Social movements and corporate political activity: Managerial responses to socially oriented shareholder activism

2019 ◽  
Vol 95 ◽  
pp. 156-170 ◽  
Author(s):  
Michael Hadani ◽  
Jonathan P. Doh ◽  
Marguerite Schneider
Keyword(s):  
Social Movements ◽  
Shareholder Activism ◽  
Political Activity ◽  
Corporate Political Activity

Corporate Political Activity and Regulatory Capture: How Some Companies Blunt the Knife of Socially Oriented Investor Activism

2016 ◽  
Vol 44 (5) ◽  
pp. 2064-2093 ◽  
Author(s):  
Michael Hadani ◽  
Jonathan P. Doh ◽  
Marguerite A. Schneider
Keyword(s):  
Shareholder Activism ◽  
Securities And Exchange Commission ◽  
Political Activity ◽  
Social Movement Organizations ◽  
Regulatory Capture ◽  
Corporate Political Activity ◽  
Nonmarket Strategy ◽  
Labor Policies ◽  
The Status ◽  
The Impact

Socially oriented shareholder activism is an increasingly important mechanism through which social movement organizations seek to influence the private sector by exerting pressure on corporate activities in areas such as human rights, environmental protection, and labor policies. This activism challenges the status quo of targeted firms and potentially their institutional field, disrupting “business as usual” and often drawing negative attention to the firms. We theorize that some firms might use corporate political activity (CPA) as an indirect, nonmarket strategy aimed at regulatory capture to reduce the impact of such disruptions. We focus on one popular avenue of shareholder activism—the proxy proposal mechanism—and the role the Securities and Exchange Commission (SEC) plays in allowing omission of socially oriented shareholder proposals from the proxy ballot. Using two distinct data sources, we find evidence that for S&P 500 firms, the SEC allows for the omission of the proposals from proxy ballots more frequently for those firms more active in CPA. These findings inform the growing scholarship on socially oriented activism as well as suggest the indirect influence of CPA on government agency decision making.

scholarly journals Corporate Political Strategies in Weak Institutional Environments: A Break from Conventions

2019 ◽  
Vol 161 (4) ◽  
pp. 855-876
Author(s):  
Tahiru Azaaviele Liedong ◽  
Daniel Aghanya ◽  
Tazeeb Rajwani
Keyword(s):  
Resource Dependency ◽  
Emerging Countries ◽  
Policy Implications ◽  
Political Activity ◽  
Dark Side ◽  
Political Strategies ◽  
Corporate Political Activity ◽  
Corporate Political Strategies ◽  
Shed Light ◽  
Universal Application

Abstract There is a lack of research about the political strategies used by firms in emerging countries, mainly because the literature often assumes that Western-oriented corporate political activity (CPA) has universal application. Drawing on resource-dependency logics, we explore why and how firms orchestrate CPA in the institutionally challenging context of Nigeria. Our findings show that firms deploy four context-fitting but ethically suspect political strategies: affective, financial, pseudo-attribution and kinship strategies. We leverage this understanding to contribute to CPA in emerging countries by arguing that corporate political strategies are shaped by the reciprocity and duality of dependency relationships between firms and politicians, and also by advancing that these strategies reflect institutional weaknesses and unique industry-level opportunities. Importantly, we shed light on the muttered dark side of CPA. We develop a CPA framework and discuss the research, practical and policy implications of our findings.

scholarly journals With other people’s money: Campaign financing as an agency problem

2019 ◽  
Vol 45 (1) ◽  
pp. 40-49 ◽  
Author(s):  
Marina Amado Bahia Gama ◽  
Gisele Walczak Galilea ◽  
Rodrigo Bandeira-de-Mello ◽  
Rosilene Marcon
Keyword(s):  
Agency Theory ◽  
Political Campaigns ◽  
Political Activity ◽  
Corporate Political Activity ◽  
Listed Firms ◽  
Electoral Campaigns ◽  
Earning Quality ◽  
Campaign Financing ◽  
Harmful Effects

