EXPERT Q&A

Government regulation remains pivotal in balancing competition and fairness in business. But how are these decisions made, and what factors define the relationship between business and government—especially in times of heightened political pressure and policy whiplash?

Norm Bishara, business law and ethics professor at University of Michigan’s Ross School of Business, discusses the complexities and realities of the relationship. 

What roles have public policy and corporate regulation played in shaping business practice?

From their earliest iterations, corporations were creations of the monarch or the state, usually to spread financial risk and accomplish some social good, like exploration and trade. In exchange, the company owed some duties to the state, like transferring value back in the form of taxes and services. 

Not surprisingly, that has become more complex as governance and business activity have grown more sophisticated. Regulation, like it or not, is still a meaningful way to maintain everything from consumer protection, public health, workplace safety, environmental protection and fair competition, alongside collecting taxes that support the infrastructure and stability in successful commercial systems.

In the current debate, perspectives differ on how much regulation is too much in terms of harming business activity, which might hamper innovation and even national security. The business-regulator relationship can range from adversarial to collaborative. Either end is arguably a healthy part of our businesses and policy environment.

How has that relationship changed over time?

There are ebbs and flows in the strength of regulation and government oversight, with an increase in that oversight coming out of crises and after public outcry. These are things like new labor protection laws addressing the ills of the Industrial Revolution or antitrust rules after huge abuses of corporate power came to light in the United States toward the end of the 19th century.

There is also a remarkable and long-lasting debate over the role of business and society and what responsibilities companies have to society beyond following the law. 

This debate has come roaring back, along with a feeling of policy whiplash. A few years ago, companies pushed ahead with policies on diversity, for example. Those efforts have retreated in response to immense political pressure and even regulatory scrutiny.

Some things have not fundamentally changed: Businesses prefer predictability in relationships with policymakers and regulators so they can make long-term strategic investments. They also want to be perceived as positive societal forces to support aspects of their employee recruiting and retention, and avoid negative attention. However, the trend is to stay in their lane and avoid unsettled social or political issues.

Are there any major shifts on the horizon? 

The push to bring manufacturing back to the United States is happening during an unprecedented rise in automation and artificial intelligence capabilities, as well as energy usage demands. This will affect the nature of work and skills needed for employees to stay relevant and successful. 

There will be new jobs we can’t predict, but also social upheaval and job loss. I’m interested in how this future of work is going to play out for employees and what companies and governments can do together to ease this transition and ensure some balance between business interests and innovation, and fairness for workers. 

What role can public-private partnerships play in tackling business and public policy challenges today? 

It’s widely accepted that the government should be more efficient and learn from the private sector, but also a growing awareness that sometimes the government’s goals can’t be judged by the yardstick of business efficiency. For instance, I question whether most Americans will embrace the privatization of the U.S. Postal Service or cuts to government health care when they personally experience the changes.

What role does transparency play in building trust between businesses and the local or federal government? 

Transparency is a prerequisite to good governance and decision making, but it’s not the end of the effort. The immense pressure of government workers and agencies we are seeing at this moment can’t change the reality that it takes time to identify the policy pain points and the best solutions, rather than rushing into changes that might have some negative impacts that are not appreciated at first. 

These changes could hurt individuals and cause havoc that’s hard to reverse. Businesses can demand the bureaucracy stays above politics and produces reliable data. For example, companies rely on apolitical research from the Bureau of Labor Statistics and Congressional Budget Office.

You serve as the faculty director of the Carson Scholars program. What are some key insights students gain from their interactions with policymakers and business leaders?

For nearly 20 years, the program’s goal has been to educate students on navigating the public policy process. If they understand the system and levers businesses have, they can effectively engage and achieve a competitive advantage. 

The opposite is also true: If companies don’t engage, they risk being subjected to policies that are bad for their business. This insight is part of the DNA of the program, designed by Ross School of Business alumnus David Carson and founding faculty director George Siedel. It’s about understanding good policy and not getting bogged down in the politics of any given moment.

Students come away with an accurate sense of how business and government should work together—and how they often fail—to achieve business and social aims. They get a detailed background on campus and see how Washington functions by interacting closely with policy makers, including lawmakers, regulators, lobbyists, think tank experts and a range of policy advocates. 

The program will evolve in the coming years to adapt to some funding changes, but the core experience of getting immersed in D.C. has to remain.