Why are companies active in politics? Why do they operate lobbying, why they talk politics departments and capital offices, why they participate in political debates, why they invest money into political purposes?
Because it makes economic sense:
protect and improve their competitive position, ward off risks, can better and faster to market and legislative changes to respond and adapt. The larger and more diversified company, the greater the interest in politics, and just as it is when the markets these companies are regulated more heavily if the company sells its products and services to the State or if competitors from abroad are important.
This we know from practice. To what extent this is confirmed by science? can refine the science, (1) what factors affect political involvement of companies, and (2) to what extent the political activities of its economic performance - to improve corporate (keyword value-added contribution) - the "performance"?
in current Journal of Management (January 2011, 37 born, Volume 1) tries to review " Mixing Business with Politics: A Meta-Analysis of the Antecedents and Outcomes of Corporate Political Activity " a response to the U.S.. The authors Sean Lux, T. Russell Crook and David J. Woehr have evaluated in a meta-analysis, "numerous studies from different disciplines (Economics and Political Science and Sociology) - after all 78 research projects since 1976, some 7,000 companies were analyzed.
Some Results: Many factors affect
- policy Activities of enterprises, but very few factors are really central. The strongest driver are the strength of political actors, the level of regulation in markets and firm size.
- There is a clear positive correlation of political activities and economic performance: companies who are politically active than average, show higher by about 20 percent capacity.
- companies with significant foreign competition tend not more than other companies to get involved politically (for example, to demand in the foreign trade policy, protectionism).
- Political business activities are in fast-growing and slow-growing markets are about as strong. refute the presumption of the original scientists, that are to be found in mature markets with slow growth rather more political activity, because the policy could compensate for lower growth opportunities.
- When companies grow and expand into new business areas , they also have to deal with new legislation and to meet more frequently to the state - a result, you pay more attention to politics.
Whether and how companies can make chances in politics depends on the configuration institutional setting and the behavior of political actors . The political Economy, for example, interprets the interaction between business and politics as a market with supply and demand, says the bargaining of political resources (information, votes, money).
Companies turn to mostly incumbents who already have power and influence to "deliver" a desired political result, and the re-election likely. Companies invest so dear-risk place in elected officials in their challengers. Adjusts the ideological positioning the incumbent to the objectives of the company, the better - and then the management even more willing to care for better access to them.
wrangle same time, many stakeholders to ensure such access, especially groups that want something completely different to be companies also are politically active. They react to the political competition . Tends could cause the state to regulate an industry intensive, costs and expenses, and change the market, which is another reason for the political commitment of the economy. More regulation = more lobbying, etc. If
the state itself a major customer of an industry , the more likely is a political commitment as well, increasing sales to make business with the state as a customer, is also a growing concern, the relationship to manage the state. Finally, look at the science of politics dependence on the resources of the economy . For example, if an industry in a major employer constituencies, the constituency MPs is also on the ups and downs of these companies depend.
The more concentrated an industry is and the greater the scale, a consensus of the parties , the greater the chances of enforcing the policy somewhat. effective bundled business interests are an advantage. Also freeloading in the own sector is reduced. From the research can be inferred, therefore, the assumption that the higher the industry concentration, the stronger the political commitment from the company.
companies may see this as an opportunity to deny foreign competitors enter the market or to impede by influencing politics. The return policy investment can be very high. protectionism is equally attractive to politicians and companies, for politicians is especially critical that foreign companies no votes. The greater the pressure from foreign rivals, so is the thesis that the more higher is the motivation to give to political influence.
Big companies care more about politics than small ones. This has a number of reasons. Companies have many stakeholders, particularly , have a great environment to be monitored closely and are the focus of many demands from society.
Large companies are also able many needs, including the State they supply the state with essential goods and services, often as a quasi-monopoly (Eg in the defense industry, but also in it). If the state as a customer dependent on these large companies shows the relevance of political relations by themselves Another reason is simply that have large companies more opportunities to care about politics: they have more money, high division of labor, more specialists. Therefore, the greater the company, the more it is engaged in politics.
policy must be profitable for the merchant. "Dare to policy" is not primarily ethical, but a practical requirement that must pay off. Money into political activities take place in better products, production, financing, marketing and sales, must be able to justify economically.
