Chapter 17: Business-Government Relations

Virtually every company has developed some capability to understand current and future developments in government and public policy as they relate to its activities- and to adjust and respond to these development.

Senior executives of the largest corporations are devoting substantial amounts of their time - often one-fourth or more - to problems stemming from external factors. The senior managements of major companies recognize that noneconomic factors can be as potent in fashioning corporate behavior as are economic forces. 
Senior corporate executives often list four extrnal areas that take substantial share of their time:

• Meeting with elected officials, say, to discuss specific provisions of a tax bill schedulaed for hearings and likely passage - or to oppose a pending reduction in the loans to business by the export -- import bank.
• Carrying on a dialogue with regulatory personnel - -in the EPA, FDA, OSHA and so on, depending on the products the company produces and the markets in which it is active.
• Maintaining relations with the corporation's various constituencies - employees, suppliers, shareholders, unions, local civic organizations, and a bewildering cariety of public-interest groups.
• Overseeing the company's communications with the public, including a substantial amount of time spent in speech making to business, academic, and professional societies.

In general, the CEO tends to concentrate on external aspects, long-term planning, and basic policy, and the chief operating officer (COO) - -usually the president - focuses on day-to-day managerial functions.
Many companies - foreign and domestic - find it useful to maintain a continuing presence in Washington, D.C., as well as in other national capitals. Three primary functions are performed by company offices located in Washington, D.C., and other national capitals:

• Supplying information to the home office on actions taken or contemplated by government.
• Assisting in obtaining government contracts
• Providing representation before legislative and regulatory bodies.

Lobbying is a communication with public officials to influence their decisions in a manner harmonious with the interests of the individual or grroup communicating. The total lobbying activity includes direct relations with legislative and executive branch officials and, in addition, dealing with the media that abound in national capitals and that influence national agendas.Trade associations interpret government actions and attitudes toward business, and vice versa. Many developments emphasize the role of state governements as regulators of private business.

Source: Business and Government in the Global Marketplace (7 edition, Murray L. Weidenbaum)