Research on corporate political activity has considered a number of antecedents to a firm’s engagement in politics. The majority of this research has focused on either industry or firm-level motivations that lead to corporate political activity, leaving the role of the firm’s leader noticeably absent in such scholarship. This article combines ideas from Upper Echelons Theory with research in corporate political activity to bridge this important gap. More specifically, this research utilizes CEO demographic characteristics to determine whether a firm will (...) invest in political activity and how these characteristics influence the particular approach to political activity the firm undertakes. Considering 27 years of data from large U.S. firms, we find that a CEO’s age, tenure, functional, and educational backgrounds influence whether and how the firm invests in political activity. (shrink)

“Responsible lobbying” is an increasingly salient topic within business and management. We make a contribution to the literature on “responsible lobbying” in three ways. First, we provide novel definitions and, thereby, make a clear distinction between lobbying and corporate political activity. We then define responsible lobbying with respect to its content, process, organization, and environment, resulting in a typology of responsible lobbying, a conceptual model that informs the rest of the paper. Second, the paper provides a thematic overview of the (...) current literature underpinning lobbying and the responsible firm, and the underlying paradigms informing this literature. Third, the paper makes specific suggestions for a future research agenda, ending with a consideration of methodological implications of such research. (shrink)

Multinational companies (MNCs) frequently adopt corporate social responsibility (CSR) activities that are aimed at providing ‘public goods’ and influencing the government in policymaking. Such political CSR (PCSR) activities have been determined to increase MNCs’ socio-political legitimacy and to be useful in building relationships with the state and other key external stakeholders. Although research on MNCs’ PCSR within the context of emerging economies is gaining momentum, only a limited number of studies have examined the firm-level variables that affect the extent to (...) which MNCs’ subsidiaries in emerging economies pursue PCSR. Using insights from resource dependence theory, institutional theory, and the social capital literature, we argue that MNCs’ subsidiaries that are critically dependent on local resources, have greater ties to managers of related businesses and to policymakers, and that those that are interdependent on the MNCs’ headquarters and other foreign subsidiaries, are more likely to be involved in PCSR. We obtain support for our hypotheses using a sample of 105 subsidiaries of foreign firms that operate in India. Our findings enhance our understanding of the factors that determine MNCs’ political CSR in emerging economies. (shrink)

We review articles about corporate political activity published in Business & Society since its beginnings 60 years ago and in a set of other leading management journals over the past decade. We present evidence that most studies of CPA use the political markets’ perspective. Under the premise that the contemporary political environment has changed significantly since the inception of the political markets’ perspective, our review asks two interconnected questions. First, to what degree have changes in the political environment challenged the (...) ability of the political markets’ perspective to understand the pillars of politics: issues, institutions, interests, and information? Second, to what degree have CPA scholars augmented or diversified their theoretical arguments to accommodate these changes in the political environment? We document the CPA literature across these dimensions and questions and note that many scholars are already adopting other theories side by side with the political markets’ perspective. (shrink)

Corporate social responsibility strategy hinges largely on the CEO characteristics in the context of an emerging market. Based on a sample of 16,144 firm-year observations obtained from 1,370 unique Chinese-listed firms, which whether voluntarily issue CSR reports over the period 2008–2019, this paper empirically examined the impact of CEO characteristics on the likelihood of issuing CSR reports. We find that CEO age, MBA education, international experience and political ideology consciousness are positively associated with the possibility of issuing CSR reports, while (...) a newly appointed CEO will decrease the likelihood of issuing CSR reports. Moreover, we consider a contingent factor, namely CEO power over the board, can significantly enhance the relationship between CEO age, political ideology consciousness, and the likelihood of issuing CSR reports. Furthermore, there’s no significant evidence indicating that CEO power can moderate the relationship between MBA education, international experience, and the likelihood of issuing CSR reports. Nonetheless, CEO power moderates the negative relationship between a newly appointed CEO and CSR reporting initiatives. This study attaches understandings to the extant literature that how top management characteristics can shape firm CSR strategies. (shrink)

Motivated by contemporary debates concerning whether directors inappropriately deploy corporate funds for corporate political donations and the limited research into managerial influence on corporate political donations, we examine the impact of director influences from a network perspective. Using a sample of large listed Australian corporations and their political party donation activity during 2000–2007, we find that both the professional and non-professional networks of directors influence corporate political donations. We observe these influences in relation to donations at the federal and state (...) levels, and with respect to the choice of recipient political parties. (shrink)

Increased interaction among multinational enterprises (MNEs), host governments, and nongovernmental organizations (NGOs) has made the implementation of foreign direct investments (FDIs) more complex and potentially more prone to conflict. In this article, by drawing on a longitudinal case study of a conflict concerning a multinational forest industry company’s pulp mill investment in Uruguay, the authors argue that specific characteristics of the relationships between MNEs, host governments, and NGOs contribute to the escalation of FDI conflicts. When escalated, the conflict has specific (...) effects on these relationships, which effectively prevent the parties from finding a solution to the conflict. Our findings highlight the importance of accurate, prompt responses to NGO demands, and warn against considering the host government as the only source of external legitimacy. (shrink)

