By: Stacey M. Jenkins

Administrative & Regulatory Practice Area

Overview

Whether you?re talking about the local convenience store or a Fortune 500 corporation, all businesses are impacted by government regulation. Government regulations represent the codification of legislation passed by federal, state and local governing bodies. Promulgation and enforcement of regulations are duties delegated to a variety of agencies. For example, the U.S. Congress passes various tax legislation but it is the Internal Revenue Service that is charged with the responsibility of assimilating new legislation into the Internal Revenue Code and ensuring compliance by taxpayers.

Navigating the massive "sea" of regulation is a daunting task for any business regardless of its size. For example, a small company is generally subjected to fewer regulations; however, it has fewer resources at its disposal for impacting the regulatory process and meeting the requisite compliance measures. On the other hand, a large multinational corporation has greater resources available but face a far broader array of regulations.

All businesses face a common question: how to effectively manage the regulatory process? Effective management of the regulatory process is required to avoid the threat of "being regulated out of existence". Additionally, effective management of the regulatory process is required to capitalize on the opportunities created by regulation. Hence, regulation need not be viewed solely as a threat to corporate survival; with effective management, regulation can represent one of the greatest sources of opportunity for corporations.

Strategic Planning as an Effective Management Tool

Strategic planning is the continuous process of systematically evaluating the nature of the business, defining its long-term objectives, identifying quantifiable goals, developing strategies to reach these objectives and goals and allocating resources to carry out these strategies. Strategic planning begins by addressing the following three questions:

• Where are we today?
• Where are we going?
• How do we get there?

Where are we today?

The first step in strategic planning is situation analysis which includes a thorough review of all internal, external, and competitive factors a particular business faces. Situation analysis includes analytical techniques to help businesses:

• analyze their industry as a whole
• predict the industry?s future evolution
• understand their competitors
• understand their own position
• translate their analysis into a competitive strategy

Where are we going?

The second step of strategic planning focuses on the direction of the corporation and its various business units. The primary objective during this phase is to ensure that the general corporate direction is in sync with the corporate mission statement and that long-term objectives and measurable goals match the direction of various business units.

How do we get there?

Strategy formulation must be based on a thorough understanding of the market, competition, and the external environment regardless of the planning approach adopted. Effective strategy formulation must initially have a corporate level focus that in turn will flow to the business unit level and ultimately to the functional level.

Summary

Regulation and competition are the greatest external factors influencing the success or failure of a business. The impact of these two factors is compounded by the current trend towards deregulation of many industries and the effect such deregulation has on market competition. Business leaders need not view this trend as a threat to their existence; on the contrary, using strategic planning to effectively manage the regulatory process can improve decision-making and thereby provide businesses with an opportunity to gain a competitive advantage.

The information for this article was received from independent research on the part of the author. All information is based solely upon the law of the State of Georgia and does not apply to any matter outside of Georgia. This article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The law is constantly changing, additional facts or future developments may affect subjects contained herein and no guarantee is given that the information provided is correct, complete, or up-to-date. Seek the advice of professional counsel before acting or relying upon any article, form or information in this web site.