Category: Lobbying

With specific reference to the Oval Office, to what degree has this institution been a source of controversy over the past half century?

Over the past 50 years, the US presidency has been involved in several scandals and corruption cases that gave rise to controversy and concerns both within American society and amongst US partners (Meinke, Anderson, 2001). With the election of Donald Trump as the 45th president of the United States in November 2016, this phenomenon has become more pronounced. Indeed, the role he played in polemics as well as his sexist behaviour sparked strong reactions from the public opinion and resulted in him ranked the worst president in US history by nearly 200 political scientists (Shugerman, 2018). However, these scandals raise a real problem of consistency with the presidential function. As a matter of fact, one of the main missions of the President of the United States are to act as the symbolic leader of the country as the Chief of State, representing the US population’s interests, and negotiating with other countries as the Chief Diplomat (Bailey, Shafritz, 1988). Therefore, Americans expect popular and powerful presidential leadership able to solve the nation’s issues; instead, they are intrinsically suspicious of ‘strong centralised leadership and the abuse of power’ (Cronin, Genovese, 2004: 4). Furthermore, from an institutional approach, ‘the changes in the ways presidents structured the White House Office; variations in the number, types, and sizes of other agencies within the Executive Office of the President’ has led to an increase in the distrust of citizens toward the US presidency (Blakesley, 1995: 5). That is why this essay argues that, over the past half century, the Oval Office, the symbol of the US Presidency, is an institution that has been the focus of intense controversies. Firstly, the following paper explores how the several political scandals involving the President’s administration affect public opinion. Then, it is shown how the President’s inaction toward bureaucracy and the Congress’ paralysis fosters controversies. Finally, it is examined how the systemic corruption brought on by lobbying destroys the credibility of the Oval Office.

To begin with, it is undeniable that political scandals that involve the Oval Office have a serious negative impact on public opinion which subsequently becomes hostile. This phenomenon is all the more accentuated when the President tries to mask the truth (Kagay, 1999). One of the most controversial affairs of the modern American political scene is the Watergate case. Indeed, President Nixon ordered the intrusion of the Democratic National Committee headquarters at the Watergate office complex in Washington, D.C (Kutler, 2010). Although the act itself was bad, it was the ensuing concealment attempted by the Nixon administration that became very infamous, with Nixon’s unwillingness to relay evidence eventually leading to the threat of impeachment and Nixon’s resignation, the only president ever to resign from office (ibid.). Therefore, many searchers have shown that the revelations of the Watergate controversy increased negative evaluations of Nixon, the government, and the presidency (Zimmer, 1979). Another notorious corruption case implicating the US president is the Iran-Contra affair. Indeed, President Reagan’s senior administration officials secretly expedited the arms sales to Iran, and the initiative was further aggravated when funds from the sale of arms were used to fund anti-communist death squads in Nicaragua (Pearce, 1988). Unlike in the Watergate case, there is no evidence that the president tried to block F.B.I. agents from carrying out their mission or commanded witnesses to lie, nonetheless, his administration has been accused of sabotaging the investigation by destroying evidence (Yoo, 2017). Once again, this scandal affects the personality cult around the president. One would think that the number of presidential scandals would decrease over time but, nowadays, President Trump is involved in several cases including the Russiagate. The latter’s campaign team is accused to have interfered in the 2016 election by encouraging Russians to hack US democrats and to discredit Hillary Clinton (Borger, 2017). Moreover, Paul Manafort, Trump’s former campaign manager, was found guilty of fraud, and, on the day he was convicted, ‘Trump’s former long-time lawyer, Michael Cohen, pleaded guilty in a federal court in New York to […] campaign finance violations for paying hush money to women who allege affairs with Trump in the past’ (Walters, 2018). Therefore, all these facts explain why Trump’s approval rating is at the lowest of his presidency with 60% disapproving of his performance as the US president (ibid.). Consequently, these examples of presidential scandals confirm that the Oval Office has been a source of controversy over the past half century.

