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Political Strategies of Foreign Firms in the Dutch Chemical Industry

New Policy Challenges for European Multinationals

ISBN: 978-1-78190-020-8, eISBN: 978-1-78190-021-5

Publication date: 16 November 2012

Abstract

Purpose – This chapter explores the rationale for foreign companies to have a political strategy and how these companies are politically active in a small, open and regionally integrated economy. The reasons why companies are engaged in corporate political activities are tied to the rationales for corporate political actions but are also interrelated with the question of how effective is the selected corporate political approach in the institutional environment of a host country. The approach of political corporate activities is based on the relational and transactional approaches.

Design/methodology/approach – This chapter is largely exploratory and focuses on a non-American political context. The evidence is coming from the foreign firms operating in the chemical sector of a small, open and regionally integrated economy, the Netherlands, which is part of the larger economic entity the European Union (EU). In-depth interviews were conducted with general managers of foreign-owned firms because they could provide most insight into the political strategies of their subsidiary. The data collected through the interviews were analysed using content analysis, by using four entities of analysis: analysis on words, sentences, fragments or themes.

Findings – Empirical evidence shows a strong transactional predisposition among the political activities of foreign firms as a result of the red tape bureaucratic Dutch system. On a standalone basis, the small foreign firms did not consider that they have the power to influence political decision making in any way. The majority of firms are member of an industry association. These associations interact with political decision makers in the Netherlands on behalf of these firms.

Originality/value of chapter – This chapter takes a foreign firm-specific level of analysis on corporate political strategies approach in a host institutional environment, which is generally more researched at multinational enterprises level. The Netherlands, with a small, open and regionally integrated economy, represents a totally different setting than the pluralist country, in particular the American one, and therefore, the existing American based literature on political strategies will be less representative for this corporatist country. The design choice and the effect of the approach of political strategies implemented by the foreign firms are affected by the specific host institutional environment.

Keywords

Citation

van Kranenburg, H., Lelia Voinea, C. and Burger, M. (2012), "Political Strategies of Foreign Firms in the Dutch Chemical Industry", Van Tulder, R., Verbeke, A. and Voinea, L. (Ed.) New Policy Challenges for European Multinationals (Progress in International Business Research, Vol. 7), Emerald Group Publishing Limited, Leeds, pp. 31-57. https://doi.org/10.1108/S1745-8862(2012)0000007005

Publisher

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Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited