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Article
Publication date: 10 August 2010

Mine Ozer and Lívia Markóczy

Drawing on the strategic choice and resource dependence perspectives, the purpose of this paper is to investigate the relationship between corporate political strategy and…

Abstract

Purpose

Drawing on the strategic choice and resource dependence perspectives, the purpose of this paper is to investigate the relationship between corporate political strategy and innovation in the manufacturing industry in the USA.

Design/methodology/approach

The paper proposes two competing views on the relationship between corporate political strategy and innovation building on strategic choice and resource dependence perspectives.

Findings

The results show support for the resource dependence perspective, suggesting that corporate political strategy is complementary to innovation. The paper also tests for the moderating effects of firm characteristics such as firm size and financial resources, and industry characteristics such as industry concentration and growth on this relationship. The findings indicate that firms that invest heavily in innovation strategies may also want to consider investing in corporate political strategy to create favorable conditions for innovation.

Originality/value

The paper suggests that corporate political strategy can be viewed as alternative or complementary to innovation strategy. Firm characteristics such as firm size and financial resources, and industry characteristics such as industry concentration and growth, moderate the relationship between corporate political strategy and innovation.

Details

Journal of Strategy and Management, vol. 3 no. 3
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 10 October 2016

Yaqing Lin, Yan Li, Shuming Zhao and Steven Armstrong

By incorporating the resource-based view with the dynamic capability view, this study aims to examine the link between corporate political networking strategy and firm…

Abstract

Purpose

By incorporating the resource-based view with the dynamic capability view, this study aims to examine the link between corporate political networking strategy and firm performance in transition economies by focusing on the mediating role of corporate entrepreneurship and the moderating role of dysfunctional competition.

Design/methodology/approach

A large-scale questionnaire survey was conducted among 1,300 senior managers from 650 enterprises in China, and valid survey data were obtained from 401 enterprises.

Findings

Empirical results demonstrate that political networking strategy is positively related to firm performance and that this relationship is fully mediated by corporate entrepreneurship. Moderated path analysis indicates that dysfunctional competition strengthens the direct effect of political networking strategy on corporate entrepreneurship and its indirect effect on firm performance via corporate entrepreneurship.

Originality/value

This research is among the first to examine the mediating mechanism underlying the relationship between political networking strategy and firm performance in the context of transition economies. In addition, existing research has seldom discussed the effects on corporate entrepreneurship of external resource acquisition from government sources. This research fills this important gap and identifies the condition under which political networking benefits corporate entrepreneurship.

Details

International Journal of Conflict Management, vol. 27 no. 4
Type: Research Article
ISSN: 1044-4068

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Article
Publication date: 2 August 2013

Mine Ozer, Irem Demirkan and Omer N. Gokalp

This study aims to investigate how corporate lobbying affects the relationship between collaboration networks and innovation.

Abstract

Purpose

This study aims to investigate how corporate lobbying affects the relationship between collaboration networks and innovation.

Design/methodology/approach

The study incorporates insights from the corporate political strategy perspective into the social network research to examine how firms utilize non‐market mechanisms as a way to manage uncertainty. In particular, using data from 291 US pharmaceutical firms, the authors study the moderating effects of corporate lobbying on the relationship between collaboration networks and firm innovativeness.

Findings

The results show that corporate lobbying moderates the relationship between network centrality, structural holes, and network size, and firm innovativeness.

Originality/value

The study integrates social network and corporate political strategy research in the case of collaboration networks. Integrating social network and corporate political strategy literatures provides us with new insights into what determines success of firm innovativeness. The study shows that in addition to network structures, firms must consider other variables such as government regulation in fostering their innovativeness.

Details

Journal of Strategy and Management, vol. 6 no. 3
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 29 July 2014

Wu Wei, Yanping Li and Pengcheng Zhang

The purpose of this paper is to present a conceptual framework of corporate political performance (CPP) in corporate political activity. In fact, CPP refers to political

Abstract

Purpose

The purpose of this paper is to present a conceptual framework of corporate political performance (CPP) in corporate political activity. In fact, CPP refers to political benefits obtained by firms when they formulate and implement political strategies to influence the public policy process though the investment of political resources. This paper focuses on answering what is perhaps the most fundamental question to strategy researchers: “How do firms engage in political strategies to improve their performance?”

