Bringing Regulatory Agencies Into Organizational Studies

Abstract

The management literature has typically taken a relatively narrow view when considering the relationships between firms and state actors by conceptualizing regulatory agencies simply as a source of external pressure for firms. The literature has, accordingly, tended to emphasize the strategies that firms adopt in efforts to influence and control public policy. The authors argue that future research needs to go beyond the traditional understanding of the firm–regulator relationship and should instead focus more attention on other sources of influence on regulator behavior. Specifically, further research is needed that focuses on other external sources of influence, such as the media and public opinion, as well as research that helps identify how issues within the regulatory body itself, such as intraorganizational politics and leadership turnover, affect agency behavior. In this essay, the authors examine the National Highway Traffic Safety Administration’s (NHTSA) Office of Defects Investigation’s (ODI) actions regarding unwanted acceleration in Toyota vehicles in an effort to illustrate the dramatic influence that external events, public activism, and political power shifts have in influencing regulatory behavior. The results of this analysis support the notion that the role of firms in the regulatory process has been somewhat overstated and that future research examining the state would benefit from focusing on additional internal and external issues that may influence government agency action.