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.

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

Types of Organizational Structure

This is essentially the process by which the organization's mission is divided into discrete roles and tasks
of individuals within the organization. There are different ways of doing this. All essentially act initially
by grouping key activities in the organization and then allocating roles/tasks to individuals. These can fall
into the following categories:

 functional
 product/service
 geographical
 divisional
Functional

Grouping of major functions e.g., contracting, information, finance, personnel and public health in
health authorities.

A functional org structure starts with positions with the highest levels of responsibility at the top and
goes down from there. Primarily, though, employees are organized according to their specific skills and
their corresponding function in the company. Each separate department is managed independently.

Advantages:

 increases utilization and coordination of groups of people with technical/specialized expertise

 increases development and career opportunities for people in departments

Disadvantages:

 encourages sectional interests and conflicts

 difficult for organization to adapt to product/service diversification

Product/Service

Grouping by product/service. For example, in a hospital, into orthopedic, surgical, psychiatric rather
than medical, nursing, paramedical, hotel services (functional).

Advantages:
  increases diversification
 adaptability increased if service/product requires technical knowledge or large equipment

Disadvantage:

 encourages service conflicts

Geographical

A nationalized service develops regions, areas or district authorities.

Advantage:

 more responsive to local/regional issues and different cultures, national/local laws.

Disadvantage:

 can lead to localities/regions conflicting with each other

Divisional

Grouping of services and/or geography and functionality (but with functions such as finance, personnel,
planning retained at headquarters).

Advantages:

 suitable for international companies who are highly diversified, working in more than one
country. For example, a pharmaceutical company with divisions in each country producing and
marketing products developed by the parent company.
 corporate strategic control with production and marketing independence at divisions
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.

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