W3 - LITERATURE Flashcards
What are the two general approaches to political action?
Transactional and relational
What are the two levels of participation in corporate political strategy?
Individual and collective
List the three types of generic political strategies.
- Information
- Financial incentive
- Constituency building
What does the model of political strategy formulation integrate and extend?
Prior diffused work on corporate political strategies
What are the three sequential decisions in political strategy formulation?
- Approach to political strategy
- Participation level
- Specific strategy choices
True or False: Government policies significantly affect the competitive environment of firms.
True
What role does government play in relation to firms and their competitive environment?
Critical source of uncertainty
What was Epstein’s (1969) view on political competition?
Political competition follows in the wake of economic competition
What are the three general business responses to public policy according to Weidenbaum (1980)?
- Passive reaction
- Positive anticipation
- Public policy shaping
Fill in the blank: Corporate political behavior is an attempt to use the power of government to advance _______.
[private ends]
What is the overall objective of political behavior for firms?
To produce public policy outcomes favorable to economic survival and success
What is a proactive corporate political strategy?
A strategy involving specific tactics aimed at achieving political objectives
What is lacking in the existing literature regarding corporate political strategies?
A comprehensive schema that spans across nations
List the three general dimensions of political strategy.
- Approaches to political strategies
- Participation levels
- Types of strategies
According to the article, firms with plentiful resources are more likely to engage in what type of political action?
Individual political action
What is the significance of government decision-makers in relation to market size?
They can alter the size of markets through purchases and regulations
True or False: Corporate political behavior can only be reactive.
False
What is the importance of anticipating political problems for firms?
It is essential for navigating the competitive landscape
What did Weidenbaum (1980) state about public policy for business?
Public policy is no longer a spectator sport for business
What is the effect of government regulation on the relationship between business and government according to Weidenbaum?
It has fundamentally altered the relationship
Fill in the blank: The overall objective of corporate political action is to achieve _______.
[favorable public policy outcomes]
What factors can affect the choice of political strategies for firms?
Firm and institutional variables
What are firms considered as in the context of resources?
Firms are bundles of heterogeneous resources
This concept suggests that different firms possess varying resources that influence their political actions.
What type of political action are firms with plentiful resources more likely to take?
Individual political action
Resource-rich firms tend to engage in political activities independently.
What type of political action do resource-poor firms typically use?
Collective political action
Firms with fewer resources often collaborate to influence political outcomes.
What do institutional arrangements influence in corporate political strategies?
The choice of political action
Different countries’ institutional frameworks shape how firms engage politically.
What are the two general approaches to political strategy firms can adopt?
Transactional approach and relational approach
Firms may either respond to specific issues or build long-term relationships.
What characterizes a transactional approach to political strategy?
A short-term exchange relationship
This approach focuses on immediate issues rather than long-term relationships.
What do firms using a relational approach attempt to build?
Relationships across issues and over time
This strategy aims to prepare for future public policy challenges.
According to Hillman and Keim (1995), who are the ‘demanders’ and ‘suppliers’ in the public policy process?
Demanders are those seeking policy changes; suppliers provide policy solutions
This framework helps understand the dynamics of political influence.
What is social capital in the context of political strategies?
Trust developed through continued exchange relationships
This enhances cooperative exchanges and collective political action.
What are the three variables that may affect a firm’s decision to adopt a transactional or relational approach?
- Degree of dependence on government policy
- Level of product diversification
- Degree of corporatism/pluralism in the country
These factors influence how firms engage in political action.
Proposition 1 states that firms with higher perceived dependence on government policy are more likely to use what approach?
A relational approach to political action
This suggests that firms heavily impacted by regulations will engage more deeply in political relationships.
Proposition 2a states that firms with more related-product diversification are more likely to use which approach?
A relational approach to political action
Related-product firms focus on specialized political knowledge.
Proposition 2b states that firms with more unrelated-product diversification are more likely to use which approach?
A transactional approach to political action
Unrelated-product firms may not develop deep political relationships.
What distinguishes corporatist political systems from pluralist systems?
Corporatist systems have institutionalized participation by certain interests, while pluralist systems have a wider variety of interest groups
This distinction affects how firms engage politically.
Proposition 3a indicates that firms are more likely to use a relational approach in what type of countries?
More corporatist countries
These nations emphasize cooperation and consensus among interest groups.
