Public Policy and Changing Business Environments - Essay Example

Assignment ref: (your Public Policy and Changing Business Environments Introduction The inter-relation between government and businesses is of great significance for the public, whom both profess to serve. Of the two, the government is empowered by the constitution to lay down the public policy and implement it through appropriate action plans; businesses attempt to maximize their profits and dominance in the market place, even as they work within the ambit of the law of the land. Law, as is well known, is subject to interpretation and hence conflict of interests is bound to appear from time to time. This essay examines the issues of public policy, its formulation, responsibilities of businesses, etc. in the changing environments and argues that policies and practices have to keep pace with changing times and aspirations of the people. How is public policy made? A policy focuses on a desired goal through a statement of intention. For example, a policy may state that inflation will be controlled to a level of 3% or that fiscal deficit will be contained to within 1% of gross national product, or that carbon emissions from power plants shall be reduced by 15%, during a particular period. Similarly, an automaker may declare a policy of achieving 75% level of outsourcing for its components, or business expansion through acquisitions etc. Thus policies, whether declared by a government or by a business, are statements of intention for achieving specific objectives, and act as beacons for concerned executives to follow up with appropriate actions. (your last name) 2 In Policy Analysis: A Political and Organizational Perspective William Jenkins states that a policy is ‘a set of interrelated decisions taken by a political actor or group of actors concerning the selection of goals and the means of achieving them within a specified situation where those decisions should, in principle, be within the power of those actors to achieve’(Jenkins, 1978). Thus while it is the prerogative of governments to set public policies, governments are goaded into action by the public while for a business it is the specified situations that trigger policy decisions. According to Miyakawa, a public policy is a culmination of a process - a process that examines various options for possible course of action on any specific issue for which there is a public demand, and these issues and demands generally arise out of the prevailing socio-economic situations (Miyakawa, 1999, Science of public policy, Part 12, p.3). Evaluation of options will lead to selection of a policy, implementing plan of actions in order to the achieve the objectives, and monitoring the results from time to time either to modify the policy or even to abandon it altogether if circumstances change. Once a policy option is chosen reflecting the public demand, the government as the executive authority lays down the policy and implements it through either new legislation (if required) or under the existing laws by issuing the relevant notifications and rules. These notifications and rules are legal statutes to be observed by all. Thus if a public policy is laid down to ban sale of alcohol to persons of below 18 years of age, notifications reflect this ban while the rules under the notification take care of the operational details of implementing the policy. (your last name) 3 In general, a government makes public policies to take care of the social, economical, political and technological needs of a society. Political parties have to fight elections periodically and without satisfying the above needs, they would not be able to win majority votes or form governments. Election periods generate intense debates and are important starting points for a number of public policies. Democracies have distinct advantage over other forms of governments in this regard, as public discourse on any issue is free for all and intense. Public policy, governments, businesses and society In democratic countries, political parties have to respond to public demands positively, keeping in mind the public mood and majority opinion. For example, if prices of certain items are rising due to short supply, there would be demand for ban on export of those items or liberal imports and the government has to accede to such demand through appropriate policy changes. Similarly, on issues such as healthcare or social security, citizens bring pressure to bear on governments for policies that are more appropriate for the vociferous middle class society. They make effective use of the print and electronic media for canvassing support for policies that benefit this section of the society. The current debate among the US presidential candidates, on the healthcare and economic situation or a pullout from Iraq, is a case in point. Apart from pressure from public, governments are often subject to intense lobbying mainly from interested business houses or from international pressures with regard to setting up public policies. For example, outsourcing is an issue of contention with the public crying foul for the jobs that are lost to low cost countries while on the (your last name) 4 contrary, the industry is lobbying for promoting outsourcing as a means to reduce costs. Government’s public policy in this regard has to satisfy both interest groups to the extent possible. While some policies may benefit the industry, others benefit the consumers. Coming to international pressures, a typical example is the proposed action on global warming with a number of European and Asian nations signing the Kyoto protocol for emission reductions while the US is under intense pressure to fall in line. Thus, popular demands, or special interest groups (lobbies) or international pressures influence public policies. A government is the