Agency theory explanations for corporate political activity assume that managers distort resource allocation to invest in political connections to pursue personal benefits. While distorted resource allocations yield poor earning quality, we expect that companies with efficient governance may curb this opportunistic behavior. We used matching procedures to identify the effects of financing political campaigns on the earning quality of the firm. We assembled an original panel of listed firms in Brazil from 1998 to 2013. We found that firms that donated to electoral campaigns had a lower earning quality than nondonor firms. Firms with superior corporate governance instruments were able to reduce the harmful effects on earning quality. These results support the tenets of agency theory in explaining why firms engage in politics.

Wining and Dining Government Officials: What Drives Political Networking in Chinese Private Ventures?

2020 ◽  
Vol 16 (5) ◽  
pp. 1084-1113
Author(s):  
Jianjun Zhang ◽  
Pei Sun ◽  
Kunyuan Qiao
Keyword(s):  
Emerging Economies ◽  
Resource Dependence ◽  
Institutional Environment ◽  
Resource Dependence Theory ◽  
Political Activity ◽  
Corporate Political Activity ◽  
Dyadic Relationship ◽  
Political Actors ◽  
Government Relations ◽  
The Government

ABSTRACTManagerial networking with political actors has long been recognized as a crucial co-option strategy to navigate the challenging institutional environment in emerging economies. However, we know much less about what drives the variation of political networking investment by private ventures. Drawing on resource dependence theory, we unpack the dyadic business-government relations and identify the key organizational and environmental factors that shape the power dependence relationships between private ventures and the government. By examining power imbalance and mutual dependence in this dyadic relationship and considering both the necessity and the capability of political networking, we develop hypotheses regarding the ways in which size-, connection-, and location-based dependencies affect firms’ political networking intensity. These hypotheses are tested through a unique survey of Chinese private ventures. Our study finds that political networking intensity (1) has an inverted U-shaped relationship with firm size, (2) is negatively associated with the presence of embedded political ties while positively associated with that of achieved political connections, and (3) is smaller when the focal firm is located in business development zones. This research bears rich implications for our understanding of corporate political activity in emerging economies from a resource dependence lens.

Vices and Virtues of Corporate Political Activity

2007 ◽  
Vol 48 (1) ◽  
pp. 105-132 ◽  
Author(s):  
Saku Mantere ◽  
Kalle Pajunen ◽  
Juha-Antti Lamberg
Keyword(s):  
Political Activity ◽  
Corporate Political Activity

Corporate Politics in the Public Sphere: Corporate Citizenspeak in a Mass Media Policy Contest

2017 ◽  
Vol 59 (4) ◽  
pp. 579-611 ◽  
Author(s):  
Daniel Nyberg ◽  
John Murray
Keyword(s):  
Public Sphere ◽  
Common Good ◽  
Mining Industry ◽  
Political Activity ◽  
Corporate Political Activity ◽  
Political Actors ◽  
The Public ◽  
The Common Good ◽  
The Common ◽  
The Public Sphere

This article connects the previously isolated literatures on corporate citizenship and corporate political activity to explain how firms construct political influence in the public sphere. The public engagement of firms as political actors is explored empirically through a discursive analysis of a public debate between the mining industry and the Australian government over a proposed tax. The findings show how the mining industry acted as a corporate citizen concerned about the common good. This, in turn, legitimized corporate political activity, which undermined deliberation about the common good. The findings explain how the public sphere is refeudalized through corporate manipulation of deliberative processes via what we term corporate citizenspeak—simultaneously speaking as corporate citizens and for individual citizens. Corporate citizenspeak illustrates the duplicitous engagement of firms as political actors, claiming political legitimacy while subverting deliberative norms. This contributes to the theoretical development of corporations as political actors by explaining how corporate interests are aggregated to represent the common good and how corporate political activity is employed to dominate the public sphere. This has important implications for understanding how corporations undermine democratic principles.

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