Proposition 3b indicates that firms are more likely to use a transactional approach in what type of countries?
More pluralist countries
In these nations, competition among various interest groups influences political strategies.
What are the two levels of participation identified by Moncur Olson?
- Individual action
- Collective action
These levels describe how firms can engage in the political process.
What is an example of individual action in political participation?
A firm lobbying political decision makers
This represents a solitary effort to influence policy.
What is an example of collective action in political participation?
A trade association of firms lobbying political decision makers
This illustrates collaboration among firms to impact policy.
What do larger firms with more slack resources tend to prefer regarding political action?
Individual participation
These firms have the resources to act independently in the political arena.
What does Proposition 4a state about firms with greater financial resources?
They are more likely to use individual participation
This is regardless of whether they choose a transactional or relational approach.
What does Proposition 4b state about firms with fewer financial resources?
They are more likely to use collective participation
This helps them pool resources for political action.
What is Proposition 4a?
Firms with greater financial resources are more likely to use individual participation, regardless of approach chosen.
What is Proposition 4b?
Firms with fewer financial resources are more likely to use collective participation, regardless of approach chosen.
How does corporatism affect political participation?
In corporatist nations, firms are likely to choose collective participation due to the emphasis on consensus and limited opportunities for individual influence.
What do corporatist nations promote in terms of policy?
Corporatist nations promote positive-sum policies rather than negative-sum or zero-sum policies.
What is the likelihood of individual participation in pluralist countries?
Firms are more likely to use individual participation in more pluralist countries.
What are election issues?
Election issues are those that have high public interest and visibility, influencing voter decisions.
Why might firms prefer collective action on election issues?
To limit exposure if the position is unpopular and to build necessary coalitions for support.
What is Proposition 5a?
Firms are more likely to use collective participation in more corporatist countries.
What is Proposition 5b?
Firms are more likely to use individual participation in more pluralist countries.
What is the third decision firms make in political strategies?
The specific strategies and tactics to employ.
What are the three general political strategies based on exchange theory?
- Information
- Financial incentive
- Constituency building
What is the information strategy?
A strategy that seeks to affect public policy by providing policymakers with specific information about policy preferences.
What tactics are involved in the information strategy?
- Lobbying
- Reporting research
- Commissioning research
- Testifying as expert witnesses
- Supplying position papers
What is the financial incentive strategy?
A strategy that influences public policy by aligning the incentives of policymakers with the interests of the firms through financial inducements.
What are some tactics used in the financial incentive strategy?
- Contributions to politicians
- PAC contributions
- Honoraria for speaking
- Paid travel expenses
- Personal service
What is the constituency-building strategy?
A strategy that influences public policy by gaining support from individual voters and citizens.
What tactics are associated with the constituency-building strategy?
- Grassroots mobilization
- Advocacy advertising
- Public relations
- Press conferences
- Political education programs
What distinguishes constituency-building strategy from collective participation?
Constituency-building targets individual constituents rather than joining with other firms or interest groups.
What is the role of political decision makers in the public policy process?
They serve as the agents of citizens and citizen groups, shaping government policies.
What is the significance of information asymmetries in political decision-making?
They create challenges for political decision makers in knowing the preferences of their principals.
What is advocacy advertising?
A form of advertising aimed at influencing public opinion on specific issues
Advocacy advertising is used to induce constituents to express public policy preferences to political decision makers.
What are the three generic categories of political tactics?
- Grassroots
- Advocacy advertising
- Direct targeting strategies
These categories denote the actual strategy taken rather than by whom it is executed.
What is the key determinant of strategy choice in a transactional approach?
The current stage of the issue’s life cycle
The life cycle includes public opinion formation, public policy formulation, and public policy implementation.
What are the three stages in the public policy issue life cycle?
- Public opinion formation
- Public policy formulation
- Public policy implementation
These stages denote where proactive political action is possible.
What does public opinion formation denote?
The stage where issues of concern to business are emerging
Corporations have the opportunity to shape public opinion during this stage.
In which stage are firms likely to use directly targeted strategies?
Public policy formulation stage
This stage involves the introduction of specific regulations or policies affecting business.
What is a relational approach to political action?
An approach that spans across issues and time, focusing on relationships
Key determinants of strategies in this approach are based on the resources at disposal.
What resource affects the success of political behavior?
Credibility
Credibility is crucial for influence in lobbying and public relations.
