FALL 2023 3 “In general, I think people have this assumption that government and business are relatively independent,” says Chad Meyerhoefer, who holds the Arthur F. Searing Professorship and is chair of the department of economics at Lehigh Business. “But they’re more intertwined than is widely known.” Alberto Lamadrid, an associate professor who holds the James T. Kane Faculty Fellowship in the economics department at Lehigh Business, agrees. Lamadrid co-teaches a “Government and Society” course in the MBA program and starts the course by asking students to think of a typical day. “From the moment you wake up in the morning, until you go to work, there is so much regulation embedded in your life that you don’t realize,” Lamadrid says. “If you use an alarm clock, it no longer contains noxious metals, as was the case with previous electronics,” he says. “The language you hear on the radio is regulated by the Federal Communications Commission. The nutrition facts label on the coffee you brew and food you eat for breakfast are required by the federal Food and Drug Administration.” Lamadrid continues, “If you drive to work, the roads and bridges you travel on were funded by governments, as were the traffic lights that keep chaos at bay and govern which vehicles have the right to cross an intersection and when. The car you drive must meet certain federal safety standards. Once you arrive at work, health and safety standards that have been set by the Occupational Safety and Health Administration must be adhered to, so the workplace is safe for employees.” As ubiquitous as these moments of intertwining government and business appear in the United States, there are often complaints that government regulation stifles innovation. “In business, everybody has this initial reaction that intervention by the government is bad, because it slows business operations down,” says Steven Savino, a professor of practice in marketing at Lehigh Business. Savino worked in senior leadership positions for multiple, multinational firms during his 25 years as a professional marketer. “There’s some truth to that,” he says. “But at the same time, business and government are interdependent because businesses need government action for a number of things that complement the organization’s go-to-market plans.” Infrastructure, for one, Savino says. Also, business needs the government, “to make sure there are fair practices across whatever industry we’re competing in. That way, companies within our industry don’t cheat.” Government also has the responsibility to set regulations that protect health and safety, he adds. On the other side, the govern- ment needs business, “for job creation and to stimulate economic activity,” says Savino. “The more economic activity you stimulate, you create greater wealth, and the more wealth you create, the more you solidify a viable, robust middle class.” Here are just a few areas and approaches that help illustrate the countless ways that government and business can forge successful partnerships that are not only mutually beneficial, but also contribute to the greater good of society. Government Regulation As a former deputy chief economist at the Securities and Exchange Commission (SEC) and, prior to that, senior economist at the Board of Governors of the Federal Reserve System, Kathleen Hanley has a deep understanding of government regulation. “I don’t think that every government regulator is an expert in the business that they’re trying to regulate, so information needs to flow in both Illustrations by MIRKO CRESTA Story by JACK CROFT Interdependency Between Government and Business Whether it’s trains, planes and automobiles; telecommunications; banks and the stock market; health care; clean air; education; energy, water and wastewater; beauty parlors and barbershops; or restaurants—it’s hard to think of a business that is not somehow linked to federal, state and/or local government through oversight, regulation, taxation or public-private partnerships.
RkJQdWJsaXNoZXIy MTA0OTQ5OA==