appropriate body to formulate public policy as a whole. This is because a government is answerable to the public and seeks its support from time to time. Due constitutional process results in a government formation, the mandate for it is to govern by bringing about appropriate legislation and policies, reflecting the programs promised during election campaigning and the popular sentiment that put it into the executive position. Further, during the period of their service, elected representatives interact with their constituencies and provide feedback to the government on local, regional, national or even international issues. This feedback helps the government to be responsive to popular sentiment instead of acting in an arbitrary manner arising out of its authority to govern – a situation of checks and balances. Thus, the policy itself becomes reflective of the majority public opinion and hence is a collaborative effort in a sense. On the other hand, if bureaucracy or outsiders like consultants formulate public policy, more often than not, individual prejudices and predilections will over-ride public interest. Such persons are neither directly answerable to the public nor do they have a feel for the (your last name) 5 popular sentiment to the same extent as elected representatives. They can be influenced by vested interests like the industry & commerce associations, insurance and financial companies, to name a few. Ethical business is a phrase of contradicting terms – an oxymoron. The primary objectives of a business are to survive, make profits and grow. It is not necessary that these objectives be in consonance with what is best for consumers of the products or services of that business. Milton Friedman’s famous statement, “The social responsibility of a business is to increase its profits” of yesteryears has few takers in today’s context. The debate on ‘Rethinking on social responsibility of business’ conducted by Reasononline in October 2005 throws interesting points of view on the topic with the participation of M/s. Friedman, Mackey and Rodgers (Reasononline, 2005). While Friedman still maintains that as long as a business competes within the ambit of fair play, it has all the freedom to use its resources to its best ability for maximizing profits. John Mackey, CEO and founder of Whole Foods strongly disagrees with Friedman and holds the view that while a business has profit maximization as its goal, the stakeholders of that business may have different expectations altogether. In other words, a business may aim to maximize its profits but at the same time has to address the needs of all of its constituencies simultaneously. Friedman deftly reargues his position by comparing each of the positions taken by Mackey to prove how Whole Foods practices fully conform to his own views, even if they are disguised in the cloak of social responsibility. He concludes that his statement that “the social responsibility of business is to increase its (your last name) 6 profits” and Mackeys statement that “the enlightened corporation should try to create value for all of its constituencies” are equivalent (Reasononline, 2005). One can conclude the argument by noting that a business has to abide by the law and go much beyond, to be a socially responsible corporate citizen in its own long-term interest. Mere observance of the law is not enough and such an attitude will invite adverse reaction from the stakeholders like investors, consumers and employees. A company has to proactively create a vibrant and caring image of itself and sustain it in the long run through policies and actions in order to build its brand value. A brand value is much more than the quality of products or services, in spite of resorting to all the high decibel publicity. The shocking episode of Enron Corporation, touted as the world’s largest energy company, clearly confirms the view that socially responsible corporate behavior is more important than showing fraudulent profits (Mintzberg et al., 2002). Trends, society and workplace According to Dawson, changes occur in major areas viz., society, politics, economy, technology, and demographics, and digitalization, globalization, aging, anxiety and virtual worlds are the trends that reflect these changes (Dawson, 2008). The US society has been evolving at an increasingly rapid rate on all the fronts in the past 60 years since the end of World War II. It has emerged as the undisputed leader of the democratic world and as an economic super power backed by military might and technological leadership. On the political front, it strongly advocates democratic systems. On the economic front, the US government aggressively promoted liberalization and globalization. Its manufacturing, banking, financial, insurance and other service sectors (your last name) 7 have all harnessed technology in a major way and the impact of the information technology has been of truly global proportion. Having reached a stage of prosperity and leadership, the society’s attention turned to unresolved societal issues such as civil rights, equal opportunities and human rights – both at home and abroad. The combination of technological revolution and societal issues are influencing the workplace in significant ways. Organizations are part of societies and have to evolve their internal and external policies to be in tune with societal changes. While the internal policies generally cater to equal opportunities and civil rights, the external policies cover corporate governance including environmental compliance. Each of these broad headings includes the whole spectrum organizational policies in functional areas of administration, manufacturing, purchasing, marketing, human resources, finance and management. Just as industrial revolution in the United Kingdom in the nineteenth century or the automobile