Why does business fear sudden changes in government policies?

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stolperia | (Level 1) Educator Emeritus

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Governmental policies often shape the way in which businesses obtain resources, manufacture goods, and sell products or services to consumers. Because of this, changes in governmental policies can have far-reaching impacts upon the activities and profits of business organizations.

Consider one example situation: The Occupational Safety and Health Administration (OSHA) sets guidelines that carry the force of law in establishing expectations that businesses must meet to protect their employees while at work. One illustration of this is regulation 1926.100 for head protection, which reads:


Employees working in areas where there is a possible danger of head injury from impact, or from falling or flying objects, or from electrical shock and burns, shall be protected by protective helmets.



Helmets for the protection of employees against impact and penetration of falling and flying objects shall meet the specifications contained in American National Standards Institute, Z89.1-1969, Safety Requirements for Industrial Head Protection.



Helmets for the head protection of employees exposed to high voltage electrical shock and burns shall meet the specifications contained in American National Standards Institute, Z89.2-1971.

If research and tests were to show that a newly developed material or configuration of helmet was more effective in providing protection of workers at risk for head injuries, the regulations would be revised to reflect this improved standard. Businesses would then be required to spend time, effort, and money informing their employees of the new standard(s) and would need to purchase the improved protective equipment for their workers or reimburse workers who purchased the equipment personally. Businesses that did not meet the requirements of the new regulation after the published transition date could be fined or otherwise punished for not following the law set out by the regulation.

In the same way, changes in governmental policies can impact the methods used to obtain natural resources, can radically change the public's perception of the safety of products offered for sale by businesses, and can force businesses to alter or abandon practices that become economically prohibitive due to changed policies.



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