19

Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

  • View
    219

  • Download
    0

Embed Size (px)

Citation preview

Page 1: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics
Page 2: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Influencing the Political Influencing the Political EnvironmentEnvironment

Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics Levels of Political Involvement Campaign Finance Reform: A Special Issue Business Political Action—A Global Challenge

ChapterChapter

9

Page 3: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

The arguments for and against political The arguments for and against political involvement by businessinvolvement by business

Why Business Should Be Involved

A pluralistic system invites many participants.

Economic stakes are high for firms.

Business counterbalances other social interests.

Business is a vital stakeholder of government.

Why Business Should Not Be Involved

Managers are not qualified to engage in political debate.

Business is too big, too powerful.

Business is too selfish to care about the common good.

Business risks its credibility by engaging in partisan politics.

Figure 9.1

Page 4: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Corporate political strategyCorporate political strategy

Corporate political strategyInvolves the activities taken by organizations to acquire, develop, and use power to obtain an advantage.

Three strategic types1. Information strategy: where businesses seek to provide

government policymakers with information to influence their actions.

2. Financial-incentives strategy: where businesses provide incentives to influence government policymakers to act in a certain way.

3. Constituency-building strategy: where businesses seek to gain from other affected organizations to better influence government policymakers to act in a way that helps them.

Page 5: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Political strategies, tactics, and characteristics: Political strategies, tactics, and characteristics: Information strategyInformation strategy

Tactics Lobbying Direct communication Expert witness testimony

Characteristics Targets government policymakers by providing information.

Figure 9.2a

Source: Adapted from Amy J. Hillman and Michael A. Hitt, “Corporate Political Strategy Formulation: A Model Approach, Participation, and Strategy Decisions,” Academy of Management Review, 24 (1999), Table 1, p. 835.

Page 6: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Political strategies, tactics, and characteristics: Political strategies, tactics, and characteristics: Financial-incentive strategyFinancial-incentive strategy

Tactics Political contributions Economic leverage Political consulting aid Office personnel

Characteristics Targets government policymakers by providing financial

incentives.

Figure 9.2b

Source: Adapted from Amy J. Hillman and Michael A. Hitt, “Corporate Political Strategy Formulation: A Model Approach, Participation, and Strategy Decisions,” Academy of Management Review, 24 (1999), Table 1, p. 835.

Page 7: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Political strategies, tactics, and characteristics: Political strategies, tactics, and characteristics: Constituency-building strategyConstituency-building strategy

Tactics Stakeholder coalitions Advocacy advertising Public relations Legal challenges

Characteristics Targets government policymakers by providing information

Figure 9.2c

Source: Adapted from Amy J. Hillman and Michael A. Hitt, “Corporate Political Strategy Formulation: A Model Approach, Participation, and Strategy Decisions,”Academy of Management Review, 24 (1999), Table 1, p. 835.

Page 8: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Political action tacticsPolitical action tactics

Lobbying 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.

Direct communications with policymakers Businesses often participate in activities that will improve

government officials’ understanding of management and employee concerns.

Expert witness testimony Businesses may want to provide facts, anecdotes, or data to educate

or influence government leaders through public congressional hearings.

Page 9: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

The Business RoundtableThe Business Roundtable

One of the most effective organizations for promoting direct communication between business and policymakers.

It is an organization of CEOs of leading corporations. It studies various public policy issues and advocates for laws it

believes foster vigorous economic growth and a dynamic global economy.

Considers issues like corporate governance, education, health care, and civil justice reform.

Page 10: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Top 15 business lobbyist expenditures for 2000Top 15 business lobbyist expenditures for 2000

Figure 9.3a

General Electric $16,020,000

Edison Electric 12,000,000

Philip Morris 11,270,000

Lockheed Martin 9,740,000

Ford Motor 8,008,000

Boeing 7,820,000

AT&T 7,400,000

Schering 7,320,000

SBC Communications 7,208,000

Exxon Mobil 7,077,963

Fannie Mae 7,000,000

Northrup Grumman 6,882,720

Sprint 6,720,000

Microsoft 6,360,000

Verizon Communications 6,360,000

Page 11: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Top 10 association lobbyist expendituresTop 10 association lobbyist expenditures for 2000 for 2000

