Managerial Responses to State Policy

Every business firm confronts a stream of changes in the laws, policies, and regulations within which it is permitted to operate and in the business and legal tools it is permitted to utilize.  Sometimes the firm, without paying attention to such matters, will prosper from a long string of such decisions.  As they say, even a blind pig sometimes finds acorns.  Often, however, changing policies will reflect interventions by rival firms, or by adverse consumer interests, or by technical experts who are indifferent to the firm’s business needs.  If the firm is an exporter, for instance, rival producers in the importing country may seek to impose trade barriers, or to erect regulations on product safety that privilege their wares over those of the foreign firm.  If the firm is an importer of goods from overseas, local rivals who need no such imports may seek to erect barriers and regulations threatening its supply of goods from abroad.  With very few exceptions, the top management of any firm will need to pay continuous attention to the many things relevant states are doing, or not doing, to shape its business environment.  This memo provides a brief classification of the moves routinely available to management.