However, presidents, by using ‘partisan presidency’ approach, can maintain a great popularity within their party (Bailey, Shafritz, 1988). Indeed, since 1980, one has witnessed the emergence of this new type of presidency which consists in polarising the electorate along partisan and ideological lines (Skinner, 2008). This resulted in an increasing ‘approval gap’, namely ‘the difference between the approval given to a president by his partisans as opposed to that given by members of the other part’, up to 40 points or more (ibid.: 606). The first elements of partisan presidency emerged under President Reagan who took action to remake the Republican Party in his conservative image and to make it regain its majority status (Galvin, 2013). Indeed, for Skinner, strong parties ‘often serve as cults of personality adoring the occupant of the Oval Office’ (Skinner, 2008: 621). This ‘partisan presidency’ helped Reagan acquire a great popularity within his party and a good approval rate reaching more than 60% at the end of his mandate, thus not reflecting the impact of his controversies on public opinion (Lanoue, 1989). Furthermore, President George W. Bush has brought this partisanship to a new extreme and can be seen as the most partisan US president (Skinner, 2008). Indeed, he is the first president whose approval gap exceeded 70 points and to receive ‘more than 90 percent approval among Republicans, making him one of the most popular presidents ever with his own party’ (ibid.: 611). This can be explained by the fact that Bush ‘maintained a surprising hold over congressional Republicans, especially on the issue of the Iraq War’ that has divided the American public opinion along partisan lines more than any previous conflict in the history (ibid.: 609). Consequently, despite controversies over decisions taken by Bush administration during the Iraq War, the President maintained a good appearance, especially within his political party.

Nevertheless, it is often claimed that one lives in a ‘post-truth’ world, where authorities and facts are no longer trusted, and information is dominated by ‘fake news’ (Mudde, 2018). The latter term refers to ‘the deliberate presentation of (typically) false or misleading claims as news, where the claims are misleading by design’; moreover, this kind of news is masterfully manipulated to reach the widest audience possible often via social networks (Gelfert, 2018: 85-86). As a matter of fact, this phenomenon has become a matter of real controversy since the election campaign of Donald Trump in 2016. Indeed, he ‘ran an entire campaign on fake news’ in which he ‘continually spread rumours [and] false news […] on his Twitter feed and in his campaign speeches (Kellner, 2017: 100). Furthermore, as President of the USA, he still uses fake news to justify his position and actions which is regarded negatively by Americans who ‘consider “fake news” a very serious threat to […] democracy’ (Gallup, 2018: 3). Indeed, President Trump ‘wields the phrase creatively, […] as an adjective to append to individual outlets that offend him and as a weapon with which to diminish confidence in those who hold power to account’ (Edgecliffe-Johnson, 2018). Therefore, this once again demonstrates that the Oval Office is at the heart of major controversies.

Secondly, another issue giving rise to controversy is the president’s inaction towards what is called the ‘congressional paralysis’ but also towards bureaucracy which is perceived as harmful to the societal well-being (Twombly, 2013). First, according to Neustadt, the US presidency has grown weaker against the legislative paralysis gripping Congress (2001). The latter is said to be both a consequence and cause of cross-party, as well as internal party divisions (Gay Stolberg, Shear, 2018). Indeed, the Republicans are clearly disagreeing with both the Democrats and each other over the environment, social questions, and the different degrees of libertarianism that need to be adopted (Agiesta, 2017). In the same way, the Democrats are hardly a homogeneous union of members: in a divisive context of increasing socio-economic inequality, there are both partisans of centre-left and centre-right within the party (ibid.) Therefore, from all this, one can question the existing system and deduce that the Oval Office should adopt a stronger-arm approach when Congress or Senate do not find a consensus on the country’s issues (Bailey, Shafritz, 1988). Unfortunately, a recent relevant example of the president’s inaction towards this congressional paralysis is the ‘Dreamers’ case. As a matter of fact, the failed deal over Dreamers’ future has been at the heart of US government shutdown in January 2018 which has caused many controversies (Gambino, 2018).

