GGSR:

Governance, Business Ethics, Risk Management and Control

Chapter 2
Organizations: Their Political, Structural and Economic Environment

Learning Outcomes:
At the end of this lecture, you are expected to:

✓ Understand and explain organizational theory, structure, design, centralization/decentralization

and levels;
✓ Discuss the implications of government regulation:
✓ Enumerate the advantages and disadvantages of a government planned economic activity:
✓ Identify the different political dimensions relating to business.
✓ Explain the role and influence of government and different pressure groups on corporate policy.

Introduction and Core Values Integration

To understand the internal and external organizational environment, it is important to cover first
organizational theory, organizational structure, centralization and decentralization and levels of the
organization.

Organizations are complex adaptive systems that use people, tasks and technologies to achieve specified
goals and objectives. Structuring the organization represents the division and distribution of work among
members of the organization, and the coordination of their activities in such a way that they are directed
towards achieving the declared goals and objectives of the organization. Management is about how the
organization manages the structure, the resources and the activities within the organization and how it
measures and monitors the resulting performance towards achieving the declared goals and objectives of
the organization.

Organizational theory attempts to explain how organizations work by defining the common features that
organizations share, by collecting data and by analyzing them, assessing "what works where - and why!".
It is important to understand that structure and management of organizations will differ depending on
the following: the sector they operate in (public, private, non-profit), the stakeholder configuration, the
particular strategic goals and objectives they set themselves. There is therefore no one recipe that will
work across all organizations, the structure will reflect the DNA of organizations which translates to "the
way we do things around here" and other factors particular to any one organization.

Unity is one of the core values of Wesleyan University-Philippines.

Many organizations find it incredibly difficult to have all of their people, no matter how intelligent and
capable they are, on the same page working together toward the overall company objective. Getting
everyone aligned is a challenge for many reasons; firstly, people naturally have different theories, opinions
and experiences, which lead them to think differently about what makes the business successful and
therefore what the strategic drivers are and should be. Organizations are still running businesses
functionally and therefore uniting entire organizations is very difficult when people and leaders are
rewarded for their contribution to their own business units only. At the heart of the entire organization lies
a barrier: the sheer difficulty of getting unity throughout the broad entity.

The beauty of bringing individuals together to form teams and collectively entire organizations is their
different thinking, experience, values, norms, beliefs, capabilities etc.. The reality is they have to
collectively form a ‘unit’ that operates for the greater good of an organization’s mission, vision, strategy
and purpose. Everyone needs to work in unison to achieve full organization potential and to produce
sustainable long-term results.

ORGANIZATIONAL THEORY
Organizational theory is especially useful for people who manage organizations, or who aspire to do so in
the future. But whether or not you are a manager, for example, if you work in public health, you will be
working with organizations (like hospitals, charities, local and national government etc.) so you need to
understand them. It enables the manager to see that his or her organization and its problems are rarely
wholly unique. Usually, much of value can be learned from examining the behavior of other organizations,
in broadly similar circumstances. It can help us to explain what is happening in our own organization and
to identify possible solutions to its challenges, issues and problems provided the solutions selected take
into account cultural and other key aspects and are not simply 'broad-brush' or replica implementations
based on what is done elsewhere.

Organizations, especially large organizations are generally 'complex', having many inter-related facets and
areas that need to be coordinated, managed together to achieve efficiencies and effectiveness in
achieving stated goals and objectives. organizations also need to be 'adaptive', they need to respond to
ongoing changes in the environment in which they operate (i.e. the political, social, economic and
technological conditions) that together form the environment in which organizations operate.
Even if you do not aspire to be a manager, organizational theory should be of interest to you for it's around
us. Organizational theory can help explain how they work and why they work in the ways they do.

ORGANIZATIONAL STRUCTURE
According to Investopedia, an organizational structure is a system that outlines how certain activities are
directed in order to achieve the goals of an organization. These activities can include rules, roles, and
responsibilities.

The organizational structure also determines how information flows between levels within the company.

Organization structure is the pattern of relationships among positions in the organization and among
members of the organization. The purpose of structure is the division of work among members of the
organization, and the coordination of their activities so that they are directed towards achieving the same
goals and objectives of the organization. Structure defines tasks and responsibilities, work roles and
relationships and channels of communication.