What is the effect of a large employment base on political tactics?
Increases potential for constituency building
A larger employment base enhances a firm’s ability to form constituency groups.
What is the primary objective during the public policy formulation stage?
The wording, support, or opposition of specific policies
This stage has politicized issues that affect business.
What are the types of strategies identified in the decision-tree model?
- Information strategy
- Financial incentive strategy
- Constituency-building strategy
These strategies are used based on the approach to political action chosen.
True or False: Firms can only use one political strategy at a time.
False
Firms can integrate multiple political strategies simultaneously.
What is the importance of communication in public opinion formation?
It shapes public opinion and influences policy preferences
Effective communication can lead to favorable policy outcomes for firms.
What influences the choice of strategies in a relational approach?
Resources at the firm’s disposal
This includes credibility and employment base.
What is the goal of grassroots mobilization?
To encourage individuals to become politically active on specific issues
This tactic relies on good relations with stakeholders.
What does the decision-tree model depict?
The three decisions of political strategy formulation
It includes participation level, approach to political action, and strategy type.
What is the ultimate goal of constituency building?
To educate individuals on policy and incentivize political contact
This aims to influence the policy process favorably for firms.
What is the main focus of Boddewyn’s 1993 work?
Political resources and markets in international business: Beyond Porter’s generic strategies.
What does the relational view emphasize according to Dyer and Singh (1998)?
Cooperative strategy and sources of interorganizational competitive advantage.
What does the term ‘corporate political strategy’ refer to?
The strategies corporations use to influence government policy and decision-making.
What is the significance of the ‘logic of collective action’ as described by Olson?
It explains how individuals in a group work together to achieve common goals despite personal costs.
According to Porter (1985), what are the two forms of competitive advantage?
- Cost advantage
- Differentiation advantage
What does the term ‘transaction cost economics’ relate to according to Williamson?
The governance of contractual relations.
What does the term ‘corporate political activism’ refer to?
Corporate efforts to influence political processes and outcomes.
What does the ‘political embeddedness’ concept refer to?
The influence of political context on economic transactions.
What does the term ‘stakeholder approach’ refer to in strategic management?
Considering the interests of all parties affected by business decisions.
What are corporate political strategies?
Actions taken by firms to influence public policy decisions.
What is considered a ‘widely salient’ issue?
An issue important to a broad segment of likely voters with coalescing opinions around one or two policy options.
How can activists influence the saliency of public policy issues?
By creating information and reputation cascades that garner public attention.
What is an information cascade?
A process where individuals follow the behavior of others, ignoring their own information due to perceived knowledge of others.
What role do reputation cascades play in public policy issues?
They occur when specialists follow the behavior of others to gain social approval or avoid disapproval.
What is the relationship between issue salience and political action by firms?
Greater issue salience necessitates more aggressive political action by firms.
True or False: Firms can play a role in the process by which issues become widely salient.
True.
What is the difference between ‘widely salient’ and ‘narrowly salient’ issues?
Widely salient issues attract interest from a large segment of voters, while narrowly salient issues are significant only to a limited few.
What is the significance of timing in a firm’s political strategy?
Timing is key, and firms should adopt different strategies depending on the issue’s saliency stage.
Fill in the blank: A widely salient issue requires some degree of _______ in the opinions adopted by individuals in a society.
uniformity
What is a corollary prediction of neoinstitutional theory and information cascade literature?
Individuals may find the consequences of a specific opinion about an issue to influence their behavior.
What example illustrates the incremental process of an issue becoming widely salient?
The tuna fishing techniques affecting dolphins first gained local salience in California before reaching national attention.
What do Hillman and Hitt (1999) propose about firms’ actions on salient issues?
Firms will act collectively rather than individually when issues are highly salient.
What is rational ignorance in the context of voters?
Voters choose to be uninformed about political issues due to high costs of gathering information.
What are the implications of a public issue attaining wide salience?
It suggests a coalescing of voters’ opinions around one or two policy options.
What happens to firms’ market value when they are linked to widely salient issues?
Their market value may decline due to public outcry and potential regulations.
According to Bikhchandani et al., what occurs during an informational cascade?
Individuals follow the behavior of preceding individuals without regard to their own information.
Fill in the blank: Firms may respond to widely salient issues by _______ the link between their products and negative public perceptions.
disputing
What issue became prominent in California in the 1980s regarding tuna fishing?
