Supply Chain

Regulation and the Revolving Door

April 4, 2011

The current nuclear crisis in Japan is just the most recent example of a critical force shaping business today: the relationship between government regulation and its revolving door.

As we have starkly seen over the past decade, the effectiveness of government regulatory bodies is frequently compromised by the inflow and outflow of “interested” people who are connected to the industries that are being regulated.

Simply put, regulating bodies and the industries they are supposed to monitor are often made up of the same folks.

From the marginalization of the FAA as the overseer of aviation security prior to 9/11; to Congress and the SEC blocking any oversight of the derivatives market; to the massive oil spill in the Gulf of Mexico, one common theme is present: regulators, who previously had worked for the same industry, turned a blind eye when confronted with uncomfortable decisions which may have hurt that industry.

In the end, the public good was exponentially harmed, while a select few benefited and no one was ever held to account.

The patriot Thomas Paine in his classic Common Sense warned Americans to be wary of “interested men who should not be trusted”. For those of us who play by the rules, we would be wise to heed this advice today.

About the Author

Andrew R. Thomas Blog | Associate Professor of Marketing and International Business

Andrew R. Thomas, Ph.D., is associate professor of marketing and international business at the University of Akron; and, a member of the core faculty at the International School of Management in Paris, France.

He is a bestselling business author/editor, whose 23 books include, most recently, American Shale Energy and the Global Economy: Business and Geopolitical Implications of the Fracking Revolution, The Customer Trap: How to Avoid the Biggest Mistake in Business, Global Supply Chain Security, The Final Journey of the Saturn V, and Soft Landing: Airline Industry Strategy, Service and Safety.

His book The Distribution Trap was awarded the Berry-American Marketing Association Prize for the Best Marketing Book of 2010. Another work, Direct Marketing in Action, was a finalist for the same award in 2008.

Andrew is founding editor-in-chief of the Journal of Transportation Security and a regularly featured analyst for media outlets around the world.

He has traveled to and conducted business in 120 countries on all seven continents.