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1 – 10 of over 41000Drawing 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.
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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 performance…
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.
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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.
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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 benefits…
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.
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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 explore…
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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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 CPSs. This…
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.
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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.
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Juliana Souza Bittar-Godinho and Gilmar Masiero
This paper aims to investigate the political involvement of a corporate foundation (CF) though CSR under two perspectives: CF managers and the sponsor firm managers.
Abstract
Purpose
This paper aims to investigate the political involvement of a corporate foundation (CF) though CSR under two perspectives: CF managers and the sponsor firm managers.
Design/methodology/approach
A single case with a Brazilian CF was conducted. Interviews with sponsor firms and foundations managers were combined with firms’ sustainability reports data and CF’s website information.
Findings
It was found that CF acts as an ambassador and can be a source of political legitimacy for their sponsor firm. They intermediate in governance challenges as the goals and working style of the CF, firms and municipalities can be sometimes antagonistic.
Research limitations/implications
The authors could not reach the municipalities officials and their perception of the Public Management Program (PMP).
Practical implications
The PMP creates personal and organizational relationships with public officials, a resource that can be employed to impact the political strategies of the sponsor firm.
Social implications
The authors also show how CF’s may help managers to deal with the typical Brazilian peculiarity of policy discontinuity in local governments.
Originality/value
This case study sheds light a new phenomenon: CF’s support on public management. It adds to the CSR and corporate political activities literature, the role of foundations as ambassadors of the relationship between the firm, government and society. They are not only filling gaps left by the State but are also dealing with local governments administrative deficiencies.
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Earl Yarbrough Jr, Michael Abebe and Hazel Dadanlar
The purpose of this paper is to empirically examine the link between board of director composition and firm performance. Specifically, the paper argues that board political…
Abstract
Purpose
The purpose of this paper is to empirically examine the link between board of director composition and firm performance. Specifically, the paper argues that board political experience influences the firm’s internationalization strategy as directors with significant political experience provide guidance, resources, and network access that enhance the firm’s international presence. The authors also posit that board political connections would be more helpful for firms operating in high-regulation industries.
Design/methodology/approach
The authors tested the predictions using data from 156 large US firms. Data on directors’ background were gathered from SEC proxy filings, while data pertaining to internationalization were obtained from Compustat and Mergent Online databases. Hierarchical moderated regression analysis was employed to empirically test the hypothesized relationships.
Findings
The findings provide strong support for the positive relationship between board political experience and the degree of firm internationalization. Contrary to the authors’ predictions, the level of industry regulation does not seem to significantly affect this relationship.
Research limitations/implications
Firms aggressively pursuing international strategy could benefit from having directors on their board with robust political experience. One of the limitations of the study is that the types of international activities for firms is not specified in the study as it might be in the form of joint-venture capacity, strategic alliances or for firms that might be born-global.
Originality/value
This study makes original contribution to the on-going research on board political activity and firm performance through internationalization strategy. The findings suggest that having directors’ with political experience is an important asset in influencing firm’s corporate strategy.
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Chinese outward foreign direct investment (OFDI) often causes negative public responses, particularly in western industrialized countries. An important instrument of Chinese…
Abstract
Purpose
Chinese outward foreign direct investment (OFDI) often causes negative public responses, particularly in western industrialized countries. An important instrument of Chinese multinational corporations (MNCs) to overcome these concerns is the use of political strategies. The paper aims to discuss these issues.
Design/methodology/approach
Based on institutionalist theory, the author formulates research hypotheses and tests them with a sample of 611 subsidiaries of Chinese MNCs in Germany.
Findings
The study shows that CEO political connection is positively associated with the use of the information and financial incentives strategies, while state ownership influences the use of the financial incentives and reputation-building strategies. Also, moderating effects of subsidiary age on these three political strategies are revealed.
Originality/value
The author derives implications for the literature on corporate political strategies as well as for research on Chinese OFDI, institutional theory and international management theory.
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