Ch 12, Instructor’s Manual, Business & Society, Carroll 10e
Chapter 12
Business Influence on Government and Public Policy
LEARNING OUTCOMES
After studying this chapter, you should be able to:
1. Describe the evolution of corporate political participation, including the different levels at
which business lobbying occurs.
3. Describe the different types of political action committees (PACs), in terms of their
historical growth, and the magnitude of their activity.
5. Discuss the issues of corporate political accountability and disclosure.
6. Outline the types of strategies for corporate political activity.
TEACHING SUGGESTIONS
INTRODUCTION – In this chapter, the authors focus on business’s attempts to influence
government. They take a descriptive approach to the topic, seeking primarily to understand the
various approaches business uses, and to evaluate strengths and weaknesses, successes and
failures. However, as the students read the chapter, they will undoubtedly be impressed with the
tremendous power that business wields in the political realm, primarily through its application of
KEY TALKING POINTS – The authors did not go into depth about the process by which
corporations gained political power in the United States, but the subject is worth exploring with
students. From the relatively low status corporations held in the early years of the United States,
they have risen to be the most powerful social institution we have. The books mentioned in
Ch 12, Instructor’s Manual, Business & Society, Carroll 10e
independent political broadcasts, equating money with speech. One of the interesting questions
for students to explore is if corporations have garnered too much power in our society.
Several books have delved into this subject in some depth. The instructor may want to
incorporate some of their content into the classroom discussion or assign students to read
While many students are familiar with the concept of lobbying, few understand how the process
actually works and the different levels at which lobbying occurs. A review of the lobbying
PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of:
Cases: 18-Dole’s DBCP Legacy
19-Should Directors Shine Light on Dark Money?
20-DTCA – The Pill Pushing Debate
Ethics in Practice Cases:
The NRA and the CDC
Double Irish with a Dutch Sandwich
Spotlight on Sustainability:
What Green Rankings Don’t Tell You
Power Point slides:
LECTURE OUTLINE
I. CORPORATE POLITICAL PARTICIPATION
II. Business Lobbying
A. Organizational Levels of Lobbying
2. Grassroots Lobbying
4. Umbrella Organizations
a. Chamber of Commerce of the United States
b. Business Roundtable
c. National Association of Manufacturers (NAM)
d. National Federation of Independent Businesses (NFIB)
e. Coalitions
III. CORPORATE POLITICAL SPENDING
A. Arguments for Corporate Political Spending
B. Arguments against Corporate Political Spending
IV. POLITICAL ACTION COMMITTEES
A. The Impact of Super PACs
B. Agency Issues
V. POLITICAL ACOUNTABILITY AND TRANSPARENCY
VI. STRATEGIES FOR CORPORATE POLITICAL ACTIVITY
A. Financial Performance Outcomes
VII. SUMMARY
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
Students should recognize that their answers to these discussion questions should be well
reasoned and supported with evidence. Although some answers will be more correct than others,
students should be aware that simplistic answers to complex questions, problems, or issues such
as these will never be “good” answers.
1. Question: Explain lobbying in your own words. Describe the different levels at which
lobbying takes place. Why is there a lack of unity among the umbrella organizations?
Answer: Lobbying is the organized effort to influence government officials (elected and
appointed) to pass or interpret laws and regulations that are beneficial to your organization.
2. Question: What is a PAC? How is it different from a Super PAC? What are the major
arguments in favor of PACs? What are the major types of PACs and how do they differ? In
your opinion, are PACs a good way for business to influence the public policy process?
What changes would you recommend for PACs?
Answer: Political Action Committees (PACs) are organizations of like-minded individuals
who raise money and donate it to political candidates. The recent Supreme Court decisions
in Citizens United v. Federal Election Commission and Speechnow v. FEC altered the
landscape for how a corporation may participate in the political process, created Super
3. Question: Discuss Citizens United and Speechnow and their likely effect on future
elections. What, if any, reforms would you recommend?
Ch 12, Instructor’s Manual, Business & Society, Carroll 10e
Answer: While the Bipartisan Campaign Reform Act was designed to limit the influence of
soft money and the use of “issue ads” in political campaigns, the Supreme Court recently
determined that these provisions were unconstitutional. In 2010, in the case of Citizens
United v. Federal Election Commission, the Supreme Court ruled that provisions of the
4. Question: What does corporate accountability mean to you? How important is corporate
political transparency?
Answer: Circumvention of government regulations is suspect at best, and most of the time
highly unethical. Rules, laws, and regulations cannot anticipate all possible actions, so
5. Question: What are the limits of corporate political strategy? Are there lines that
companies should not cross?
Answer: In Citizens United, and in Speechnow, the Supreme Court ruled that corporations,
labor unions and other entities have a constitutional right to run advertisements or
GROUP ACTIVITY
Divide students into groups of four to five students. Assign each group a federal candidate for
president or for congressional office. Students should track the political contributions to their
assigned federal candidate. Specifically, students should track individual contributions (and their
affiliations) as well as PAC donations to determine the various groups that may eventually have
INDIVIDUAL ASSIGNMENT
Distribute the following instructions to each student:
Select a corporation, labor union or other group that actively advertised for or against a federal
candidate in the last election cycle. Prepare a written response that addresses the following
questions: (1) Who did the group support? (2) Why did the group support this candidate? (3)
What type of advertising did the group use? (4) What was the nature of the advertisement? (5)
Was the advertisement consistent with the campaign strategy of the candidate? (6) What was
the ultimate outcome of the election? (7) What impact will this spending have on a candidate’s
future decisions?