Design/methodology/approach

In building a theoretical framework, this paper, first, provides a historical analysis of political efficiency and effectiveness. Then, this paper attempts to illustrate conceptually our understanding of political performance process by a generalized and contingent approach. Finally, this paper discusses the framework, its theoretical contribution and practical implications for Chinese management, and comments on limitations for future research.

Findings

The paper presents a conceptual CPP model that integrates political efficiency and effectiveness approach. In the conceptual framework, three phases of CPP include sources of political advantage, political competitive advantage and political performance outcome, and three dimensions are identified as political efficiency, effectiveness and adaptiveness. CPP approach is not a “generalized” nature of political performance measurement, as the difference among firms and industries in this area may be significant, which reflects the effect of context, reaction and outcome factors.

Research limitations/implications

While it provides a strong theoretical foundation, this paper still has almost little empirical evidence concerning CPP process. However, how to measure CPP has increasingly begun to focus on an important research domain in corporate political strategy literature. This paper believes that this model has a need for future research to test its feasibility by using the measurement scales in Chinese context.

Originality/value

This paper is original in its attempt to measure CPP to help the business practice in corporate of political activity, and broaden corporate political strategy research in mainstream strategic management.

Details

Chinese Management Studies, vol. 8 no. 3
Type: Research Article
ISSN: 1750-614X

Keywords

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Article
Publication date: 24 August 2012

Xinming Deng, Zhilong Tian, Jianfeng Li and Muhammad Abrar

The purpose of this paper is to comprehensively investigate the combined influence of a firm's political connection and diversification on corporate performance, and to…

Abstract

Purpose

The purpose of this paper is to comprehensively investigate the combined influence of a firm's political connection and diversification on corporate performance, and to explore whether firm's political connection has an impact on the diversification effect, and whether this diversification effect would promote its performance significantly or not.

Design/methodology/approach

The research used a regression model to explore the correlation among political connection, diversification strategy, and corporate performance. The research subjects are the private enterprises listed on Shanghai and Shenzhen Stock Exchange in China for the period 2002‐2005.

Findings

The study found that: first, for those firms without political connections, the relationship between diversification strategy and corporate performance displayed an “inverted U” curve; for firms with political connection, the relationship was a “reverse L”. Second, firms with political connections are more likely to implement a diversification strategy, especially unrelated diversification. Third, when implementing an internationalization strategy, private enterprises with political connections are more likely to expand through unrelated diversification strategy. Fourth, the diversification of the enterprises with political connection are more likely to promote the short‐term accounting performance than those without political connection, but the unrelated diversification of politically connected enterprises would have a negative impact upon its future performance, that is to damage the company's market value.

Originality/value

The paper expands the literature on the relationship between diversification and firm performance. It contributes to the research about the influence of political connection upon corporate performance.

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Article
Publication date: 7 August 2017

Haritz Gorostidi-Martinez and Xiaokang Zhao

By reviewing the overall concept of corporate political strategy (CPS), the purpose of this paper is to display a contemporary summary of issues of the diverse global…

Abstract

Purpose

By reviewing the overall concept of corporate political strategy (CPS), the purpose of this paper is to display a contemporary summary of issues of the diverse global CPSs. This study additionally aims to provide relevant corporate political behavioral concepts that surround a firm’s political actions when entering specific politico-economic markets as well as future work recommendations. This paper further provides a contemporary bibliographic analysis on CPS.

Design/methodology/approach

Through a systematic ISI Web of KnowledgeTM All Databases literature review on “CPS,” the research was refined in relation to articles from “all year time-span,” “social science,” and “business economic” areas. After relevant papers were retrieved, sorted, and analyzed, a final bibliographic analysis on CPS was performed using HistCite reference graph maker.

Findings

Results of this research provide a table with a conceptual summary of different CPS types, approaches to political strategy, participation levels, assessment of the political environments, research implications, as well as other related CPS factors.

Research limitations/implications

There is still a lack of empirical research on how specific firm CPSs can help overcome the effect of foreignness within different host countries. This study provides an overview and list of CPSs that companies use when entering a particular politico-economic context as well as inner CPS research streams.

Originality/value

This contemporary conceptual taxonomy on CPS provides researchers as well as practitioners with insights into the global CPS evolution, in addition to a current picture of CPS within different contexts.