Nonetheless, one has to bear in mind that Americans currently live in an era of ‘presidential law-making’ (Love, Garg, 2014). Firstly, it is necessary to explain this term. Although, it seems like a basic notion, it is quite difficult to evaluate ‘where law-making ends and where law execution begins’ (Easterbrook, 1990: 545). According to the Supreme Court, ‘law-making’ describes the activity that Congress cannot perform ‘except in the manner prescribed in the presentment clauses of the Constitution’ (ibid.: 545). However, by defining ‘law-making’ in that way, the Supreme Court implicitly upholds Congress’ capacity ‘to delegate that power to the executive branch’ (ibid.: 545). Therefore, the President is able to participate in the law-making process in several manners (Easterbrook, 1990). Indeed, among others, the President has a veto power over Congress’ decisions; the pardon power which alters the legal rights of people; the power to make treaties subject to congressional concurrence that, under the Constitution, become the law of the land; and, finally, the power not to enforce or defend a statute in the courts, a decision that can practically nullify a law (ibid.). Consequently, regarding the President’s inaction towards the ‘congressional paralysis’, the last point is decisive since one can notice that this inaction may be a deliberate choice which reinforces the Oval Office’s controversial nature.

But one of the most contentious issues concerns the way the President oversees and deals with bureaucracy. At the most elementary level, the latter ‘is defined as rule or government by bureau or department’ (Twombly, 2013: 117). It must be stressed that bureaucracy is very vast in the U.S., indeed, ‘more than 2.5 million people work across the entire executive branch of the US government in hundreds of agencies and commissions’ (West, 2015). This figure can thus explain why Americans are increasingly afraid of both the importance of the ‘bureaucratic state’ and the corruption of government official surrounding the President, as a matter of fact, ‘three out of four Americans feel corruption is “widespread in government”’ (Gingrich, Wise, 2016). Therefore, the American people expect the President to take action on this matter since they ‘fear the abuse of government bureaucracy to serve, not the public will, but to benefit a small group or an individual at their expense’ (Twombly, 2013). However, despite the initiatives taken, one can notice the President’s powerlessness over this issue. Indeed, for Francis Rourke, all the recent efforts made by the Oval Office to establish unilateral control over executive agencies have failed and ‘the idea of total control lies in a field of dreams’ (1993: 690). Consequently, the debate surrounding the American government’s bureaucratic nature once more puts the President at the heart of strong controversies.

Lastly, examining the systemic corruption brought on by lobbying activities is significant when one studies the Oval Office’s corrupt activities. Senator Caraway, in a bill passed by the Senate, defines lobbying as “any effort to influence Congress upon any matter coming before it, whether it be by the distribution of printed matter, appearance before committees of Congress, interviewing or seeking to interview individual members of the Senate or House, or by any other means” (Logan, Patten Fellow, 1929: 1-2). Therefore, yet again, one expects the President to design regulatory tools, without which people remain exposed to the big firms and economic groups’ interests (McKay, 2013). Nevertheless, the opposite situation has occurred with various US Presidents who have tended to increase annual federal spending thus increasing the chances of lobbying (Boaz, 2018). As a matter of fact, the amount of money spent by firms on lobbying severely increased after both President Bush’s trillion-dollar stimulus bill and President Obama’s healthcare reorganisation (McKay, 2013). Furthermore, President Trump has provided a strong support to the NRA, the leader of gun lobby, which has provoked heated reactions and controversies (Beckett, 2018).

However, it is true that most presidents make public announcements in which they pledge to restrict lobbying activities (Maiello, 2009). Indeed, it is known that bribery and lobbying are intertwined even though there are plenty of papers trying to draw the line between corruption and legitimate issue advocacy (ibid.). That is why, during his campaign, Obama repeatedly promised that lobbyists ‘would not run his White House’ and on his first full day as president in 2009, ‘he issued two executive orders and three presidential directives that included strict limits on the work that former lobbyists would be able to do in his administration’ (Wheaton, 2016). Additionally, at the beginning of his term in office, President Trump signed a lifetime foreign-lobbying ban for his administration’s members, but also a five-year ban for all other lobbying (Miller, 2017). Overall, these measures demonstrate the willingness of the Oval Office to ‘drain the swamp of government corruption’ (Kessler, 2017).

