Over recent decades one of the principal changes in the external environment that has had a direct effect on managers has been government regulations. A list of some of the laws enacted since 1970 that have had a profound effect on how organizations can operate are results from the landmark legislation of Occupational Health and Safety Act (OSHA), Clean Air Act and Clean Water Act. These and other laws and regulations add to the external framework in which organization must operate.
Some of these regulations have been passed into law and implemented without the same type of rigorous cost and benefit analyses often associated with major decisions on the products and services an organization produces and sells. Today we face another set of challenges relating to energy supplies, food availability and environmental changes such as global warming. In recent years, we have heard proposals to suspend federal gasoline tax when gasoline prices were high and discussion of renegotiating NAFTA or other trade agreement. We also have commitments to renewable energy resources and atmospheric carbon limitation.
How should issues related to regulations in these areas of laws and proposals be understood and decided?