This article draws attention to an understudied phenomenon, transnational political alliances (TPA), which occur when multinational corporations cooperate with local companies to influence public policies of the host government. The article first explores the economic and political sources of TPAs, their structures, and the obstacles to their formation. It then examines TPAs in the context of China, a critical case because of the hostile political environment that discourages TPAs. However, the surprisingly common occurrence of TPAs in China indicates the power (...) of economic incentives for political cooperation yet also suggests the need for further studies of TPAs in a wide variety of economic and political settings. (shrink)

This article addresses a theoretical gap in the literature by highlighting the significance of nonbargaining nonmarket strategies of firms. Relying on neo-statist political theory, we propose a theoretical model that hypothesizes a reliance on nonbargaining nonmarket strategies in situations marked by historically and situationally conditioned weakness of societal forces relevant to a firm (including the firm itself) as well as when relevant state institutions display high degrees of professional, structural, and ideological bureaucratic insularity. We survey 165 managers (each representing a (...) separate firm) from 14 countries in Eastern Europe and Central Asia about the strategic importance of the nonmarket strategic initiatives. Our novel survey instrument captures a broader range of nonmarket strategic initiatives than previous empirical research has examined. The survey results provide preliminary support for our model, although the findings suggest the need for more research in different regional contexts. (shrink)

Business scholars pay increasing attention to the expanded influence of stakeholders on firm strategies, legitimacy, and competitiveness. At the same time, analysts have noted that the transformed regulatory and legislative environments of recent decades have encouraged firms to become much more politically active. Surprisingly, relatively little research has tied together these two trends. The present study integrates perspectives on stakeholder management with research on corporate political activity to develop an understanding of the structural sources of stakeholder mobilization in professional grassroots (...) lobbying campaigns. This study employs a unique, original data source to consider how the adoption of grassroots lobbying by a firm relates to its industry, degree of inside lobbying, partisan PAC contributions, and more. This research shows that corporate grassroots lobbying is shaped most significantly by a firm’s degree of inside lobbying, as highly active firms take a diversified strategy for gaining influence. Firms in industries with a heavy public presence as well as those concerned with taxation, government appropriations, and economic development also adopt these strategies readily. PAC contributions to Republican, but not Democratic, candidates also heighten firms’ propensity to lobby the public. (shrink)

This article draws attention to an understudied phenomenon, transnational political alliances (TPA), which occur when multinational corporations cooperate with local companies to influence public policies of the host government. The article first explores the economic and political sources of TPAs, their structures, and the obstacles to their formation. It then examines TPAs in the context of China, a critical case because of the hostile political environment that discourages TPAs. However, the surprisingly common occurrence of TPAs in China indicates the power (...) of economic incentives for political cooperation yet also suggests the need for further studies of TPAs in a wide variety of economic and political settings. (shrink)

This study integrates the research on corporate political strategy and corporate governance. Using the agency theory perspective, this study examines how corporate governance mechanisms such as institutional ownership, insider ownership, and long-term executive compensation affect a firm’s political strategy approach. This study proposes that an agency problem may occur between owners and managers in regard to firms’ approach to corporate political strategy. Since a relational approach to corporate political strategy, such as establishing a government relations office in Washington, DC, requires (...) significant resource commitments without guaranteeing a favorable policy change, shareholders might be reluctant to approve such an approach. In a sample of 3,417 U.S. manufacturing firms, over 5 years of data, the results show that institutional ownership and insider ownership are negatively associated with firms’ propensity to engage in a relational approach to political strategy. (shrink)

Using a contingency theory framework, this study examines the relationship between a firm’s business-government relations (BGR) strategy, BGR structure, and BGR performance. Based on previous work, the study hypothesizes that BGR strategy determines, in part, the structure of the public affairs function, as well as the function’s effectiveness. Furthermore, the study contends that an appropriate fit between BGR strategy and BGR structure leads to improved BGR performance. Results indicate that there is a positive association between BGR strategies (buffering and bridging) (...) and BGR performance. There is also a positive association between BGR strategy and BGR formalization (structure). However, the study finds no direct association between BGR structure and performance. Further analysis reveals that it is a fit between a firm’s BGR strategy and BGR structure that leads to improved BGR performance. The associations between strategy, structure, fit, and performance offer empirical support for the relevance of the contingency theory framework to BGR research. (shrink)

This article addresses how foreign subsidiaries formulate their relational political strategy by responding to the unique parameters of the economic and institutional environment in an emerging market in an attempt to improve their performance. To this end, the authors have developed a model that assesses economic environment antecedents characterizing an emerging market (regulatory distance, industry accessibility, environmental uncertainty, and economic development) as well as the performance consequence of the subsidiaries’ relational political strategy. A possible moderating effect of the firm’s reputation (...) in the host country and length of operations on the relationship between political strategy and local performance is also examined in the model. Our analysis of primary and secondary data concerning 358 foreign-invested enterprises in China generally supports this model. (shrink)