Nonetheless, these initiatives are not credible because one can identify several weaknesses in their application. As a matter of fact, Trump’s commitment to eradicate corruption in Washington, D.C. has wavered since he has hired ‘top donors to his campaign for administration jobs, while relying on industry lobbyists for both his transition and administration staff’ (Miller, 2017). Moreover, as a senior administration official confirmed, his five-year ban would not prevent lobbyists from joining the presidential administration, indeed, the ban is ‘not about your past, it’s about your future’ (ibid.). Furthermore, President Obama’s announcement that nobody on the White House staff is allowed to work on issues touching on areas where they had previously worked as lobbyists provoked some controversies because some members of his staff did have some lobbying experience and were obviously best qualified to work in the areas where they worked as lobbyists (Maiello, 2009). For instance, William Corr, who Obama wanted at Health and Human Services, had lobbied for Tobacco Free Kids before (Frates, 2009). In addition, for Harstad and Svensson, the Oval Office’s members are not trustworthy when they promise not to extort bribes ‘because corrupt deals are not enforceable in courts and because firms deal with different officials over time (2011: 46). Consequently, this clearly demonstrates that the Oval Office, the symbol of the US Presidency, is an institution that has been at the heart of strong controversies to this day.

By considering the impact of the several political scandals involving the President’s administration on the public opinion, then how the President’s inaction toward both bureaucracy and the Congress’ paralysis fosters controversies, and, finally, how the systemic corruption brought on by lobbying destroys the credibility of the Oval Office, it therefore seems that the latter is an institution that has been the focus of intense controversies over the past half century. Indeed, history has shown that all US presidents have crossed the line into grey areas or illegal activities sometimes to achieve their personal goals. This raises the question of the extent to which the President respects US democratic values and is not considered a despot. Therefore, it would be of great interest to see if, in the future, the Constitution will be reinforced towards the presidential function in order to better regulate it and minimise the risk of controversy.

References

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The concept of lobbying means influencing state authorities in the interest of certain political, economic or social groups.

In Poland, the term ‘lobbying’ appeared in public debates after 1989 and immediately took on a pejorative meaning. He was associated with corruption, behind-the-scenes dealing with cases and breaking the law. A negative look at the issue of lobbying is also influenced by the way it is presented in the media. It rarely appears as an integral component of democracy, it is shown rather in the context of scandals and scandals.

Regulations regarding lobbying can be found in the Constitution, which is not directly applicable to this phenomenon, but it regulates issues that remain closely related to it. It is mainly about the right of citizens to obtain information about the activities of public authorities within the meaning of art. 61 of the Constitution, which requires access to documents and access to meetings of collegial public authorities coming from general elections (including the Sejm and the Senate) or the possibility of recording sound or images during these meetings.

Lobbying should also be seen as a phenomenon related to the constitutional principle of a democratic state of law (Article 2), freedom of economic activity (Articles 20 and 22) and dialogue and cooperation between social partners (introduction to the Constitution, Articles 20 and 59 (2) ), freedom to express their views and to obtain and disseminate information (Article 54 paragraph 1), as well as the constitutional right to submit petitions, applications and complaints in the public interest, own or other person with its consent to public authorities (art. 63) or the principle of openness of the work of the Sejm (Article 113) and the Senate (Article 113 in conjunction with Article 124). Direct regulation in the field of lobbying is the act on lobbying in the law-making process, which introduces two definitions: lobbying activities and professional lobbying activities. The first is by definition very wide and considers ‘any action by legally permitted methods aimed at influencing public authorities in the law-making process’ for lobbying. It can therefore be concluded that its scope also includes activities constituting elements of civil and social dialogue and civic participation in the law-making process.

However, the specific provisions of the Act relate only to professional lobbying activities, ie variations of lobbying for a fee, on the basis of a civil law contract or as part of a business activity. The Act also defines a number of duties of a professional lobbyist as well as his certain rights, while omitting the lobbying activity of occasional lobbying.

Introduction

Corporate social performance (CSP) refers to the outcomes of corporate social responsibility (CSR) initiatives. These initiatives may include the practices and principles that businesses employ in their relation with certain stakeholders, such as communities, organizations, or institutions. The economic and political sphere has become more integrated with the growth of globalization, and businesses have consequently become more politically active in their CSP initiatives.

