Wednesday, September 28, 2011

Reflections of the Washington, DC course: Business and Public Policy

It’s been over a week since I left Washington, DC after taking the one-week course, “Business and Public Policy: How Washington Works and What Issues Matter”. I’ve had some time to contemplate all that I learned and thought I would share some lessons from the week.

Companies react or respond to legislation and regulations in three different ways: 1) react to public policy when decisions are made, 2) monitor efforts toward public policy changes, and 3) directly participate.[1] Those companies using the first way generally have the most expenses for adjusting to legislation and regulation since it costs money to make those adjustments, especially when the company was not prepared for those changes. Companies that monitor public policy activity have less immediate adjustment costs since they can make slight adjustments over time as they see public policy forming in a certain direction. Companies that participate directly in the process have the highest costs for monitoring and lobbying but can potentially influence decisions that reduce adjustment costs. When companies evaluate which way they will react or respond to legislation and regulations, they also must consider what their competitors and other external organizations are doing. There is a potential for legislation and regulations to have larger effects on a company if the company does not directly participate and a competitor or other opposing groups do.

The word “lobbying” may have a negative connotation in the minds of many Americans. However, lobbying is a very important part of government and is necessary for educating representatives on the effects of legislation and regulations on constituents. In fact, lobbying is so important that it is protected by the 1st Amendment to the U.S. Constitution: right “to petition the Government for a redress of grievances.”[2] Consider this: legislators have many, many bills to consider each year. It is difficult to evaluate all of the effects and potential effects that a bill or regulation would have on individuals and companies. Lobbyists provide that information to legislators through research, surveys, or analyses that have been conducted. Information from all sides of an issue help legislators make educated decisions. The best way to influence public policy is through constituents; therefore, the most important job of a corporate lobbyist is to educate individual employees of the company on an issue so they will be inspired to contact representatives themselves.

Many Americans may have noticed that politics have become more and more party-based over the years. This observation is accurate for two main reasons. First, most moderates or independents do not know their representatives and never contact them for any reason. Therefore, representatives mainly hear from constituents who have strong opinions on the issues, thus pushing the parties further from midline opinion. Second, the costs of election campaigns have skyrocketed. Politicians must spend more time fundraising than ever before since television advertising is the best way to reach constituents and win elections. Since fundraising is done where constituents live, politicians don’t spend time together as they used to so they do not know each other or understand each other’s points of view.

These lessons have inspired me to become involved in the political process by knowing my representatives and expressing my opinions to them – both as a constituent and a representative to my company. This course has changed how I view Washington and has shown me that I can be part of the solution by speaking up instead of part of the problem by being silent. I will no longer stand by and watch; I will become active in the process of improving our nation. This course has been a highlight in my business education, and I highly recommend it.

[1] Keim, Gerry. Political Advocacy in the United States, Chapter 25, Managing Business Political Advocacy in the United States: Opportunities for Improved Effectiveness, pp. 418-433.

[2] Mount, Steve. “The United States Constitution.”, accessed 28Sept 2011.

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