Objectives of an Organizational Structure

➢ accountability for areas of work undertaken by groups and individual members of the organization
➢ coordination of different parts of the organization and different areas of work
➢ effective and efficient organizational performance including resource utilization
➢ monitoring the activities of the organization
➢ flexibility in order to respond to changing environmental factors the social satisfaction of
members of the organization

Dimensions of Organizational Structure

Child (1988) suggests six major dimensions as components of an organization structure:

▪ allocation of individual tasks and responsibilities, job specialization and definition

▪ formal reporting relationships, levels of authority and spans of control
▪ grouping together of sections, departments, divisions and larger units
▪ systems for communication of information, integration of effort and participation
▪ delegation of authority and procedures for monitoring and evaluating the action motivation of
employees through systems for performance appraisal

Consequences of Structural Deficiencies (Child):

▪ low motivation and morale

▪ late and inappropriate decisions
▪ conflict and lack of co-ordination
▪ poor response to new opportunities and external change
▪ rising costs - e.g. diseconomies of scale
CENTRALIZATION AND DECENTRALIZATION
Centralization when all the power for decision making rests at a single point in the organization ultimately
in the hands of one person or group, the structure is centralized. If the power • is dispersed among many
people/groups, it is known as decentralized or distributed. Note that some functions (research, planning,
finance, personnel) are less amenable to decentralization than others (e.g. contracting, client services).
Centralization and decentralization should not be treated as absolutes, but rather as two ends of a
continuum.

Advantages:

✓ frees top management of routine every day decisions to concentrate on strategic responsibilities
✓ decisions are more local, quicker, more responsive to clients
✓ increased awareness of cost effectiveness through the organization
✓ increased motivation and satisfaction by junior management

LEVELS OF THE ORGANIZATION

According to Drucker, organizations are layered into three main levels:

The technical level of the organization is concerned with specific operations and defined tasks, with actual
jobs to be done, and with performance of the technical function.

The managerial level (or organizational level) is concerned with the coordination and integration of work,
at the technical level, e.g. resource allocation, administration and control of the operations of the
technical function.

The community level (or institutional level) is concerned with the broad objectives and the work of the
organization as a whole. Decisions made at this level will include the selection of operations, development
of organizations in relation to external agencies and the wider social environment.

REGULATION
Regulation is the administrative process of writing and passing laws that, to a certain extent, restrain some
fundamental rights of businesses. It can be distinguished from principal legislation by elected legislative
body. Regulation can take many forms: legal restrictions promulgated by a government authority, self-
regulation by an industry in which the type of business belongs such as through a trade association, social
regulation, and market regulation. One can consider regulation as actions of imposing sanctions or
penalties to the extent permitted by the law.
AREAS OF GOVERNMENT REGULATION OF BUSINESS

Relevant to the existence of Business

The State Will Take Charge of Economic Activity

A centrally planned economy is one where all major economic decisions are under the control of the
government. This type of economy is typically associated with socialist and communist ideals, and was
first attempted in the Soviet Union in the early 20th century. In contrast to a free market or capitalist
economy, a centrally planned economy does not allow the supply and demand of the market to define
prices, wages, or the production of goods.

The theory behind a centrally planned economy begins with the idea that the market is not a measure of
what is best for the country. Subject to whim, trend, and a myriad of opinions, the free market can slow
or even impede the goals of a central government. By having the state run the economy, the government
is totally able to enact the programs, schemes, and plans deemed as best for the country by the leaders.

Most modern economies include a mix of centrally planned and free market behavior. While the
government may control certain areas of the economy, much of the market runs at the impulse of the
people. In such an economy, a person has the right to start a private business, thanks to the free market,
but may have to pay business taxes i and charge a sales tax based on the centrally planned aspects.

Regulations relevant to the conduct of business

The government has set many business regulations in place to protect employees' rights, protect the
environment and hold corporations accountable for the amount of power they have in this business-
driven society. Some of these regulations stand out more significantly than the others because of their
relevance to every employee, consumer and society in general.

Advertising

Laws pertaining to marketing and advertising set in motion by the regulatory authority exist to protect
consumers and keep companies honest about their products. Every business is required to comply with
the advertising laws and could face lawsuits for violation. advertising laws are made up of dozens of tidbits
under three main requirements: advertising must be truthful and non-misleading; businesses need to be
able to back up claims made in advertisements at any time; and advertisements must be fair to
competitors and consumers. Additionally, in compliance with the packaging and labeling requirements,
all product labels must include information about the product, such as nutrition, size, and distribution and
manufacturing information.
 Deceptive Advertisement Greenwashing

Employment and Labor

Among the ever-changing regulations in business are employment laws. These laws pertain to minimum
wages, benefits, safety and health compliance, working conditions, equal employment opportunity, and
privacy regulations cover the largest area of subjects of all the business regulations. Several employment
regulations stand out as the heavy hitters among the others. The Department of Labor and Employment
(DOLE) through the Regional Tripartite Wages and Productivity Board (RTWPB) set the minimum i wage
for workers in the Philippines. There are also several required benefits, including unemployment
insurance, workers' compensation insurance and employee social security assistance which is mandatory
and applicable generally to all employees.