Details

Journal of Advances in Management Research, vol. 14 no. 3
Type: Research Article
ISSN: 0972-7981

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Book part
Publication date: 14 May 2018

Kathleen Rehbein, Frank den Hond and Frank G. A. Bakker

Corporate social responsibility (CSR) and corporate political activity (CPA) are two important components of firms’ nonmarket strategies, oriented toward shaping the…

Abstract

Corporate social responsibility (CSR) and corporate political activity (CPA) are two important components of firms’ nonmarket strategies, oriented toward shaping the firm’s political and social conditions. Although this is acknowledged in the literature, there are contradictory arguments and evidence, concerning, first, whether and under which conditions firms align their CPA and CSR activities, and second, what the impacts might be if they do align these activities. In light of this, this chapter draws from earlier reviews of nonmarket strategies, to explore the factors at multiple levels, macro and micro, that may drive a firm’s alignment of CPA and CSR. In doing so, we draw from management research to identify the macro- and micro-level factors that shape CPA and CSR alignment as CSR and CPA alignment research mostly focuses on outcomes rather than identifying the drivers of alignment. We develop a general model that integrates the macro- and micro-level discussions to make suggestions about where future research needs to go to increase understanding of when corporations will combine their CPA and CSR efforts and the merits of these efforts.

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Article
Publication date: 11 November 2014

Ekin Alakent and Mine Ozer

Organizational legitimacy is greatly influenced by firm corporate social responsibility (CSR) records. An organization with a poor CSR record can either try to improve its…

Abstract

Purpose

Organizational legitimacy is greatly influenced by firm corporate social responsibility (CSR) records. An organization with a poor CSR record can either try to improve its practices or attempt to manipulate institutional norms and belief systems in order to convince the society that its practices are acceptable. The authors argue that firms’ corporate political strategies (CPS) – attempts by firms to influence public policy outcomes in a favorable way – can be very effective in shaping legitimacy norms and offsetting negative public image. The purpose of this paper is to draw on institutional theory and propose that firms with negative CSR records consider investing in political strategies necessary in order to construct new legitimate standards in line with their strategies.

Design/methodology/approach

The authors test the hypotheses on 348 manufacturing firms using data from “The Center for Responsive Politics.” MSCI (formerly known as KLD) and COMPUSTAT. Research methodology used to test hypotheses is hierarchical ordinary least square regression analysis.

Findings

The authors find that firms with high CSR concerns invest more in CPSs. In addition, the results indicate that organizational visibility and organizational slack positively moderate this relationship. In other words, visible firms and firms with high organizational slack invest more in CPSs if they are facing CSR concerns compared to firms that are less visible and with less organizational slack.

Research limitations/implications

In this paper, the authors focus on the corporate governance dimension of CSR. Although focussing on the negative corporate governance practices gives us an opportunity to have a more focused approach, there are other important aspects of CSR such as environmental practices, employment issues, and accounting practices that are not addressed in this study.

Practical implications

This paper can serve as a testament to the value of investing in political strategies to the practitioners. The results indicate that firms can manage their image and reputation through political spending and this is especially true for firms that are more visible and have more organizational slack.

Originality/value

Much of the previous literature explores the relationship between market factors such as financial status of the firm and political strategies. This paper contributes to the literature by showing that other non-market forces such as poor social standing can also motivate companies to invest in political strategies.

Details

Journal of Strategy and Management, vol. 7 no. 4
Type: Research Article
ISSN: 1755-425X

Keywords

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Book part
Publication date: 3 May 2016

David P. Baron

This paper provides a perspective on the field of nonmarket strategy. It does not attempt to survey the literature but instead focuses on the substantive content of…

Abstract

This paper provides a perspective on the field of nonmarket strategy. It does not attempt to survey the literature but instead focuses on the substantive content of research in the field. The paper discusses the origins of the field and the roles of nonmarket strategy. The political economy framework is used and contrasted with the current form of the resource-based theory. The paper argues that research should focus on the firm level and argues that the strategy of self-regulation can be useful in reducing the likelihood of challenges from private and public politics. The political economy perspective is illustrated using three examples: (1) public politics: Uber, (2) private politics: Rainforest Action Network and Citigroup, and (3) integrated strategy and private and public politics: The Fast Food Campaign. The paper concludes with a discussion of research issues in theory, empirics, and normative assessment.

Details

Strategy Beyond Markets
Type: Book
ISBN: 978-1-78635-019-0

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Book part
Publication date: 16 November 2012

Hans van Kranenburg, Cosmina Lelia Voinea and Marije Burger

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…

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.

Details

New Policy Challenges for European Multinationals
Type: Book
ISBN: 978-1-78190-020-8

Keywords

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