Government & Business

business in politics– question is whether, and to what extent should businesses be involved (in many other countries, businesses are allowed to engage in political discussion, influence political races, and introduce/contribute to the drafting of laws and regulations)

arguments 4 business in politics– a  pluralistic system invites many participants (special interest groups involved), economic stakes are high for firms, business counterbalances other social  interests, business is a vital stakeholder of government

arguments against business – managers not qualified to engage in political debate, business is to big and too powerful (elephant dancing among chickens), business is too selfish to care about the common good, business risks its credibility by engaging in partisan politics

interest groups­ – ex: labor unions like the FOP (fraternal order of police)

ad hoc coalitions – two or more diverse groups brought together to organize for or against particular legislation or regulation (ex: daylight savings time: barbecue industry wants to add weeks to improve sales of grills, Air Transportation Association said it puts US international flights out of sync w/ European schedules- Bush signed National Energy Plan (2006) to extend DST for 4 weeks and save energy)

corporate political strategy- activities taken by organizations to acquire, develop, and use power to obtain an advantage

corporate political strategy types: information strategy– businesses seek to provide gov. policy makers w/info to influence actions such as lobbying

financial-incentives strategy– businesses provide incentives to influence gov. policy makers to act a certain way, such as making a contribution to a political action committee that supports the policymaker

constituency-building strategy/ grass  roots strategy– businesses seek to gain support from other affected organizations to better influence gov. policy makers 

lobbying (most used political action tool)– representing a business before the ppl and agencies involved in determining legislative and regulatory outcomes; involves direct contact w/ a gov. official to influence the thinking or actions of that person on an issue or public policy; gifts cannot exceed $100 a year from a particular source; #1 biggest lobbying expenditures = lawyers 

revolving door– circulation of individuals b/n business and gov. (businesses sometimes hire former gov. officials as lobbyists and political advisors); favoritism toward old employers sometimes evident (unethical) 

lobbying types: expert witness testimony– CEOs/other executives give testimony at public forums (data, facts, anecdotes)

direct communications– businesses inviting gov. officials to visit their facilities, give speeches to employees, and participate in activities that will allow them to see the concerns of management and employees

Business Roundtable– one of most effective organizations at promoting direct communications; (1972) CEOs of leading organizations; it studies public policy issues and advocates for laws that it believes “foster economic growth and a dynamic global economy”

financial-incentive types: political action committee– independently incorporated organizations that can solicit contributions and then channel those funds to candidates seeking political office

pacs can only give $5,000 per candidate and $15,000 to a national committee per year

economic leverage– business uses its economic power to threaten to leave a city/state/country unless a desired political action is taken; also can be used to persuade a gov. body to act in a way that favors the business

constituency-building types: stakeholder coalitions – businesses trying to influence politics by mobilizing organizational stakeholders, like employees, stockholders, customers, and local community to support their political agenda

advocacy advertising – creating advocacy ads/issue ads that focus on company’s view on controversial political issues; ex: Pharmaceutical Research and Manufacturers Association got drug benefits extended to Medicare recipients,

public relations and trade associations – coalitions of companies in the same or related industries, who coordinate grassroots mobilization campaigns (ex: US Chamber of Commerce – more than 200,000 companies),

legal challenges – business seeks to overturn a law or challenges its legitimacy in court

levels of political involvementaggressive– (direct/personal) executive participation, involvement w/ industry working groups and ask forces, public policy development

moderate – (indirect/personal) organizational lobbyist, employee grassroots involvement, stockholders and customers encouraged to be involved

limited – (indirect/impersonal) contribution to political action committee, support of trade association or industry activities

bundling- moderate technique; company solicits contributions from stockholders and gives it to the candidate

campaign finance reform– running for political office becoming too expensive; proposes Bipartisan Campaign Reform Act to help; ban on soft money (unlimited contributions to national political parties by individuals or organizations for party-building activities) (Haim Saban of Saban Entertainment gave most – $9 million to democrats)

527 organizations– groups organized under section 527 of the IRS tax code for the sole purpose of influencing elections

Japan– political actors are big business, agriculture, and labor

guanxi– relationship b/n business and gov in China that must be established before lobbying can occur

reform abroad– limits on expenditures, contribution limits, disclosure regulations, bans against certain contribution and expenditure types, measures designed to encourage donations (tax relief), subsidies in kind, public subsidies

Starbucks– involved in politics when facing rising health care costs andbarriers to expansion into Central America and Southeast Asia; hired lobbyists to lobby for export tax breaks; in 2006, kicked political ppl out of Starbucks saying it prohibits political meetings; trying to stay out of politics