The killing of dolphins due to tuna fishing techniques
This issue ultimately led to potential legislation and an embargo on Mexican tuna in the early 1990s.
What do individuals do when they find it difficult to evaluate the consequences of a specific opinion?
They look at the number of peers adopting an opinion as a cue about what to do
This is a prediction from neoinstitutional theory and the information cascade literature.
What is a critical factor in explaining why some issues become widely salient?
Access to a wide segment of individuals
This access is key to creating a successful information cascade.
What role do the media play in the development of salient issues?
Media serve as major sources of information and convey opinions of experts
Reporters select and report on expert opinions, influencing public perception.
What influences individuals when choosing whose opinion to adopt?
The credibility or status of information providers
High-status individuals or credible actors can significantly sway public opinion.
What is the sequence of development for widely salient issues?
Experts spread information, reporters relay it to citizens, early converts share opinions
This process can lead to issues like global warming becoming widely recognized.
Why might individuals support protectionism even if it is not in their best interest?
Protection-seeking activists can trigger an information cascade
They may convince rationally ignorant individuals that protectionism benefits them.
How do elected officials typically react to widely salient issues?
They either wait for issues to become salient or act as political entrepreneurs
This behavior reflects their interest in reelection and public opinion.
What constraints do widely salient issues create for elected politicians?
They limit policy choices and increase accountability to public opinion
Elected officials must consider the opinions of a larger voter base.
What example illustrates the impact of widely salient issues on policy decisions?
The opposition to genetically modified foods in Europe
Activist groups influenced public opinion, leading to policy changes against GM foods.
What is the fragility of information cascades?
Imitation processes can produce errors and be reversed by new information
This means that issues may not remain salient if conflicting information emerges.
What is a reputation cascade?
A process where individuals adopt opinions to maintain social status and avoid disapproval
This differs from information cascades, as it is based on social pressures.
What is preference falsification?
The act of conveying a public opinion different from one’s private opinion due to social pressure
This can lead to misinformation among experts and reporters.
What are the three considerations affecting an expert’s or reporter’s public opinion expression?
- Satisfaction from societal decisions
- Rewards or punishments for chosen preferences
- Benefits from truthful self-expression
The second consideration is often the most influential in political strategies.
What are the three considerations influencing an individual’s opinion declaration?
- Society’s decision impact
- Reward or punishment associated with a preference
- Benefits from truthful self-expression
What is the main focus of the political strategy?
Rewards or punishments for a certain position
What types of sanctions or rewards can experts face?
- Ostracism (exclusion) in conferences
- Career hindrance
- Paper publication rejection
- Difficulty in acquiring research support
What is meant by ‘public preference’?
The opinion that an expert or reporter conveys in public
What determines an expert/reporter’s choice to express a public preference?
The falsification threshold
What happens when the collective opinion among experts/reporters reaches the expert’s threshold?
They falsify their public opinion to match the community’s opinion
What is a reputation cascade?
A phenomenon where collective opinions among experts influence reporters and subsequently public opinion
What role do network externalities play in market value?
The value of a product or service depends on the number of users, not just its characteristics
What is the optimal time for firms to act to prevent widely salient issues?
During the formation of a reputation cascade among experts
What is the drawback of ‘early resistance’ or ‘early denial’ as a strategy for firms?
It targets individuals rather than experts or journalists and may raise public awareness of the issue
What is critical for firms to prevent consensus among experts and journalists?
Creating a low initial impact on public opinion
What does the threshold distribution function suggest about public responses?
Social phenomena can generate different public responses in different contexts
What is critical for preventing consensus among experts or journalists?
Creating a low initial impact on public opinion.
This prevents a solidified stance on issues, allowing firms to manage public perception more effectively.
What characterizes social phenomena in the context of public opinion?
Multiple equilibria.
This means that similar phenomena can generate different public responses in various locations.
Give an example of a public issue that has different saliency in the U.S. and Europe.
Genetically modified food.
It is a significant concern in Europe, while it has not been a widely salient issue in the U.S.
What is the key factor in explaining the domination of a collective sentiment?
The initial estimation of collective opinion by experts or reporters.
How can firms influence public opinion regarding salient issues?
By supporting and financing research centers and interest groups opposed to established positions.
What is Proposition 3 regarding reputation cascades among experts?
Firms can impede the development of widely salient issues by supporting interest groups with views both similar and opposed to their own interests.
