Intervention by Outsiders: A Strategic Management Perspective on Government Industrial Policy

Romano Dyerson and Frank Mueller

Journal of Public Policy, 1993, vol. 13, issue 1, 69-88

Abstract: As the debate throughout the eighties has concluded, the efforts of governments to intervene at the firm level has largely been disappointing. Using two examples drawn from the British experience, Rover and Inmos, this paper offers an analysis as to why the Government has encountered difficulties when it has sought to intervene in a strategic fashion. Essentially, public policy makers lack adequate mechanisms to intervene effectively in technology-based companies. Locked out of the knowledge base of the firm, inappropriate financial control is imposed which reinforces the ‘outsider’ status of the Government. Having addressed the limitations of strategic intervention, the paper, drawing on the comparative experience of other countries, then goes on to address how this policy boundary might be pushed back in the long term.

Date: 1993
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