Figure 9.3b

U.S. Chamber of Commerce $24,881,660

Business Roundtable 21,480,000

Seniors Coalition 9,022,096

National Association of Realtors 8,920,000

Association of American Railroads 8,760,160

American Council of Life Insurance 7,712,090

Pharmaceutical Researchers & Manufacturers of America 7,480,000

Health Insurance Association of America 6,860,000

National Committee for Preserving Social Security 6,740,000

Security Industry Association 6,564,586

Source: Compiled from the Lobbyist Database, Center for Responsive Politics. www.opensecrets.org/lobbyists

Page 12: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Promoting a financial-incentive strategyPromoting a financial-incentive strategy

Political action committees

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

Economic leverage

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

Page 13: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Political action committee activityPolitical action committee activityFigure 9.4

050010001500200025003000350040004500

1974 1979 1984 1989 1994 1999 2003

Corporate Labor Trade/membership/health Non-connected

Nu

mbe

r of

PA

Cs

Page 14: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Promoting a constituency-building strategyPromoting a constituency-building strategy

Stakeholder coalitions Businesses try to influence politics by mobilizing various

organizational stakeholders to support its political agenda.Advocacy advertising Advertisements that focus on a company’s views on controversial

political issues.Public relations and trade associations Businesses may include a politically charged comment in a

speech given by a senior company executive or even run a well-funded, long-running public relations campaign.

Legal challenges Business seeks to overturn a law after it has been passed.

Page 15: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Levels of business political involvementLevels of business political involvement

Level 3: Aggressive Organizational Involvement Executive participation Involvement with industry working groups and task forces Public policy development

Level 2: Moderate Organizational Involvement Organizational lobbyist Employee grassroots involvement Stockholders and customers encouraged to become involved

Level 1: Limited Organizational Involvement Contribution to political action committee Support of a trade association or industry activities

Figure 9.5

Page 16: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Campaign finance reformCampaign finance reform

Soft money

Unlimited contributions to the national political parties by individuals or organizations for party-building activities.

Page 17: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Top soft money contributors to both Top soft money contributors to both political parties, 2001-2002 political parties, 2001-2002

Figure 9.6

Donor Total Contribution

Given to Democrats

Given to Republicans

Freddie Mac $3,355,615 $1,750,000 $1,605,615

AT&T 3,330,961 1,564,250 1,766,711

Philip Morris 2,872,752 621,560 2,251,192

Microsoft 2,719,906 852,343 1,867,563

Ameriquest Capital 2,546,000 1,546,000 1,000,000

Archer Daniels Midland 2,041,500 901,500 1,140,000

Citigroup 1,884,397 653,820 1,230,577

American International Group 1,823,250 621,900 1,201,350

Anheuser-Busch 1,767,816 726,914 1,040,902

Global Crossing 1,634,954 1,280,500 354,454

Source: www.opensecrets.org/news/campaignfinancing.

Page 18: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Top soft money overall donors, 2001-2002Top soft money overall donors, 2001-2002

Donor Total Contribution

Given to Democrats

Given to Republicans

Haim Saban, chair, Saban Entertainment $9,252,936 $9,252,936 $0

American Federation of State, County, & Municipal Employees

7,484,000 7,483,500 500

Fred Eychaner, president, Newsweb Co. 7,387,936 7,387,936 0

Stephen L. Bing, producer, Shangri-La Entertainment 7,075,936 7,075,936 0

Service Employees International Union 4,914,240 4,872,618 41,622

Communications Workers of America 4,028,150 4,028,150 0

United Brotherhood of Carpenters & Joiners 3,946,209 3,926,209 20,000

American Financial Group 3,503,108 125,000 3,378,108

American Federation of Teachers 3,422,150 3,412,150 10,000

Pharmaceutical Research & Manufacturers Association

3,392,087 143,000 3,249,087

Figure 9.7

Page 19: Influencing the Political Environment Participants in the Political Environment Influencing the Business-Government Relationship Political Action Tactics

Campaign financing reform abroadCampaign financing reform abroad

Limits on expenditures Contribution limits Disclosure regulations Bans against certain types of contribution Bans against certain types of expenditures Measures designed to encourage donations Subsidies in-kind Public subsidies