revolution in the United States in the twentieth century changed the societies forever, the advent of the information and communication technologies revolutionized the workplace, across the globe. The ubiquitous computer and the mobile phone are the visible examples of this revolution. As the adage goes, information is knowledge and the internet has made it possible for everyone to access information and to express oneself freely. The importance of this major shift in the lives of individuals is that, while in the past an employee left his private life at home and went to his workplace, today he cannot and will not do so. As the popular song Hotel California says, ‘you can always checkout (your last name) 8 but you can never leave’, and today an employee stays connected with his work or home all the time virtually, literally speaking. These trends in society (rights), economical (globalization & liberalization), technological (IT & communications) challenge the organizations to evolve workplace policies that respect the trends and yet serve the business needs. Practicing what one preaches becomes all the more important as global competition intensifies. Just as there is no boundary for a company for marketing its products today, trends point out that a knowledge worker can find work anywhere in the world, whether he is physically present there or not. This trend will increase the bargaining power of employees and retaining them will be a major issue, as is already being witnessed in the IT industry. This would also mean hiring non-homogenous workforce and integrating them successfully. Challenges of managing diverse workforce Traditionally, diversity in workforce meant age distribution, sex ratio, African American and other minority groups like the Hispanics as part of the total workforce etc. Not withstanding these diversities, they were all Americans and this unity has its own influence of generating pride, belonging and responsibility and accepting inequities of the system, where present. Today’s diverse workforce has the added complexity of international workers rubbing shoulders with the locals on the one hand, and managing diverse workforces in different geographical locations. The latter category demands respect for local cultural differences in virtually all areas of personal and business aspects – food, dress code, (your last name) 9 communications, negotiations, etc. even as the overall corporate goals are pursued with a global perspective. The route to successfully managing a diverse workforce lies in successfully establishing a common ground between the corporate objectives and the aspirations of the workforce, even while adhering to the larger issues of fair play and justice. I would ensure that fair play and justice are not only corporate policies but also are perceived as such by the workforce. Corporate communications play an important role in this regard. While at the senior manager level, it is a common practice to speak and listen to one another while evolving policies, it is important that the entire workforce is also provided with an opportunity to read as well as discuss about the happenings within a company. I would ensure this two-way communication process by such means as in-house newsletters, occasional get-togethers. In addition, I will institute standing bodies for grievance redressing along with appropriate procedures, in order to balance the objective against trivial complaints. Finally, integration of the workforce into a unified but vibrant resource is important for the success of a business. This is possible by giving due respect to the diverse but broad needs of individual groups within the workforce, even while emphasizing the supremacy of the organizational goals and organizational culture as opposed to individual diversity. The secret lies in recognizing that diversity exists and that if harnessed properly, it can be a source of strength. An example of this can be seen in the aftermath of the 9/11 disaster, when the entire country rose as one man to support governmental efforts to tackle terror. (your last name) 10 Conclusion In a democratic polity, policies reflect the aspirations of the people. Governments respond to national and international opinions as well as business and political needs, to formulate public policies, bring out legislations where required to implement them, using bureaucracy. Corporate formulate policies to maximize profits even while operating within the four corners of law. Workforces being the most important resource of an organization, businesses ensure that the trends of change in the society are taken into account while managing human resources. Globalization, liberalization and information/communication technologies are the major changes influencing businesses. Workforce is now more knowledgeable about rights and opportunities. It is now more diverse than ever before since an organization’s business units may now be located across the globe and the headquarters having to unify them. The surest way to success is to harness this diversity is by respecting it and encouraging constant communications. (your last name) 11 References Ross Dawson (2008), Virtual worlds at the center of technology and society trends. Available at: as retrieved on 1 April 2008. William Jenkins (1978), Policy analysis: A political and organizational perspective, Martin Robertson, London. Available at: as retrieved on 25 March 2008. Henry Mintzberg, Robert Simons and Kunal Basu (2002), Business ethics and public policy, Sloan Review, Vol. 44, No.1, pp.67-74. Available at: as retrieved on 7 April 2008. Miyakawa T. (1999), Science of public policy: Essential readings in policy sciences II, Part 12, p.3. Reasononline, (October, 2005), Rethinking social responsibility of business, Available at: as retrieved on 30 March 2008. Read More