involved in business in various ways.Government training institutes for example offer business courses that help train business people. The Kenya Institute of Business Training(KIBT) is a purely business training institute.

Government has training institutes in various parts of the country.

Objectives
B y the end of the topic, you should be able; (audio and text)
a) Explain  reasons for Government involvement in business
b) Explain how the Government gets involved in business
c) Discuss the merits and demerits of the government involvement in business activities
d) Discuss the importance of consumer protection

Objectives

By the end of the topic, you should be able to:
a) Explain  reasons for government involvement in business
b) Explain how the government gets involved in business
c) Discuss the merits and demerits of the government involvement in business activities
d) Discuss the importance of consumer protection


Background
 

The government owns some businesses and this is one way in which it participates in business activities in the country. See the picture of a business owned by the government.

Background

Government owns businesses just like any other individual or organization.The reasons for gvernment involvement in business are varied.These businesses can be found in virtually all sectors of the economy.Government is able to influence and control some business trends through its involvement.It is also able to offer essential services to its citizens.

Merits and Demerits

The following are merits and demerits of government involvement in business:

Merits

  • Protection of local industries from unfair competition
  • Enables it to understand challenges faced in business
  • Enables it to provide essential services that other businesses do not provide due to low profit or high running costs.
  • Profit realized is used in provision of services such as education and health services
  • Creates employment for citizens through the businesses
  • Equips businesspeople with business skills
  • Demerits

    • Some regulations discourage investors
    • Sometimes it drains public resources
    • Loss making businesses are a burden to taxpyers
    • Political appointments as commercial attaches or managers of government business leads to poor business.

    Introduction
    Government gets involved in business activities in various ways such as ownership, regulation, training and provision of enabling environment for example construction of roads.


    How the government gets involved in business


    Click button on the left for more..........

    Regulation

    The government sets rules and restrictions to govern business activities for example licensing, setting standards and formulating policies.

    Training

    The government trains business people in order to improve their skills of performance.It has set up training institute such as Kenya Institute of Business Training (KIBT),Kenya Industrial Training Institute (KITI),Kenya Institute of Management(KIM)and Government Training Institutes (GTIs

    Trade promotion

    Refers to government initiatives meant to increase the volume of sales of Kenyan products in both local and foreign markets .The ministry concerned with trade does this through the following departments;
    a) Trade development, licensing and extension services for local trade
    b) Kenya External Trade Authority (KETA)
    c) Trade policy and external relations which deals with regional trade blocks for example Common Market of Eastern and Southern Africa(COMESA), European Union (EU) and others


    Provision of public utilities (services)

    The government provides essential services to the members of public either free of charge or at minimal costs.for example education heath, transport and water

    Enabling environment.

    This refers to conditions which enable business people to freely engage in their business activities for example provision of security, infrastructure and credit facilities.


    Appointment of Commercial Attachees

    The government appoints commercial attachees in all their embassies where their business interests are taken care of.This includes both import and export businesses.

    Consumer protection

    Meaning of consumer protection

    Consumer protection is a deliberate effort undertaken by various bodies to safeguard the rights and interest of consumers.

    Need For Consumer Protection

    Click The arrow to view the needs

    Methods of consumer protection

    Methods of consumer protection

    Government initiated methods

    • Through Kenya Bureau of Standards ( KEBS) which sets standards to ensure quality of products.
    • Through weights and measures act which ensures correct quantity and size of products.
    • Through the public health act which ensures proper construction of business premises and hygienic standards .

      Consumer initiated methods

      • Formation of consumer organizations for example Kenya Consumer Organization(KCO) and Kenya Residents Association.
      • Reporting of major complaints by consumers to the relevant authorities incase of malpractice by traders.
      • Boycott: Consumers may refuse to buy from exploitative traders

          

      Traders initiated methods

      • Some manufacturers ensure that their products are sold at set prices for example Bata shoe company and publishers
      • Formation of traders organizations such as Kenya association of manufacturers (KAM)
      • Most traders are coming up with service charters to ensure quality services to their customers.

           

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