Political contestability is an important issue in the ethical analysis of corporate political activity (hereafter CPA). Though previous studies have proposed analytical frameworks for creating contestable political systems, these studies conceive firm-level factors such as size and wealth as the main (and perhaps, only) determinants of contestability. This relegates the influences of informal managerial-level attributes such as tribalism, especially in ethnically diverse contexts where politics and tribe are inseparable. In this article, I explore the linkages between managers’ tribal identity and (...) political contestability among firms in Ghana. I found that contestability is affected by _tribal consonance_ (similarity) and _tribal dissonance_ (difference) between corporate executives and policymakers. I also found that dissonance creates _liability of tribe_, which causes contestability problems in all four stages of the CPA process—i.e., _political planning_, _political access, political voice_, and _political influence_. Overall, this article extends the micro–macro link of political connections from performance to the ethics of political competition and contestability. It offers important contributions to the literature, advances insightful implications for practice, and outlines useful future research directions. (shrink)

There is a lack of research about the political strategies used by firms in emerging countries, mainly because the literature often assumes that Western-oriented corporate political activity has universal application. Drawing on resource-dependency logics, we explore why and how firms orchestrate CPA in the institutionally challenging context of Nigeria. Our findings show that firms deploy four context-fitting but ethically suspect political strategies: affective, financial, pseudo-attribution and kinship strategies. We leverage this understanding to contribute to CPA in emerging countries by arguing (...) that corporate political strategies are shaped by the reciprocity and duality of dependency relationships between firms and politicians, and also by advancing that these strategies reflect institutional weaknesses and unique industry-level opportunities. Importantly, we shed light on the muttered dark side of CPA. We develop a CPA framework and discuss the research, practical and policy implications of our findings. (shrink)

Variance theories have dominated corporate political action (CPA) research because the pioneering works in the 1970s and 1980s. Process theories offer an entirely new perspective on CPA research, as they are able to explain processes across a number of levels of analysis and link actions to contexts. We add to the existing CPA literature by offering a process model that can be useful especially in historical and evolutionary analysis. Our model depicts CPA as a complex system in which a firm’s (...) actions are affected by various factors across organizational, industry, and institutional levels of analysis. As political actions also influence these factors, the process is in essence systemic and path dependent. Our model supplements existing research by offering the possibility to explain the long-term consequences of CPA vis-à-vis wider societal changes and by promoting longitudinal research strategies. In addition to the theoretical model, we provide a historical analysis of the evolution of the Finnish paper and pulp industry to illustrate the applicability of the framework. (shrink)

This article explores the international dimensions of multinationals' corporate political activities, focusing on an international issue—climate change—being implemented differently in a range of countries. Analyzing data from Financial Times Global 500 firms, it examines the influence on types and process of multinationals' political strategies, reckoning with institutional contexts and issue saliency. Findings show that the type of political activities can be characterized as an information strategy to influence policy makers toward market-based solutions, not so much withholding action on emission reduction. (...) Moreover, multinationals pursue self-regulation, targeting a broad range of political actors. The process of political strategy is mostly one of collective action. International differences particularly surface in the type of political actors aimed at, with U.S. and Australian firms focusing more on nongovernment actors (voluntary programs) than European and Japanese firms. Influencing home-country (not host-country) governments is the main component of international political strategy on climate change. (shrink)

Business Ethics: A European Review, EarlyView.

This study explores the impact of publicly traded founding family firms (FFFs) on their propensity for corporate political activity (CPA) and their choice of political approaches. Based on the behavior and characteristics of publicly traded FFFs, the author expected a positive association between FFFs and corporate political activity and a preference for relational, or long-term, over transactional, or short-term, corporate political activity. It was found that publicly traded FFFs are more likely to engage in CPA only when the firm's founder (...) is in an executive position. Furthermore, publicly traded FFFs show a preference for relational versus transactional corporate political activity. These findings are examined in light of FFF and corporate political strategy literatures. (shrink)

This study integrates the research on corporate political strategy and corporate governance. Using the agency theory perspective, this study examines how corporate governance mechanisms such as institutional ownership, insider ownership, and long-term executive compensation affect a firm’s political strategy approach. This study proposes that an agency problem may occur between owners and managers in regard to firms’ approach to corporate political strategy. Since a relational approach to corporate political strategy, such as establishing a government relations office in Washington, DC, requires (...) significant resource commitments without guaranteeing a favorable policy change, shareholders might be reluctant to approve such an approach. In a sample of 3,417 U.S. manufacturing firms, over 5 years of data, the results show that institutional ownership and insider ownership are negatively associated with firms’ propensity to engage in a relational approach to political strategy. (shrink)

This article addresses how foreign subsidiaries formulate their relational political strategy by responding to the unique parameters of the economic and institutional environment in an emerging market in an attempt to improve their performance. To this end, the authors have developed a model that assesses economic environment antecedents characterizing an emerging market (regulatory distance, industry accessibility, environmental uncertainty, and economic development) as well as the performance consequence of the subsidiaries’ relational political strategy. A possible moderating effect of the firm’s reputation (...) in the host country and length of operations on the relationship between political strategy and local performance is also examined in the model. Our analysis of primary and secondary data concerning 358 foreign-invested enterprises in China generally supports this model. (shrink)