In this essay I will provide an overview of the concept of CSP and how this relates to CSR, as well as the types of CSR programs businesses often engage in. I will look at the ethical considerations of CSP and how this relates to the corporate political activity (CPA) of a company. In this vein, I will refer to the Chinese business world as a case study and how “window dressing” becomes a disingenuous form of political activity. Thereafter, will we look at how CPA emerges as either one of two theories, namely nonmarket strategy theory or as political CSR theory. In order to expand on the concept of CPA, I will discuss the increasing responsibility businesses have to engage in CPA initiatives, as a form of CSR. I will consider common lobbying strategies that businesses employ as a form of CPA.

Overview Lobbying Strategies in Corporate Social Performance (CSP)

CSP is a term closely related to corporate social responsibility (CSR), corporate citizenship, and corporate social responsiveness. CSP refers to the outcomes of business activity in relation to stakeholders. CSP is essentially a criterion that measures the results of business conduct in terms of its CSR (Wood, 2009:50). CSP can there for be measured by the extent to which a business’s social responsibility measure up to the expectations of relevant stakeholders.

Since the 1960s, there has been increasing pressure on business undertakings and its consequences on a larger scale or on external stakeholders. CSR can emerge as a variety of internal or external pressures. Internally, CSR can emerge as a result of commitments by executives or investors. Externally, CSR can emerge because of government requirements or, more broadly, in order to improve social credence (Weaver, Trevino & Cochran, 1999). CSP is often advanced by way of environmental programs, charity initiatives, community development, and welfare plans. A common similarity amongst CSR programs is the establishment of initiatives that creates sustainable development.

Research on the CSP of businesses indicates two conflicting theories with regards to business conduct and relations to both shareholders and stakeholders. United States businesses, on the one hand, organizes corporate governance towards “shareholder wealth maximization” and profit maximization (McGuire, Dow & Argheyd, 2003, p. 341). On the other hand, CSR theories concentrate on the necessity for businesses to prioritize the business’s interactions to “a wider range of implicit and explicit stakeholders” (et al., 2003, p. 341). A business’s governing processes and direction can influence its CSP development, but a study by McGuire et al. (2003) indicates that financial incentives and corporate governance does not affect preemptive CSP measures as much as commonly expected.

Ethics of CSP: The Politics of “Window Dressing”

Businesses act on pressures to integrate CSR initiatives in many different ways. Incentives for advancing business CSP ultimately comes down to the ethical standpoints of the corporate governance. Business may, for instance, engage in meaningful CSR practices; these practices are incorporated into the regular and everyday routine of the business and advance real social good. These CSR initiatives are integrated into the way in which the business runs; it influences business decision-making and policies and often have special units dedicated to its advancement (Weaver, Trevino & Cochran, 1999).

On the other hand, businesses may engage in CSR programs that are often labelled as “window dressing”. These programs are disingenuous initiatives and can be easily separated from business administration. “Window dressing” initiatives are questioned for its actual effectiveness in advancing social good. These initiatives are not incorporated into the organization of a business, is marginalized from business operations, and serve as a smokescreen or frontage – most often with the purpose of avoiding CSR regulatory policies and maximizing profit (et al., 1999).

Chinese companies serve as a good example of “window dressing” CSR. The Chinese corporate world is well-known for its widespread utilization of cheap labor, sweatshops, and environmental pollution. CSP of many Chinese businesses have therefore been called into question and labelled as mere “window-dressing” CSR programs. In recent years, external pressure has forced many companies into advancing CSP, incentivizing companies to improve the poor image of Chinese companies internationally. The government has therefore predominantly participated in enforcing ethical policies, such as inserting CSR requirements into Chinese Company Law and requiring state-owned enterprises to abide to certain CSR standards (Lin, 2010).

The lack of CSR in Chinese companies started with the massive increase in economic growth since the 1980s. Radical profit maximization objectives, as well as incentives for foreign investment, aggravated the issue of a growing “culture of corporate irresponsibility” (Lin, 2010, p. 91). This culture disregarded the CSP of businesses and came at terrible environmental and social costs – such as widespread poverty as a result of cheap labor and unfair labor practices, as well as air pollution and water pollution that has led to countless deaths.

