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Page 8-1
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
PREVIEW CASES
The Honest Ads Act
The National Cannabis Industry Association
As the first example above demonstrates, government and business must carefully
monitor online political advertisements to ensure that the public is protected from
deception, and information is transparently available. In the other opening example,
CHAPTER OUTLINE
I. PARTICIPANTS IN THE POLITICAL ENVIRONMENT
A. Business as a Political Participant
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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
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
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
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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
C. Promoting a Constituency-Building Strategy
Stakeholder coalitions
Advocacy advertising and public relations
Trade associations
Legal challenges
Teaching Tip: Financing a Campaign
Student may wish to research a recent federal, state or local political
campaign and uncover how much each candidate raised and spent
during the campaign to acquire a sense of the magnitude of political
campaign financing. Perhaps a class debate could emphasize 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
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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
political process.
LO 8-2: Knowing the types of corporate political strategies and the influences on an
organization’s development of a particular strategy.
LO 8-3: Assessing the tactics businesses can use to be involved in the political
process.
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
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
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
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
Citizen’s United decision
lobbying
political action committees (PACs)
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The Business Roundtable
trade associations
INTERNET RESOURCES
www.endcitizensunited.org End Citizen United
www.nfib.com National Federation of Independent Businesses
www.politics.co.uk/ Politics.co.uk
pac.org Public Affairs Council
DISCUSSION CASE
POLITICAL ACTION BY THE U.S. STEEL INDUSTRY, 2015-2018
Discussion Questions
1. Did the steel industry act appropriately as a participant in the political environment
when it sought economic protection from foreign steel imports?
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the
prior written consent of McGraw-Hill Education.
4. What levels of corporate political involvement, as shown in Figure 8.5, are evident in
the case?
5. Should Chinese and other country’s steel producers be permitted to engage as a
political participant in the U.S. political environment to protect their economic
interests?