But exactly what to wear political activities in the value chain? What exactly a company like this? More jobs? Subsidies? Competitive disadvantage to the competition? The answer can be complex. In any case, the presumption must be political commitment to economic performance have a correlation. But how big is it?
complicated meta-method
The authors investigated quantitatively oriented studies to make a aggregate data analysis . This is easier in the U.S. than in Europe, as spending on lobbying and political contributions due legal Transparenzvorsc must be hriften published in detail and there are so many quantitative studies. Data such as jobs, contracts with government customers, import market share, sales and other balance sheet figures and many more were involved. The methodological comments on the data base read is naturally dry, but it is helpful and interesting to assess which indicators were used exactly in the studies (overview table p. 234). Making
results: clear correlations in 10 out of 12 factors
shows in the text Table 2 (p. 236) different correlation measures for the 12 factors or assumptions of the authors, they have drawn from the various studies. Record: 10 of 12 theses were in the evaluation of the studies support.
The significance of these statistical relationships is not excessively high, but compared with the usual values of social science statistics and big enough after all positive throughout - with the sole exception in point 8, international competitive pressure (-0.6). The authors find very interesting, but the result does not really believe. They think that the complexity of the issues involved plays a role. But it is also possible that political and economic surrender to a consensus of free markets and protectionism in a globalized trading world no longer has many fans.
A bit disappointed the authors do now. The 10 "successful" factors show a statistical explanatory power that would have the view of the authors may be more convincing. The degree of weakness was then already "troubling" for the science that would explain the political activities of companies reliably.
the purposes of the " institution-based view of strategy" of the research field of strategic management is the still worth something: If institutional factors are important for understanding the performance of companies, then political activities (ie, how firms manage policy and ) influence important. go for the practice, the authors assume that the political commitment of the economy will grow, because the policy included in the deed.
is to balance the weight of the results.
The strongest driver of political activities are surprising even for the non-writers, the elected representatives of the political status addressees of regulation of an industry and company size. Business Studies in the past rather than the size of the company emphasizes key driver where to take economists and political scientists, government regulation and the ability of politicians to business needs, as important assesses. Both have equal rights, the authors say now - the statistical difference is minimal.
The authors finally present some directions in which research should go further. These include first, that the number of factors examined should be increased.
- For the group of institutional factors should weighting of topics (Issue Salience) and the needs of the voter base (Constituent Needs) are recorded.
- In the markets and industries the authors would like to supplement the factor market opportunities through acquisition of market risks also highlight the role of business associations.
- A number of new factors should be introduced for the corporate level : Social significance of the company, legal activities, governance issues, foreign shareholders, the company's policies, political resources and skills, orientation and characteristics of top management.
is here much to explore and discover - and so much that you can perform a promising meta-analysis. Here, the authors say, of course, quantitative analysis, beyond the previously dominant analysis of lobbying expenditures and political contributions from the public register databases. These are for U.S. policy, researchers could easily access, illuminated only part of the public affairs world.
the factor "Government Action" want to include the authors, therefore, in future analysis. While there are studies on this, but not enough - clearly a missing link on the path to a fuller explanation by meta-analysis on a quantitative basis.
media response to the study
to interfere in the policy is profitable for companies - it is obvious that this conclusion is to evaluate very different. offer
for those responsible for public affairs here in the internal arguments struggle for resources. Other drives the results once again, the worry lines on her forehead: When lobbying, political contributions pay off for companies & Co provable in dollars and cents, then it must be bad but for the integrity of democratic politics.
The President of the Washington Public Affairs Council (PAC), Doug Pinkham, has taken up the latest publication in the Journal of Management in his blog ( "Turning good news into bad news") .
While it the substance of the Research (public affairs is good for business) like he was very annoyed about what the universities have made in publishing it, and which has met with the media coverage.
The universities would have served the purpose of increasing awareness of the stereotypes that political activities of companies are basically a corruption story. As hanger uses the University of Tennessee in their press release ("UT professor Find Mixing Business with Politics Pays Off") November 2010 in fact quite simple messages.
PR technique is also understandable that some researchers media suitable for specific examples have called and can follow interpretations that have to do with the study itself is limited somewhat. It is about the controversial decision of the Supreme Court of the United States in January 2010 (Citizens United vs. . Federal Election Commission), allow the economy to limit future spending on political campaigns. Therefore, and because there is less transparency, can quote the researchers, was with even more political activities of companies and closer ties between politics and business to be expected. Leading the way is then the law also Copyright Term Extension Act (nickname "Mickey Mouse Protection Act"), in which the Disney group successfully sought an extension of copyright. This was neither illegal nor corruption, but an interference with free competition. Such political commitment of companies would increase and more and get worse.
With these submissions - which represent more of an economic commentary published as an explanation of the study - like the authors are right. PAC chief Pinkham criticized the opinion, however, be completely covered. What was then made in the media from the study bothered him still more. For the suspension of the court decision Citizens United together with all the negative connotations in the media made the race. Because people have the press the university probably had the right nose.
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