Environmental

The carbon footprint of businesses on the environment is regulated by the Department of Environment
and Natural Resources (DENR). The DENR enforces environmental laws passed by the government. This is
done through frequent inspections and environmental audit. The Environmental Management Bureau
(EMB) and other offices and bureau exist to help businesses small and large alike achieve environmental
compliance, and should serve as a resource more than an enforcer.

Privacy

Sensitive information is usually collected from employees and customers during hiring and business
transactions, and privacy laws prevent businesses from disclosing this information freely. Information
collected can include social security number, address, name, health conditions, credit card and bank
numbers and personal history. Not only do vari0US laws exist to keep businesses from spreading this
information, but people can sue companies for disclosing sensitive information.
Safety and Health

The safety and health laws ensure that employers provide safe and sanitary work environments through
frequent inspections and a grading scale. A company must meet specific standards in order to stay in
business. These regulations have changed frequently throughout the years alongside the changing
sanitary and workplace standards. In accordance with legal provisions, employers must provide hazard-
free workplaces, avoiding employee physical harm and death, through incorporating these in procedures
manual.

POLITICAL ENVIRONMENT OF BUSINESS

Regardless of how attractive the economic prospects of a particular country or regions are, doing business
there might prove to be financially devastating if the host government imposes heavy financial
consequential penalties on a company. An unanticipated event in the political arena will also lead to the
loss of revenue assets resulting from policy change.

The political environment in which the firm operates will have a significant impact on a company's
international operating activities. The greater the level of involvement of the company in a foreign market,
the greater the need to monitor the political climate of the countries where the business is conducted
since this political climate will affect among others the marketability of the company's product, the inflow
of investments and more importantly valuation of share price.

Changes in government more often result in changes in policy and attitudes towards foreign business.
Bearing in mind that a foreign company operates in a host country at the discretion of the government
concerned, the government can either encourage foreign activities by offering attractive opportunities
and incentives for investment and trade, or discourage its activities by imposing disincentives and
restrictions such as unfriendly stricter regulations and import quotas, etc. An exporter that is continuously
aware and in-touch of shifts in government attitude, need to be able to adapt export operation strategies
accordingly.

Almost all governments today have an active participation in their countries' economies. Although evident
to a greater or lesser extent in most countries, government ownership of economic activities is still
customary in the former centrally Planned economies, as well as in certain developing countries which
lack a sufficiently well-developed private sector to support a free market system

One of the primary concerns to an investor should be the stability of the target country's political
environment. A loss of confidence in this respect could lead to a company having to reduce its operations
or to withdraw altogether. One of the surest indicators of political instability is a frequent change in
regime. Although a change in government need not be accompanied by violence, it is often a precursor of
change in policy towards business, particularly international business. Such a development could impact
harshly on a firms' long-term international commitment.

Reflected in a government's attitudes and policies towards foreign business are its ideas about how to
best promote national interest in the light of the country's economic and political resources and
objectives. Foreign products and investment seen to be vital to the growth and development of the
economy often receive favorable treatment from the government in the form of reduced tax, exemption
from quotas, and other incentives. On the other hand, products classified by a government to be luxury,
non-essential, undesirable, or a threat to local industry are frequently subjected to a variety of import
restrictions such as quotas and tariffs.

CONTEMPORARY SOCIAL ISSUES

Corporations deal with various social issues and problems, both directly related to their operation and
not. It would not be possible to satisfactorily describe all of the social issues faced by business. This section
will just briefly discuss three contemporary issues that are of major concern: the environment, global
issues, and technology issues.

ENVIRONMENTAL ISSUES
Corporations have long been criticized and even lambasted by some pressure groups for their negative
effect on the natural environment in terms of wasting natural resources and contributing to
environmental problems such as pollution and global warming. The use of fossil fuels, which according to
some has long been obsolete, is thought to contribute to global warming, and there is both governmental
and societal pressure on corporations to adhere to stricter environmental standards and to voluntarily
change production processes in order to do less harm to the environment. Other issues related to the
natural environment include irresponsible disposal of waste, deforestation, and land degradation. It is
likely that corporate responsibilities in this area will increase in the coming years.

