Michael Porter found that government regulation, traditionally seen by corporate managers as an intrusion on their decision-making, can stimulate changes in organizational behavior that provide a competitive advantage. In Porter’s words, “standards for product performance, product safety, and environmental impact contribute to creating and upgrading competitive advantage. They pressure firms to improve quality, upgrade technology, and provide features in areas of important customer (and social) concern.” (Porter, M. E. . The Competitive Advantage of Nations. London: MacMillan, p. 647). Porter's idea that an organization can gain competitive advantage from successful relationships with competitors and governments can be extended to relationships with other stakeholder publics.
For example, a corporation that successfully solves its environmental problems, usually when pressured by environmental activists, will gain an advantage in the resulting positive relationships with stockholders, consumers, employees, government, and communities that have the ability to support or constrain that corporation. Likewise, a government agency that responds well to pressures from its constituents will be more likely to gain support from those publics as it competes for limited public funding.