of Stakeholders, Ethics, Public Policy:

1
Management 308

• Chapter 9
• of Stakeholders, Ethics, Public Policy
• Influencing the Political Environment
• Shawn Berman
• Anderson School of Management
• University of New Mexico

2
Business and the public policy process
How (and should) the institution of business (and
individual businesses) be involved in government
that is, should business participate in the
political process? Many of the concerns about
campaign finance and various actions by policy
makers arise from concerns that businesswith its
financial resourcesis able to influence
political officials disproportionately. Others
argue that because business is often the focus of
governmental regulation, it views much be
represented to those making the laws. Also,
business is one of many interests groups that
deserves to have a voice in the process. The
next slide highlights the arguments from a number
perspectives What do you think? Does business
have too much power over the political process?
3
The Arguments For and Against Political
Involvement by Business
Figure 9.1
4
Corporate political strategy

• Corporate political strategy involves activities
  taken by organizations to acquire, develop, and
  use power to gain some advantage. (p.188, L
  W).
• Political actions often take the form of one of
  three strategic types
• An information strategy consisting of activities
  such as lobbying, direct communication, and
  providing expert witnesses
• A financial-incentive strategy such as using PACs
  or economic leverage like leaving a city
• A constituency-building strategy brings together
  stakeholders impacted by a decision to support
  business position on an issue. It can also
  include advocacy advertising, PR and trade
  associations or the use of legal challenges.
  This includes coalition building strategies
  involving groups not directly stakeholders of the
  firm.
• What are Political Action Committees (PACs)?
• How does business have the biggest impact on the
  political process?
• Why are many business reticent to become engaged
  in the political process?

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Campaign finance reform
Corporations cannot legally give money to
candidates. But, executives can give money and
corporations can give money to PACs, which then
give the money to the candidates. Further,
corporations used to be able to give soft money
contributions to the party organizations to
support party operations. While the
McCain-Feingold Campaign Finance Reform Act of
2002 banned soft money contributions by
businesses and labor organizations, many
so-called 527 organizations were formed around
specific issues. Business were able to
contribute unlimited amounts (as were labor
organizations) to support these groups. How
would one get money out of politics? Is that
even desirable?
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Business political action A global challenge

• The challenges related to controlling the
  untoward influence of business (and money) on
  politics is not just a US challenge. Countries
  around the world have been working on legislation
  that would include
• Limits on expenditures
• Contribution limits
• Disclosure regulations
• Bans against certain types of contribution
• Bans against certain types of expenditures
• Measures designed to encourage donations
• Subsidies in-kind
• Public subsidies

7
The New Business Political Activist Behind the
Scenes, Less Visible, discussion questions

• Is Schultzs desire to keep Starbucks out of the
  U.S. political arena a realistic goal in todays
  business-government environment?
• What political strategies would you recommend
  that Engskov pursue to enhance Starbucks
  likelihood of success in politics? In your
  answer, please refer to Figure 9.2.
• What level of involvement should Engskov
  recommend for Starbucks as it becomes more
  involved in the political arena? In your answer,
  please refer to Figure 9.5.
• Should Engskov avoid or delay developing certain
  strategies, given Schultzs reluctance to involve
  Starbucks in political action? What would be the
  costs and benefits of doing so?