GLOBAL ISSUES
Corporations increasingly operate in a global environment. The globalization oi business appears to be an
irreversible trend, but there are many opponents to it. critics suggest that globalization leads to the
exploitation of developing nations' workers, destruction of the environment, and increased human rights
abuses. They also argue that globalization primarily benefits the wealthy and widens the gap between the
rich and the poor. Proponents of globalization on the other hand argue that open markets lead to
increased standards of living for everyone, higher wages for workers worldwide, and economic
development in impoverished nations. Many large corporations are multinational in scope and will
continue to face legal, social, and ethical issues brought on by the increasing globalization of business.

Whether one is an opponent or proponent of globalization, it does not change the fact that corporations
operating globally face daunting social issues. Perhaps the most pressing issue is that of labor standards
in different countries around the world. Many corporations have been stung by revelations that their
plants around the world were "sweatshops" and/or employed very young children. This problem is
complex because societal standards and expectations regarding working conditions and the employment
of children vary significantly around the world. Corporations must decide which one is the good and
responsible option; adopting the standards of the countries in which they are operating or imposing a
common standard world-wide. A related issue is that of safety conditions in plants around the world.
Another issue in global business is the issue of marketing goods and services in the international
marketplace. Some U.S. companies, for example, have marketed products in other countries after the
products were banned in the United States. An example is the "magic sugar" which is already banned in
the U.S. and yet we can still find it here in the Philippines as sweetener used by sidewalk vendors, typical
example of a wrong product that falls into wrong hands.

Dumping is also another delicate issue in globalization. Secondary products or variants are sold to foreign
countries at the price chokingly low for the host country businessmen to compete thereby killing local
industry. Chicken is just one example wherein the best parts (e.g. breast, thigh and drumstick) were sold
at origin country like US at price high enough to cover cost with a very decent profit for the whole chicken.
The secondary parts (e.g. backs and wings) are exported to Africa at price so low for locals to

TECHNOLOGICAL ISSUES
Another contemporary social issue relates to technology and its effect on society' For example, the
Internet has opened up many new avenues for marketing goods and services, but has also opened up the
possibility of abuse by corporations. Issues of privacy and the security of confidential information must be
addressed. Biotechnology companies face questions related to the use of embryonic stem cells, genetic
engineering, and cloning. The marriage of science and technology has a very serious implications, this
union must not be given "blank check" otherwise it can do limitless things. As our technological
capabilities continue to advance, from prolonging life, manipulation of global food production to keeping
us on hook with tech things, it is likely that the responsibilities of corporations in this area will increase
dramatically. All of these issues have far-reaching societal and ethical implications.

ROLE OF THE STATE AND ITS IMPACT ON BUSINESS

Some sectors have criticized that the government regulatory parameters on the economy is restrictively
futile on some extent considering that, often, it not only lacks teeth but also has some features that
obstructs the full capability of the enterprise in terms of maximizing wealth. Others mock that some
countries claiming to be free market economy are not actually free market at all, With so much regulation.
At present, some of the most continuing debates in economics are actually focused on the role of
government.

The importance of private ownership is perfectly consistent with what people believed about personal
freedom. People and the business sector believed in limiting the government's authority over the
economic pursuits of individuals, including its role in the overall kingdom of economics. Most people
believed that private ownership of business is more ideal than government ownership to achieve the best
economic outcomes. They further believed that government should be where it is, and that is on
regulatory aspects, except for some critical industries.

In spite of this "leave us alone" attitude of business sector most people still want the government to
perform certain important tasks in the economy more importantly on regulation, and our legal system
provides a very sound fundamental structure which creates an atmosphere suited for this business
environment. Below are some of the important involvements of the government which highlights its
functions on regulation and protection of the general public:

ROLE OF GOVERNMENT IN BUSINESS

The private sector is the chief economic force of every country, but it needs government regulation. The
government's role in business is as old as the country itself; the Constitution gives the government the
power to regulate some commerce. Though the government's role has increased over time, the business
community still enjoys considerable freedom. However, the government still exercises its authority
several ways.