What are the three types of political strategies identified by Hillman and Hitt?
- Information
- Financial incentive
- Constituency building
Why are political strategies less effective with widely salient issues?
Because likely voters are no longer rationally ignorant and scrutinize political decision makers.
What example illustrates the ineffectiveness of lobbying in the face of salient issues?
Tobacco companies and antitobacco policies.
What negative consequences can firms face when opposing widely salient issues?
Damage to reputation and negative attitudes from customers.
What is Proposition 4 regarding political strategies?
Political strategies successful at influencing narrowly salient issues are likely to be unsuccessful at influencing widely salient issues.
How can firms change the distribution of thresholds among experts?
By reinforcing sanctions and rewards associated with the expression of a given opinion.
What can firms do to support their positions on issues?
Finance interest groups with research activities that support the firms’ views.
What is Proposition 5 regarding experts’ thresholds?
Firms may change the threshold at which experts decide to falsify their personal opinion by financially supporting new research.
How can firms influence reporters’ thresholds?
By providing them with primary information about the issue.
What is Proposition 6a about changing reporters’ thresholds?
Firms may change the threshold at which some reporters falsify their personal opinions by providing primary information.
What is a potential disadvantage for well-known brands when trying to influence reporters?
It may be difficult to change reporters’ thresholds due to their incentive to generate interesting stories.
What is Proposition 6b regarding well-known brands?
Changing the threshold at which reporters falsify their personal opinions by providing information is less likely to work for well-known brands.
What role do reporters play in an information cascade?
They can limit the diffusion of expert opinions by reporting contrary information.
What is Proposition 6c about strategies for changing thresholds?
It is important to complement a strategy of changing the threshold among experts with a strategy of changing the threshold among reporters.
What is self-regulation in the context of responding to salient issues?
Voluntarily limiting activities that cause social harm to meet demands from activists.
What is a benefit of self-regulation for firms?
It can preempt directives from activists and reduce issue saliency.
What is Proposition 7 regarding self-regulation?
A self-regulation strategy complemented with a strategy of modifying reporters’ thresholds is likely to be successful.
What does Proposition 7 suggest about self-regulation strategies?
A self-regulation strategy complemented with a strategy of modifying reporters’ thresholds is likely to be successful at responding to widely salient issues.
Which actors drive the development of widely salient issues according to the text?
Political actors such as interest groups, trade unions, or NGOs.
What two mechanisms can lead to the formation of a wave of opinion among voters?
- An individual’s adoption of others’ behaviors or beliefs through ignorance
- The adoption of others’ position on an issue to maintain a reputation or social status.
What is the significance of reputation cascades in public opinion formation?
Reputation cascades among experts and journalists can drive likely voters to support a similar opinion, influencing policy makers.
How does the text differentiate political strategy formulation for widely salient issues from narrowly salient issues?
The strategies for widely salient issues will take on fundamentally different answers compared to those for narrowly salient issues.
What traditional political strategies may be ineffective for widely salient issues?
- Lobbying
- Campaign contributions
- Constituency building.
What critical considerations should firms keep in mind to prevent widely salient issues?
- Timing
- Sponsoring interest groups and experts with similar and opposing views.
When reacting to a widely salient issue, what initial strategy can firms employ?
Firms can try to break the information cascades by providing the public with factual information contradicting the prevailing opinion.
True or False: Self-regulation or public relations actions are likely to prevent the occurrence of widely salient issues.
False.
What does the resistance-collaboration axis in corporate political strategies imply?
Firms can develop strategies at different stages of the process to change the course of widely salient issues.
Fill in the blank: The concept of _______ asserts that repetition of an issue position is the best means to ensure its acceptance over time.
[Kuran’s theory of repetition]
According to the text, what role do think tanks play in the development of widely salient issues?
Think tanks can affect the development of widely salient issues and vary across institutional settings.
What factors may influence the role of reporters in creating widely salient issues?
- Ideological position of newspapers
- Differences in media operations across countries.
What is a critical action firms can take if time is critical when reacting to a salient issue?
Firms may also self-regulate or voluntarily limit the activity seen as causing social harm.
What is the relationship between widely salient issues and public policy according to the text?
Widely salient issues reduce the rational ignorance of likely voters, creating constraints for firms and policymakers.
What impact do NGOs have on global business according to Spar and La Mure?
The power of activism
Published in California Management Review.
