EME 444
Global Energy Enterprise

Organizing for Nonmarket Effectiveness

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To be effective in government arenas, firms (and other organizations) need to stay "in the know" about what's going on--trends, information, changes, priorities, people, and personalities. They must stay in close touch with the political winds around topics of concern to the organization. Baron explains how this may be done:

Firms that expect to be involved in issues addressed in government arenas must anticipate rather than simply react to developments. Consequently, they need to organize and be prepared for action. It is essential to monitor issues, and for many firms this means full-time representation in Washington and in the capitals of key states. For other firms, associations can be a cost effective means of providing intelligence, although this may not be sufficient if the firm’s interests differ from those the association represents. Most large firms also have a government affairs department that provides expertise and monitors the development of issues. A department may include lawyers, communications experts, former government officials, lobbyists, and analysts.

Washington offices serve as the eyes and ears of firms. They provide information on developing issues and are a locus of expertise about issues, institutions, and office holders. Because nonmarket issues are often episodic in nature, many firms on occasion engage the services of political consulting firms, Washington law firms, or public relations firms. Similarly, lobbyists may be hired for a specific issue. The size of a firm’s permanent staff thus is determined relative to the cost and effectiveness of outside alternatives.

Because lobbying is the centerpiece of most firms’ interactions with government, most employ lobbyists who are either political professional or experienced managers responsible for presenting the firm’s concerns to government officials. Their responsibilities typically include maintaining relationships with members of Congress, executive branch officials, and government agencies. Access is a necessary condition for lobbying, so many firms make a practice of maintaining contact with those members of Congress in whose districts they have their operations and with the committees that regularly deal with issues on the nonmarket agendas. Firms also provide training for their managers who are involved in nonmarket issues. That training often emphasizes sensitivity to the public reaction to the firm’s activities and the development of personal skills for participating effectively in government arenas.

Source: Baron, p. 239