Consumer Protection

The government's role in business includes protecting the consumer or customer. When a vendor fails to
honor the guarantee, the purchaser has recourse in the law. Likewise, when a product causes harm to an
individual, the courts may hold the vendor or manufacturer responsible, Labeling is another requirement
the government imposes on marketers. Many foods, for example, must display nutritional content on the
packaging. The government has been making advances in consumer rights for decades. Nonetheless, the
consumer movement still needs considerable development to protect the public. Other manifestations of
this protection are as follows:

• Businesses need the court system for protecting property rights, enforcing contracts, and
resolving commercial disputes.
• Governments protect consumers from businesses. For example, businesses need to secure the
approval first from the government whenever there a proposed merger or other business
combinations to make the industry less competitive which ultimately means too liberalized price
setting at the disadvantage of consumers.
• Government hears and corrects consumers' complaint about business fraud and put into effect
recalls of substandard and dangerous products.
• Government controls private companies' actions to protect public health and safety. An example
is the control effort of the Food and Drug Administration (FDA) banning harmful drugs and
medicines. Although the agency is showing less interest on some food supplements that may not
imminently endangering the health of but are having some false claims with no proof of its
efficacy. Some of these food supplement companies are actually in the business of having textual
and orals capitalizing the public's confusion through the use of tricky placements of words and
lines.

Contract Enforcement

Businesses deal with other businesses. These contracts may be complex, such as mergers, or they may be
as simple as a warranty on supplies purchased. Companies bring one another to court just as individuals
do. An oral agreement can constitute a contract, but usually only a written agreement is provable. If one
party fails or refuses to meet its obligation under a contract, a company will turn to the government's
legal system for enforcement.

Employee Protection

Many agencies work to protect the rights of employees. This right covers the following: regular
employment, probationary employment, minimum employable age, prohibition against stipulation of
marriage, anti-sexual harassment law and many others.

The minimum wage law is another good example of government involvement which mutually beneficial
to both the management and labor, since this would set a hard minimum benchmark of compensation
across all industries. In addition, government set laws on pensions for both public and private employees
while they are still in the mainstream workforce of industries.

Environmental Protection

When a marketing transaction impacts a third party besides the marketer and purchaser the effect is
called an “externality." The third party is often the environment. Thus, it is the government's role to
regulate industry and thereby protect the public from environmental externalities. Whether the
government is effective in this role is a matter of much discussion.

Because people have become more and more concerned about the environmental impact of industries,
the government through its legislative branch passed some laws the pure intent of which is to protect the
environment. Famous of these laws is the "Clean Air Act", which has become the epicenter of troubles for
businesses engage selling motorcycles with 2-stroke engine in mid 2000s. This law was also the start of
downhill for government contractors dealing garbage disposal via incinerator, a process not allowed in
principle by this law.

Permission

Most businesses need to register with a government to operate. Corporations need a charter, and other
forms of businesses, such as limited liability companies or partnerships, need other forms of registration.
The function of this registration is usually to define the financial liability the owners of the company have.
It limits their risk to the amount they have invested in that particular organization. Registration also allows
the government to monitor companies to execute its other functions in the business world.

Legitimate businesses need permission from governments to operate and corporations need a charter
from government. Businesses need various registrations, licenses, and permits from local governments as
well as from different agencies and bureaus.

Taxation
Governments at all levels tax businesses, and the resulting revenue collected is an important part of
government budgets. Some revenue is taxed at the corporate level, then taxed as personal income when
distributed as dividends. This is in no way inappropriate, since it balances the tax burden between the
company and individual and allows the government to tax more equitably.

PRESSURE GROUPS
A pressure group is an organized group that seeks to influence not only government policy but also private
enterprises' operating policy. These groups are also concerned in the protection and advancement a
particular cause or interest. They may promote a specific issue and raise it up as commercial or political
agenda or they may have higher general ideological objectives in mind when they do some campaign for
their cause.

The following are the types of pressure groups which can become variables to consider in laying down
platform of governance not only in government but also in private enterprises.

ECONOMIC PRESSURE GROUPS

Giant Private Corporations (the Giant Connection)

Many large industrial corporations have clout in government policies. These corporation need to ensure
that their interest are protected since large government contract are often at stake. The relative size and
power of these companies can sometimes rival to that of the government and therefore, bring massive
influence on political and economic decisions which affects variety of business activities. With size and
power, there is this implication of lobbying certain laws and regulations, putting pressure on their once
political beneficiaries who are now in position and to certain degree, do some maneuvers to outdo their
competitor through the use of "special connections". It will now be a million-peso question on whether
corporations with good governance play the game of these companies.

