Leadership: Leaders, Followers, Environments

External checks—government agencies

Government and quasi-governmental agencies externally regulate U.S. organizations. They represent another potentially powerful check and balance, as described in Chapter 6. There are three factors that affect the effectiveness of the media and government agencies: the nature and speed of changes; the fractured nature of government regulations; and the adequacy of budgetary support and resources.

Technology and product innovation have created challenges for the watchdogs. The Internet and weblogs (or “blogs”) have placed tremendous pressure on newspapers and television news. In the financial world, new products such as derivatives and credit default swaps, and increased speed in the movement of financial products within and across national boundaries, have caused headaches for regulators. Many regulators did not appreciate the speed of change and complexity of new products.⁹³ In addition, agencies point to insufficient funding and authority to accomplish their missions (although conservative critics might argue that government agencies are naturally ineffective and unnecessary).