Most notably, a lot of research indicates that this lack of CSR embedded in the Chinese business culture is closely related to the political atmosphere of the country, particularly its commitment to a traditional communist economic model. The political influence of the communist government’s intervention in its economy has been a major determinant of the lack of CSP in the corporate climate. Furthermore, the effects of the environmental degradation and unfair labor practices has led to social unrest and instability.

Regardless of the variety of CSR policies that the government has implemented, there is a shortcoming of implementation measures taken by most businesses. This shortcoming is a consequence of the political activity of the country and the government’s stance on CSR which leads to “mandatory CSR initiatives [that are] largely unenforced” (Lin, 2010, p. 96). Equally, the majority of Chinese businesses CSP is constituted by “window dressing” type practices that are made possible by the government’s lack of enforcement.

Corporate Political Activity: Nonmarket strategies & political CSR

The Chinese case study is a good example of how the government in a country can assist the operations of businesses by allowing for disingenuous or a lack of CSR, thereby directly affecting the political activity in a country. The demarcation between the political domain and the corporate domain has become increasingly blurred, especially as businesses have become more involved in the political activity.

Corporate political activity (CPA) refers a variety of actions that businesses can take in order advance CSR objectives. These actions can be described as political strategies that businesses undertake, including activities such as lobbying, hosting political fundraisers, and contributing to political campaigns and advertising (Lock & Seele, 2018). Businesses may engage in CPA for two reasons: firstly, in order to advance economic or profit-making objectives by means of nonmarket strategies or, secondly, to engage in CSR activities and thereby gain a political voice on certain public issues.

Lock and Steele (2018) notes that it is important to distinguish between two theories that describes the political activity that businesses engage in. These two theories are nonmarket strategies and political CSR – both theories are common in their activities, but their theoretical foundations are different and quite contradictory. Both, for instance, are grounded in the principles of a liberal market economy and both assume a stakeholder approach (that is, the prioritization of stakeholders and CSP). Main difference between these two theories are the manners in which businesses manage political CSR initiatives.

The nonmarket strategy theory suggests that a business’s CPA is instrumental and strategic by nature. Nonmarket strategies concentrate on the value and benefit that political actions will bring the company, through means of CPA and its role in CSP. Lock and Seele (2018, p. 3) states that “the firm is not seen as a political, but an economic actor outside of the political realm”. Nonmarket strategies are therefore quite like “window dressing”, in that the company’s efforts are taken for its own benefit and not for the benefit of social good.

The nonmarket strategy theory is thus a business-centered approach, as it clearly separates the company from political and social responsibilities. Nonmarket strategies include CSR ventures such as lobbying (with the purpose of influencing public policy), grassroots campaigns (that are intentionally visible), and astroturfing (a marketing strategy that is disguised as activism).

Political CSR theory claims that a company and its organization is integrated into the social and political world. Political CSR recognizes increasing globalization and the resulting synthesis that arises between the economic and political domains. Furthermore, political CSR is more than “merely complying with stakeholder expectations” (et al., 2018, p. 3). The business is embedded in the social, political, and economic world, and thus recognizes its responsibility to take on social challenges. As opposed to nonmarket strategy – that removes companies from the political domain and uses political activity as instruments – political CSR initiatives allows for businesses to become actual political actors.

Political CSR is grounded by a belief in deliberative democracy; that is, the notion that economic, political, and social actors should be equally as involved in the decision-making on public issues. Political CSR ventures include self-regulation that, in turn, leads to multi-stakeholder initiatives. Self-regulation emerges in the company’s corporate governance and its organizational structure.

Responsibility to engage in Corporate Political Activity

Smith and Korschun (2018) states that in the increasingly globally politically polarized world that we live in, citizens have growing expectations for businesses to become involved in and speak out against social issues. CPA nonetheless runs the risk of disappointing social actors and consumers that, in turn, will risk a company’s financial performance. The decision to ethically engage in political activity should be made by considering the extent to which “the issue is materially important to the company’s financial performance and how relevant it is to stated corporate values” (Smith & Korschun, 2018).