Professional Organizations

This is a powerful group bound by the common interests of its members. The Philippine Institute of
Certified Public Accountants (PICPA), the Philippine Medical Association (PMA) and the Integrated Bar of
the Philippines (IBP) are prime examples. In the Philippines where history's turning points are sometimes
defined where the military stands, the Philippine Military Academy Alumni Association Inc. and the
Association of Generals and Flag Officers Inc. (AGFO) are important pressure groups. The Philippine Bar
through the body called the Judicial and Bar Council (JBC) plays an important role in the selection and
nomination of justices this body is also an important source of opinion.
Trade Associations

Association of businesses with common interest to protect to is the simplest description of a trade
association. The number of business and trade associations at present is more apparent than ever before.
The increase in government's initiative and other progressive laws has prompted an increase in business
representation from this group. As new regulatory bureaus and bodies that are put into place, good
number companies have found the need to react to the new policies rather than having an input into
helping to formulate those policies. They are more on a defensive mode rather than being active in
crafting those policies which affects them. This business groups have seen the need to organize as
essential if they are to influence the formation of policies not only in government but also in private
enterprise. Chamber of commerce, business clubs, and other commercial associations like the Association
of Hospital Owners which made a hard stand on the implementation of the cheaper medicines law, are
classifiable under this group.

Trade Unions

One of things that greatly influence the corporate governance principles and government policies in
Philippine setting is in the area of labor and management. It such a pretty delicate issue that companies
are willing to hire the best consultants when it comes to legalities about labor. In the Philippines, we have
several clusters of unions that can have pressure on governmental policies and companies' philosophy
and governance, one of which is Partido ng Manggagawa (PM), Associated Labor Union-Trade Union
Congress of the Philippines (ALU-TUCP) is another and many others that are working for the protection of
the labor sector.

Labor groups certainly have influence on policies considering the vast sector that it covers. This sector can
be considered as the common denominator of all business endeavors and its collapse or a mere and simple
disorder will definitely send a strong regional message that a country is not safe for long-term investment.
Those in-charge of governance therefore should take into account seriously this pressure group. We need
to understand that at the worst scenario of a labor strike, it can cause financial pain to the business
enterprise and it can also affect the corporate reputation among others.

PUBLIC PRESSURE GROUPS

The These are groups that represent a cluster of the public on certain issues. The development in public
pressure groups can be partially explained by a change in attitudes towards some of the government
policies. The public have turned to pressure groups since they are visibly vocal on issues that pat the hearts
of certain individuals. These individuals have the belief that these pressure groups might be triumphant
in changing what they believed unacceptable, the most obvious present issue would be environmental
and climate change issues. Example of groups with advocacies on environment are the Haribon
Foundation in local setting while there is Greenpeace in the international level. In the area of consumer
protection consumer and Oil Price watch is one good example of these pressure groups. While the giant
companies are more individualistic pressure groups; that is they are concerned only on their well-being,
these groups represent the interests of the public in general.
SECTORAL PRESSURE GROUPS

Sectoral pressure group refers to groups which work to protect and advance the interest of specific social
groups in a certain society. At times they are crossbreed of political groups. Typical example, in the
Philippine setting, is the Gabriela which is for women and children specifically on promoting equal
opportunity for women. In recent years, the civil rights movement and the right of equality for women
have been brought to the forefront by this particular pressure group.

The urban poor groups are also other groups to be reckoned with in policy setting since this sector has
numbers to put on the table especially during election time. They are voting block that can make or break
an official. The third sex is also another sector worthy to be looked upon most especially that this group
are now given wide recognition in our society. The gays and lesbians are now slowly expanding its mass
which will make some politicians and policy makers think twice before talking about things which might
be against what this sector believes in.

GOVERNMENTAL UNITS PRESSURE GROUP

The level of maturity of the system of administration and the development government agenda in the last
two decades, and the enormity of the sums of money involved, has led to an expanded role being played
by the local governments as administrative arms of the national government. This has led to a greater
degree of freedom and power for the local government units (LGUs). This freedom and power give rise to
the lobbying power of LGUs which is sometimes left unbalance in favor of LGUs with stronger connections.
It has now become ordinary for provinces and individual cities to have their own permanent fixture or at
least a close contact in the national level or at Malacañang in particular for them to be at the beat of
decision making so that they can represent their beliefs and stands with speed, effectiveness and proper
timing as the need arise. For so obvious reason, these LGUs wish to be as near as possible to this ultimate
source of revenue to put in a bid for extra resources for local projects and developments.

References:
Good Governance & Social Responsibility 1st edition – Win Ballada, Biore, Gonzales, Caparas, Burgos
Investopedia.com

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