Regulation of Business

Updated: Jul 31, 2019

By Alvin Codner:

Whilst doing research on the broad topic of the regulation of business, the number five continued to appear. When it comes to regulation of business there is five areas of government regulation of business, five ways of growth, and five reasons why regulation takes place.

According to (Holt, 2015) from Demand Media, the five areas of regulation of business are advertising, employment and labor, environmental, privacy, and safety/health.

For advertising, according to ("," n.d.), laws pertaining to marketing and advertising set in motion by the Federal Trade Commission exist to protect consumers and keep companies honest about their products. Holt also stated that every business in the country is required to comply with the truth-in-advertising laws. The three main requirements of Truth-in-advertising laws are advertising in the United States truthfully and not misleadingly; businesses need to be able to back up claims made in advertisements at anytime; and advertisements must be fair to competitors and consumers.

Employment and labor laws are a part of the ever-changing regulations in business. These laws deal with minimum wages, benefits, safety/health compliance, work for non-U.S. citizens, working conditions, equal opportunity employment, privacy regulations, and cover the largest area of subjects of all the business regulations.

The environmental area is regulated by the Environmental Protection Agency alongside state agencies. The EPA enforces environmental laws passed by the federal government through educational resources, inspections and local agency accountability.

Privacy laws prevent business from disclosing this information freely. Information such as social security number, address, name, health conditions, credit card and bank numbers and personal history.

The safety and health area has the Safety and Health Act of 1970 which make sure that employers provide safe and sanitary work environments through constant inspections and a grading scale.

As for the reasons of why regulation takes place, ("Biz Case Studies," 2015) stated the top five main reasons which are the following:

  • To guarantee minimum standards e.g. of consumer protection, health and safety at work etc.

  • To protect the weak against the strong e.g. small companies against larger companies or groups of companies that work together to fix prices.

  • To provide benchmarks of good practice for business to set as minimum standards.

  • To provide an appropriate framework for ethical business behavior.

  • To create standards where none exist.

As for the waves of growth, the five waves are (in order from wave 1 to 5) The Young Nation, Confronting Railroads and Trusts, The New Deal, Administering the Social Revolution, and Terrorism and Financial Crisis. As each wave came about (usually after each war that ended in the 1800s and 1900s) they grew. According to (Steiner & Steiner, 2012, Chapter 10) the waves are triggered by popular demand for action to solve contemporary problems. Overall, Regulating Business has numerous of different processes for it to take action.


Holt, M. (2015). Five Areas of Government Regulation of Business. Retrieved from

Reasons for regulating business activity. (2015). Retrieved from

Steiner, J. F., & Steiner, G. A. (2012). Waves of Growth. In Business, Government, and Society A Managerial Perspective Text and Cases. New York: McGraw-Hill/Irwin.

Trust-in-Advertising. (n.d.). Retrieved from

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