- Shaffer, Brian “Firm-Level Responses to Government Regulation: Theoretical and Research Approaches” Journal of Management. 21.3 (1995). 495-514. Web. 10 Nov. 2014
- History of Search: Used key terms of “Government policy on Corporations”. I used the source because it gives a detailed explanation of how corporations deal with regulations and the relationship between the government and firms. Article hosted on web.a.ebscohost.com
- Identification: Scholarly source. Source is scholarly due to its multiple citations and works cited page, it is a peer review journal, has an abstract at the beginning, large amounts of evidence used to support what the author says.
The government and corporations live in a interdependent relationship with each other within the economy. The two have separate roles to fulfill. The government regulates the market and the corporations attempt to make a profit in the market while abiding to government regulations. The idea portrayed by Shaffer in his article reveals that corporations do not simply just abide by the regulations. He believes that corporations have the power to side step government regulations through means of adaptation and influencing legislation to their own benefit.
Corporations/ firms express politcal interest in legislation on the economy today. They pursue their interests through methods such as lobbying and forming Political Action Committees (PAC). Firms can use their powerful influence to refine the policy being passed to fit their own agenda. For example, a large electronics manufacturer can lobby for passing a tax to raise the price of electronics on the market. This benefits the corporation because it allows them to raise the price of their products to create a larger process. Wealthy firms that have political influence can use legislation as a way to improve their competitive position in the market with such a move.
Shaffer mentions a second method used by firms to counter government regulations. The strange part of this move is that it really isn’t countering anything, it is actually abiding by it. The method is called adaptation. Large companies can “adapt” to new regulations by shifting structure within itself to meet regulation requirements. A move such as this sort of shoot out the idea that the government regulations have little effect on large corporations at-least. I assume this because large companies are not actually being stifled by such regulations more that the regulations act as a nuisance to them. The government also seems to be like being controlled partly by firms economically speaking.