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The new administration
As the election season draws to a close, it has become clear that we will experience a change in our nation’s government. Many companies’ fortunes are closely tied to government activities and may depend on who is in power. These companies may be nervous about the new administration and may have questions about how they can manage their risk appropriately in this changing environment.
Anthony Munchak, a corporate investment management specialist and CFA charterholder, explains how companies can adapt to a new political environment and the steps they should take to solidify their business’s position with regard to the new administration.
Rather than viewing a change in administration as an obstacle, think of it as an opportunity to position your company differently. The new administration may bring in legislative changes that benefit your business. If not, you can adapt your business model to square with the new normal.
Instead of resisting change, businesses will be able to save time and money by keeping in step with new laws and regulations. Companies may need to adapt their workflow and their internal policies in order to keep up with these regulatory changes.
It is possible that taking a fresh look at how your company does business can bring positive results. You will learn to operate more efficiently and will be able to respond with more agile methods in the future if you cut out unproductive activities now. The more your company adapts to the evolving landscape, the better it will be at navigating turbulent periods.
Employees in certain industries like oil and gas might be nervous that the regulatory changes coming with the new administration may cause a downturn in business. It is best to keep employees fully up-to-date with all pertinent changes since they are the ones who implement new rules day-to-day.
Businesses experiencing government changes should ensure that their employees have the resources and information necessary to do their jobs. They will need to know how the new regulations will change their work and what they need to do in order to make the change successful. Communicating clearly and educating employees can equip them for legislative changes and prepare them for the new ways in which they will be asked to operate.
Finding the Right Partners
Excellent legal counsel is necessary at all times, but particularly during times of regulatory change. A good corporate attorney will be able to foresee changes in the business landscape and tell you and your employees how you should compensate for them. This is especially true of regulatory issues and other legal compliance issues that may occur.
Legal counsel is the first line of defense, but you can also look toward other experts. Hiring industry and market analysts is a good place to start. New technology partners can help to ease the transition as well. When you have the right partners, you will be able to compensate for any differences in the political and regulatory landscape.
Getting to Know Your New Representatives
Business leaders need to remember that their elected officials have a vested interest in whether they do well. It is in elected officials’ best interest to see your company succeed because this will bring more jobs and better tax revenues to your city or state.
Get to know your new government representatives and let them know what your company’s priorities are and how you believe you can contribute to the common good. If you make a strong case for your company, the new government representatives will be more likely to fight for your company if necessary.
The new administration has vastly different priorities than the outgoing administration. The outgoing administration was concerned with removing regulations that they believed hampered business growth, such as certain overbearing environmental laws.
If your company was affected by these rules’ changes, you may be unhappy that the new administration will likely roll them back. Your company needs to be able to shift its priorities along with those of the government and work with the system rather than against it.
Another priority of the incoming administration is making the playing field more equal for wealthy and non-wealthy individuals. This may mean raising taxes on wealthy individuals and corporations in order to give lower-income entities a break. Companies should familiarize themselves with new tax laws as much as possible and move to make themselves less vulnerable to change.
Social responsibility is another area in which the new administration intends to make changes. Many companies believe that they should not be involved with social responsibility, but this can improve a company’s branding as well as making customers loyal. Adopting a “kinder and gentler” corporate culture may be a good way to conform to the changing standards of the new government.
Many businesses are nervous about how the economy will fare under the new administration. The previous administration presided over four years of largely positive results until the arrival of the coronavirus pandemic. Raising taxes and increasing government benefits could have the effect of depressing business growth.
The best way to deal with this rising problem is to meet it head-on. Companies should focus on how they can save money and invest it wisely to prepare for any possible hard times. Ignoring the new government and its potential effects on your business is not a wise move.
Adapting to Change
Successful companies will always adapt to a changing political and regulatory climate. Business cycles and administrations may come and go, but your company is in it for the long haul. Allowing your company to become too entrenched in the policies of one side or another can hinder growth.
Anthony Munchak believes that companies should look forward to the new administration with cautious optimism and hope that the economy will turn around in the coming year.
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