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Role of Protective Legislation for Corporate Success

management. organizing, entrepreneurship, legislation, organizational environments, consensus in firms

Consensus refers to the degree to which an organization's claim to a specific activity is recognized or disputed by other organizations. Favorable recognition of an organization's activities by other organizations suggests that consensus exists. When the activity is disputed, however, the environment is in a state of dissensus. The very nature of private enterprise involves dissensus, as profit-oriented organizations in competition are engaged in contesting one another's right to participate. However, many business firms do seek to achieve consensus by encouraging protective legislation such as import quotas, tariffs, and licensing.

In the nonprofit sector, many social service agencies, such as Planned Parenthood, seek support for their activities by offering a unique service to the community. Consensus occurs when other organizations recognize the need for such service and are willing to provide support to aid the agency in achieving its goals. Indeed, in many communities, United Way serves as a major determinant of consensus simply by selecting an agency to receive funds and discouraging other agencies from providing duplicate services.

Each of the environmental dimensions addresses how factors can be organized and located in respect to the organization. Managers need to understand not only where an organization is located on each dimension, but the direction in which the organization is moving along the dimension. For instance, an organization in a rich environment benefits from plentiful supplies of resources. Managers, however, must recognize that if the environment shifts to a lean environment because of increased competition, adjustments in organization activities will have to be made.
Published: 2007-05-12
Author: Martin Hahn

About the author or the publisher
Martin Hahn PhD has received his education and degrees in Europe in organizational/industrial sociology. He grew up in South-East Asia and moved to Europe to get his tertiary education and gain experience in the fields of scientific research, radio journalism, and management consulting.

After living in Europe for 12 years, he moved to South-East again and has worked for the last 12 years as a management consultant, university lecturer, corporate trainer, and international school administrator

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