A business’s success rests on its profit maximization, and a business should naturally then engage in CPA if a political issue affects its economic performance. The strength of the position a business should take against a political issue is subject to two considerations: firstly, the relation between the political issue and the business’s financial performance and, secondly, the relation between the political issue the business’s values.

The Effects of Lobbying on Business Performance

Engagement in CPA can raise a lot of uncertainty in the corporate governance of a company, especially if one considers the prospect of alienating stakeholders or customers that could result in decreasing financial performance. Lux, Crook and Leap (2012) notes that there is a strong relationship between the CPA of a business and its performance. Research indicates, for instance, that lobbying efforts in the US have advanced business performance by way of government manipulations.

These lobbying efforts are nonmarket strategies that directly favor the business’s economic performance. These strategies manipulate public policy or government officials to facilitate the business’s objectives. Four common US lobbying strategies include: financial appropriations, policy maintenance, policy change, and policy creation (Lux, Crook & Leap, 2012, p. 309).

Financial appropriation is types funding that the government designates to assist companies in making profit. These types of designations can take the form of tax subsidies, grants, tenders or federal contracts. Policy maintenance is CPA that is aimed at maintaining current laws and policies, often by way of impeding proposed bills or “threatening legislation” from being drafted into law (et al., 2012, p. 309).

Policy change CPA efforts occurs when businesses modify current laws or policies in favor of things such as profit-making objectives or competitive advantage. Walt Disney, for instance, directed CPA towards influencing US copyright laws in 1976. Disney’s lobbying efforts, in the form of $6.3 million, were aimed at extending the copyright on the Mickey Mouse character from 1984 to 2003. These efforts led to the US Congress permanently modifying copyright law and Disney to maintain copyright over Mickey Mouse.

Policy creation are rare forms of CPA efforts, but it can yield the greatest benefits for businesses. The creation of new policies or laws are also rarely accepted by governments, since new policies are likely to affect many stakeholders. Furthermore, new policies or laws are likely to meet a lot of resistance since these consequences may go beyond business benefits.

CPA by businesses can always run into many risks that can, in turn, be disastrous to business performance. These risks may include, for instance, the damaging of the company’s image or reputation. Furthermore, businesses invest large sums of money into CPA activities, but these investments do not always bring about the needed policy outcomes. Investment risks may result in negatively affecting the financial performance of a business.

The “free-rider” risk can also have consequences on the business’s performance. Competitors may become “free-riders” to policy modifications that were brought about by other businesses. This could negatively affect business performance by allowing competitors to gain equal, or possibly even more, advantage (et al., 2012).

The Corporate Exit as CPA

Kuo and Means (2018) argues that research is most often focused towards businesses exerting their “voice” in political matters and policy, and not as much on the political act of the corporate “exit”. “Voice” CPA efforts are active measures such as lobbying, funding political campaigns, or advertising. These efforts, as discussed in the previous section, can also take the form of manipulating public policy or government officials.

The corporate “exit”, on the other hand, is the process of businesses withdrawing investment or refusing to participate in certain political affairs. A corporate exit, or even the threat of one, can have serious implications on political processes. Businesses may, for instance, exert this influence in retaliation to certain laws or attempt to send a political message. In terms of CSR, businesses may object to social injustices and exit in order to show support for social issues. In another vein, businesses may circumvent complicity with legislation or public policy that they disagree with. The corporate exit is often overlooked in CPA research, but it can be a significant and effective measure of CPA that can influence the political sphere to an equal extent that active or lobbyist CPA can (Kuo & Means, 2018).

Conclusion

Engagement in political matters has a direct effect on a business’s performance. While there are many risks in getting involved in or speaking out against political matters, businesses are increasingly required by stakeholders to become socially responsible actors. Business can engage in political activity by way of lobbying, political advertising, influencing public policy, or by withdrawing from certain situations. On the one hand, businesses may engage in CPA in pursuit of profit maximizing objectives. On the other hand, businesses may become involved in political activities in order to become more socially responsible and to speak out on political matters.

Political activity has become an increasingly CSR method that businesses engage in, especially if one considers the overlap of the economic and political spheres. Many stakeholders have started expecting businesses to participate in politics and campaign for social issues – especially businesses with a great deal of authority, such as transnational corporations.

References

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