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Government from time to time feels that it is necessary to enact legislation that will protect the citizens from unscrupulous companies. They do this because citizens are often not educated with the basics of the products they purchase (i.e. life insurance) and can easily be taken advantage of by others. Before the government does enact new legislation they typically go through five steps. These 5 steps are common in nearly all new legislation. Businesses should understand these steps in order to understand what current actions they may be doing will become law at sometime in the future. Operations and company strategies are often affected by the will of the people and the will of the government. Issue Identification: The issue moves into the public eye when enough people have been taken advantage of. Let us use the example of life insurance. Assuming that many sales people have been replacing perfectly good life insurance policies of their clients with worthless ones. As people become aware of these issues it becomes reported in the news, on the internet and in various groups. Interest Groups: Once the news of the abuse hits the head lights of public awareness groups begin to form that help to raise awareness even more. They campaign government, contact politicians and run advertisements. Eventually, if enough people are concerned about the problem government will take notice. Legislation: After enough pressure has been built and politicians are forced to act the government might get around to passing new legislation. In order to get a passing vote the issue needs to be widely known and have some political liability for politicians. If no one has heard of the issue it is doubtful that it will pass. Administration: The government needs to recruit new personnel and develop an agency. The design of this agency, the facilities, the people, the equipment, etc. all needs to be planned and developed. This takes a considerable amount of time and resources so companies have the ability to adjust themselves to become adherent to the law before any people are available to enforce it. Enforcement: This is the tricky part. Government can pass the laws and put people in place but they must be able to enforce the law. This is often done through other agencies like the police, the IRS or by certifying inspectors. Many times the government doesn’t even plan nor have the resources to catch all of the violators but only enough to deter others. Murad Ali, a two-time published author, writes articles and offers advertisement space for businesses. Visit http://www.thenewbusinessworld.blogspot.com
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