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First, I'll have to ask you to pardon my ignorance on the topic of managing, having stumbled upon this podcast by accident (found a few interesting podcasts on interviewing and resumes). Nonetheless, it is turning out to be a fascinating topic.

My question is more of a general nature. How do managers and corporate managers in particular cope with ever changing (and I'd guess, ever tougher) regulatory and taxation environments?

Whereas the market evolves in sometimes unpredictable patterns, there is always an ultimate logic and purpose (provided by the profit motive), under voluntary interactions. But political action is decidedly one-sided and seemingly less predictable.

Thank you and I'm looking forward for your feedback.

Adrian

Mark's picture

Adrian-

Generally speaking, corporate managers address tax and regulatory issues in 3 ways:

1 - They lobby the government to influence the laws as best they can. This ranges from specific companies getting specific breaks (I find this objectionable, but it's allowed)

2 - They consider future regulatory and tax disincentives in their financial planning and are generally conservative to allow for them. This is not reported, of course - only companies that get in trouble are in the news. But the vast majority are quite conservative.

3 - They have lawyers and regulatory specialists advising on how to stay legal and how to bend the rules without breaking them.

Hope that helps!

Mark

adi11235's picture

Thanks for the feedback!

But what do you mean by "conservative"? Conservative about regulations in general, or conservative in their lobbying efforts?

I was also wondering what the ratio of defensive vs. offensive lobbying is. By "defensive" I mean actions to protect themselves from regulations, offensive meaning rules that would, shall we say... inconvenience the competition. I would posit that the latter avenue is rather rarely used and possibly by larger corps (thinking that lobbying itself is expensive and there is the possibility of retaliation).

There sure is a lot of propaganda regarding these issues. I was wondering if you could share some experience, if you have it.

Adrian

Mark's picture

Adrian-

At this point, I'm not really sure what this has to do with managing.

Mark