Lecture Business and society: Stakeholders, ethics, public policy (14/e): Chapter 9 - Anne Lawrence, James Weber

Chapter 9 - Influencing the political environment. The purpose of this chapter is: Understanding the arguments for and against business participation in the political process, knowing the types of corporate political strategies and the influences on an organization’s development of a particular strategy, assessing the tactics businesses can use to be involved in the political process, examining the role of the public affairs department and its staff, recognizing the challenges business faces in managing business–government relations in different countries.

Influencing the Political

Environment

Ch 9: Key Learning Objectives

participation in the political process

influences on an organization’s development of a

particular strategy

the political process

staff

business–government relations in different countries

The Arguments for and against Political Involvement

by Business

Figure 9.1

Business as a Political Participant

in the political process as vital to the progress (and

possibly survival) of their company

influence:

 88% of public polled felt business had too much political power

 87% felt political action committees (a favorite business

political tactic) were too powerful

 At the same time only 5% of respondents felt small business

had too power in the political environment

Stakeholder Groups in Politics

varied concerns and populations, have a voice in

politics and the public policy process

 AFL-CIO (a federation of unions) and the Teamster Union have formed political action committees to influence

electoral races and legislation

 Diverse business organizations and interest groups band together in support or opposition to a specific legislative or regulatory initiative

Influencing the Business-Government Relationship

participate in the political process

 Stakes are too high for business not to be involved

 Government acts on issues that affect basic operations of

companies

Strategy

 Involves the activities taken by organizations to acquire, develop,

and use power to obtain an advantage

Types of Corporate Political Strategy

 Information strategy

• Businesses seek to provide government policymakers with information to influence their actions

 Financial-incentives strategy

• Businesses provide incentives to influence government policymakers to act in a certain way

 Constituency-building strategy

• Businesses seek to gain from other affected organizations to better influence government policymakers to act in a way that helps them

Business Strategies for Influencing Government

Figure 9.2

Promoting an Information Strategy

 Lobbyists communicate with and try to persuade others to

support an organization’s interest or stake as they consider a particular law, policy, or regulation

• Revolving door: when businesses hire former government officials as lobbyists and political advisors

 Businesses invite officials to participate in activities that will

improve government officials’ understanding of management and employee concerns

 Businesses provide facts, anecdotes, or data to educate or

influence government leaders at public forums like congressional hearings

Total Federal Lobbying Spending and Number of Lobbyists (1998 – 2011)

Figure 9.3

The Business Roundtable

direct communication between business and

policymakers

for laws it believes foster vigorous economic growth

and a dynamic global economy

education, health care, and civil justice reform

Promoting a Financial Incentive

Strategy

 Independently incorporated organizations that can solicit contributions and then channel those funds to candidates seeking political office

 Occurs when a business uses its economic power to threaten to leave a city, state, or country unless a desired political action is taken

Political Action Committee Activity

Figure 9.5

Promoting a Constituency Building

Strategy

 Businesses try to influence politics by mobilizing various

organizational stakeholders to support its political agenda

 Advertisements that focus on a company’s views on

controversial political issues

 Coalitions of companies in the same or related industries

used to coordinate businesses’ grassroots mobilization

campaigns

Levels of Business Political Involvement

Figure 9.5

Managing the Political Environment

the firm’s interactions with governments at all levels and

to promote the firm’s interests in the political process

public affairs officers and departments involve a political

action tactic

percent, sit on the corporation’s strategic planning

committee

Business Political Action: A Global

Challenge

and restrictions on business involvement in the political

processes in other countries

participation in the political environment, campaign

financing, and maintaining a fair ethical climate

throughout the public policy process

countries

Business Political Action Abroad

 Questionable actions by individuals employed at lobbying

firms prompted government to close offices

 Major actors like big business, agriculture, and labor

participate in the public policy process

 Candidates offered their competitors huge sums to withdraw

from the race