Why good companies create bad regulatory strategies.
- Resource Type
- Article
- Authors
- Dua, Andre; Nuttall, Robin; Wilkins, Jon
- Source
- McKinsey Quarterly. 2011, Issue 3, p74-79. 6p. 2 Color Photographs, 1 Graph.
- Subject
- *GOVERNMENT regulation
*GOVERNMENT agencies
*REGULATED industries
*BEHAVIORAL economics
*BUSINESS planning
PREJUDICES
- Language
- ISSN
- 0047-5394
The article discusses why companies sometimes pursue bad regulatory strategies, and what can be done to correct that. Often a gap exists between how companies perceive themselves and how they are viewed by regulators. A bias toward excessive optimism can lead a firm to retain undue confidence in their regulatory posture. In other instances companies fail to take into account how regulators will react to their initiatives. Suggested remedies include establishing a body whose task is to formulate contrary arguments to company proposals, and regular review of emerging regulatory issues and their potential impact on the company.