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Integrating Policy Trends into Dynamic Advantage Essay

Strategic thought concerning business and the public sector issues are demanding increased focus by corporate management.  A third of U.S. senior level management dedicates two weeks a year to lobbying in Washington, D. C.  Almost half of all industry heads spend upwards to 30 days in a calendar year walking the halls of congress. Comprehension of expansive and dynamic policy trends, provide options for companies in their timely response to current issues.

Public Policy is a strategic necessity due to the regulatory systems increasingly cumbersome process. Regulations have become ever more detailed, and even simple regulatory issues require a concerted effort. It is important to note that by focusing on policy issues earlier in the strategic planning process, the implementation of mission critical plans enjoys a greater success rate.  Also the incorporation of managers in the initial stages can enhance strategic results.

Specialized individuals provide a layer of security from the constant changes of public policy. The support of boundary spanners within a corporation is a recognized method of advancing and maintaining public policy responsiveness.  Market innovations, societal changes and external trends fall under the auspices of such responsibilities.  Being on the forefront of technological advancement and major policy concerns are central to early trend recognition.  Examining methods managers need to integrate po1icy considerations into strategic options are central component to understanding the interaction between public policy and competitive strategy.

Thus underscoring the importance of how and why public policy should not be overlooked and there are distinct advantages by developing dynamic various types of policy initiatives.  Key policy trends drive current policy decisions and emphasize the survey of casual events that offer policy opportunities where nimble organizations can react or initiate an action.  Strategy relies on whether policies reduce game advantageous regulations or increase them.


In essence, competitive advantage or disadvantages can advance or can be undermined by public sector policies.

Regulatory policy can determine when and where strategic opportunities occur. Policy can influence whether or not products or services are required to undergo a governmental approval or licensing processes.  Thus trade policies have a direct impact on determining the level and extent of competition among international firms in a common market. The degree that an industry can marshal its government to force compliance by other countries has a definitive impact on future profitability.

If all firms in a specific industry manufactured or provided a service, their political focus might be collective, with all firms in the industry coordinating their efforts to influence legislative action. However, it is important to note proposed law on a particular product affects one company less than another, providing one firm(s) an advantage over the others.

New policy initiative can also influence domestic organizations, e.g. laws requiring pollution assessment that would increase operating costs to a given industry.  Unfortunately, much environmental policy is based on an inadequate under-standing of the dynamics of business firm behavior. The dominant perspective of government regulators is that the firm is little more than an entity seeking to minimize its own costs while ignoring the social costs of its operations.

The desire to minimize costs is an important driving force in the behavior of the firm; however, it can be channeled within the regulatory framework to bring about innovative, cost-effective solutions to environmental problems. Clearly, companies within the industry concerned would collectively seek to influence law makers and legislative language.  Motivated by the cost, such activities are presented as meeting the public need.


“Sometimes, not all competitors are affected equally by a regulation; some win, while others lose. Legislation, if passed, will have something to please each affected party.” (Bailey)

Prudent strategic development and planning should include a public policy profile that includes updates and full access.  Throughout the entire firm, a clear resolution must exist in order to benefit the firm. Managers must be able to freely interact and therefore be encouraged to regularly analyze public sector initiatives and to evaluate whether or not such regulations will harm or aid the industry, particularly their business. The visionary firms with forward thinking will not only assist in developing but will also draft legislative strategies and initiatives along side the lead agency due the policy comprehension.


It is important to mention that public policy debates sometime draw attention to the disparity between the national interest and that of an industry. There seems little doubt that a comfortable majority of the members of both the House and the Senate see policy trade as in the national interest.

Industries are grouped more by differences than similarities as they respond by industry.

There has been recent rigorous empirical attention to industries and public policy even though policy positions may appear to be random but there are some clear patterns better anticipate future policy shifts.

Mature manufacturing industries may be slower to respond to policy change, or may not respond at all, since they generally exhibit lower growth.  On the other hand, aggressive policy of antitrust enforcement has produced dissatisfied firms following judiciary prescription of rules and parameters of acceptable and non-acceptable business action.

Complexity, fragmentation, and conflict over values and interests among many un-coordinated stakeholders is the situation that characterizes both U. S. policy making and international cooperation on environmental protection. Unfocused control is no more effective than its administration, and the mission of administration is to achieve a goal.

Such conditions compel attention to process as a necessary means for getting at substance. A process-oriented viewpoint should not be a surprising one in the environmental arena. To be effective, each player needs to understand the relative concentration or dispersion of the benefits from supporting or opposing a policy alternative. The public does not believe it will be affected much.

Additional advantages include the clearness of intent, administration, and enforcement.  If new policy requires, there is sureness of application, equitability of coverage and direct access to administrative leaders.  Most importantly the perception to foresee economic consequences is afforded the perceptive public policy expert.

Clearly a distinction must be made between the determination of the control policy and the execution and administration of that policy. The overall effectiveness and benefits of public policy interactions include recognizing adaptability to changing institutional patterns. Ultimately, firms with association to the power and decision maker gain the greatest access to drafters and enforcers of governmental rulings.


Integrating Policy Trends into Dynamic Advantage

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Elizabeth E Bailey, the Wharton School, Department Public Policy and Management

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