978-1259315411 Chapter 8 Solution Manual

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CHAPTER 8

INFLUENCING THE

POLITICAL ENVIRONMENT

INTRODUCTION

Businesses face complicated issues in managing their relationships with politicians and

government regulators. Managers must understand the political environment and be

active and effective participants in the public policy process. They need to ensure that

their company is seen as a relevant stakeholder when government officials make public

policy decisions and must be familiar with the many ways that business can influence

these decisions. The opportunities afforded businesses to participate in the public policy

process differ from nation to nation. Sound business strategies depend on an

understanding of these differences, enabling businesses to manage worldwide business–

government relations effectively.

PREVIEW CASES

The State of Arkansas

“Religious freedom” Laws

As the preview case demonstrates, many businesses are active participants in the political

process to promote organizational goals, as some did in this instance when they

confronted the state legislature and governor. While not always successful, corporate

political actions can alter legislation and protect stakeholders, as seen in Arkansas. In

general, business recognizes the necessity of understanding the political environment and

of addressing political issues as they arise. This is a constant challenge for business and

mangers entrusted with managing the political environment, because which issues

warrant intervention is often controversial.

Teaching Tip: Preview Case

The preview case emphasizes a relatively rare instance of businesses

actively engaging in a social-political issue: the passage of religious

freedom laws in Arkansas. A video showing the opposing viewpoints

surrounding this legislation can be found at:

http://www.bing.com/videos/search?q=Arkansas%20religious%20freed

om%20law%20videos&qs=n&form=QBVR&pq=arkansas%20religiou

s%20freedom%20law%20videos&sc=0-0&sp=-

1&sk=#view=detail&mid=7B14B61C4BF528DF8DC97B14B61C4BF

528DF8DC9.

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CHAPTER OUTLINE

I. PARTICIPANTS IN THE POLITICAL ENVIRONMENT

A. Business as a Political Participant

II. INFLUENCING THE BUSINESS-GOVERNMENT RELATIONSHIP

A. Corporate Political Strategy

III. POLITICAL ACTION TACTICS

A. Promoting an Information Strategy

 Lobbying

Teaching Tip: Arguments For and

Against Business in Politics

The question of whether businesses should be allowed to be involved

in the political environment is an excellent question for an in-class

debate. Students may want to focus on the ethical aspects of the

question: businesses have the right to be involved versus it is unfair for

businesses to be involved given their potential economic power which

create imbalances in the process. Or, students may want to pose an

“outcome–based” argument, citing examples where business’s

involvement has benefited others or has harmed others. Figure 8.1 may

be used as a foundation for this debate.

Teaching Tip: Business Strategies

for Influencing Government

Figure 8.2 is a good tool for students to use to identify and discuss

various political tactics used by business to influence an emerging

piece of legislation or a current political campaign. A comparison of

the tactics used by different firms, or to influence different political

party candidates, or to impact different legislative efforts may be a

good class exercise.

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 Direct communications

 Expert witness testimony

B. Promoting a Financial-incentive Strategy

 Political action committees

 Super-PACs

 Tax-exempt organizations

 Direct contributions by corporations

 Executive and employee personal contributions

 Economic leverage

C. Promoting a Constituency-Building Strategy

 Stakeholder coalitions

 Advocacy advertising and public relations

 Trade associations

 Legal challenges

Teaching Tip: Revolving Door

Is it ethical for a former regulator or legislator to accept a job that

requires her or him to lobby or influence those colleagues still on the

regulatory board or in Congress? Should a former regulator or

politician be free to take any job she or he wants, or should there be

greater controls on the revolving door practice?

Teaching Tip: Financing a Campaign

Student should be aware of the evolving legislation regarding political

campaign financing as discussed in this chapter. Perhaps a class debate

could emphasize the arguments in favor of allowing widespread or

unfettered financial influence by business, where the other group could

argue that controls are needed.

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IV. LEVELS OF POLITICAL INVOLVEMENT

V. MANAGING THE POLITICAL ENVIRONMENT

VI. BUSINESS POLITICAL ACTION: A GLOBAL CHALLENGE

GETTING STARTED

KEY LEARNING OBJECTIVES

LO 8-1: Understanding the arguments for and against business participation in the

Teaching Tip: Political Action Tactics

Various realistic or hypothetical examples of political elections,

regulatory reforms, or other political issues could be presented to

student groups asking them to develop effective strategies emphasizing

specific political tools. Then students in the other groups could

comment on and critique how effective the other group’s strategies

may be.

Inviting a local politician to class might be another way to assess the

effectiveness of the group’s strategies and use of political tools.

Teaching Tip: Levels of Political Involvement

The investigation of a corporation’s political action history could

support or challenge the developmental levels of political involvement

model presented in this chapter. Or, inviting a senior executive to class

to speak on the firm’s political action history could allow the students

to seen the level of political involvement in practice or question the

model.

Teaching Tip: Managing the Political Environment

The public affairs department is often the central focus of political

activity for a business organization. It might be helpful for students to

invite a guest public affairs officer to the class or explore on the

Internet public affairs functions of a major company. The Foundation

for Public Affairs is an excellent resource for information.

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LO 8-2: Knowing the types of corporate political strategies and the influences on an

organization’s development of a particular strategy.

There are three political strategies: information, financial-incentives, and constituency-

LO 8-3: Assessing the tactics businesses can use to be involved in the political

process.

Some of the political action tactics available for business include lobbying, direct

LO 8-4: Examining the role of the public affairs department and its staff.

LO 8-5: Recognizing the challenges business faces in managing business-

government relations in different countries.

KEY TERMS

advocacy advertising

bundling

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INTERNET RESOURCES

DISCUSSION CASE

MEDIA

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Discussion Questions

1. Which of the political tactics discussed in this chapter are evident in this case?

The “new media” adopted a novel approach and used innovative forms of social media to

and making telephone calls to various influential members of Congress.

2. Why were the political tactics used by the “new media” so effective in this case?

and e-mails were quicker and becoming more popular as a form of communication. More

3. Would the effectiveness of these tactics vary, depending on the political issue at stake?

But, given the growing number of politicians who have adopted social media as their

4. What can traditional companies learn from the new forms of political activity described

in this case?

to recognize how interacting with stakeholders has evolved and how effective and efficient

political environment.