2. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-1 Chapter 11 Businesss Influence on Government and Public Policy 1 Businesss Influence on Government and Public Policy Search the Web For information about the role of money in the political process, visit http://www.opensecrets.orghttp://www.opensecrets.org

3. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-2 Chapter 11 Businesss Influence on Government and Public Policy 2 Chapter Eleven Objectives Describe the evolution of corporate political participation Consider how and where lobbying occurs Explain the use of political action committees (PACs) –Historical growth –Magnitude of activity –Arguments for and against them Define coalitions in corporate political involvement Consider soft money issues and proposed political remedies Outline principal strategic approaches to political activism

4. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-3 Chapter 11 Businesss Influence on Government and Public Policy Chapter Eleven Outline Corporate Political Participation Coalition Building Political Action Committees Evolutions of PACs Summary

5. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-4 Chapter 11 Businesss Influence on Government and Public Policy Introduction to Chapter Eleven The chapter focus is on business political attempts to influence government and public policy and whether these strategies are legal and ethical

6. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-5 Chapter 11 Businesss Influence on Government and Public Policy Corporate Political Participation Political involvement is the participation in the formulation and execution of public policy. –Microsoft case example

7. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-6 Chapter 11 Businesss Influence on Government and Public Policy Corporate Political Participation Lobbying –The process of influencing public officials PACs (political action committees) –Instruments through which business uses financial resources to influence government Coalition building –Business and other groups joining forces to achieve common goals Political strategy –To secure position of advantage regarding a given regulation or piece of legislation

8. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-7 Chapter 11 Businesss Influence on Government and Public Policy Corporate Political Participation Umbrella Organizations –Broad Representation Chamber of Commerce of the Unites States, National Association of Manufacturers, etc. Trade Associations –Midrange representation National Automobile Dealers Association, National Association of Realtors, etc. Company-Level Lobbying –Narrow/specific representation IBM, Delta Airlines, PACs, public affairs specialists, grassroots, etc. Organizational Levels of Lobbying

9. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-8 Chapter 11 Businesss Influence on Government and Public Policy What Lobbyists Do for Clients? Gain access to key legislators Monitor legislation Establish communication channels with regulatory bodies Protect firms against surprise legislation Draft legislation, develop slick ad campaign, create direct-mail Provide issue papers on effects of legislative activity Communicate sentiments of client on key issues Influence outcome of legislation Assist in coalition building around issues Help members of legislative bodies get reelected Organize grassroots efforts

10. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-9 Chapter 11 Businesss Influence on Government and Public Policy Coalition Building Manage the sequence in which issues are addressed Increase the visibility of certain issues Unbundle issues into smaller subissues

11. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-10 Chapter 11 Businesss Influence on Government and Public Policy Political Action Committees Political Action Committees (PACs) are groups of like minded people who use their money and power to influence political outcomes and decisions. –Golden Rule of Politics: He who has the gold, rules.

12. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-11 Chapter 11 Businesss Influence on Government and Public Policy Political Action Committees PACs are a reasonable means that business may use to organize their contributions to candidates for office. PACs expect something in return other than good government and this can lead to differing treatment for those who give and those who cannot, such as the poor. Pro Con

13. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-12 Chapter 11 Businesss Influence on Government and Public Policy Political Action Committees Issues Concerning PACs Magnitude of activity Vote-buying Campaign financing Soft money Search the Web For information about the role of soft money in the political process, visit http://www.commoncause.orghttp://www.commoncause.org

14. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-13 Chapter 11 Businesss Influence on Government and Public Policy Political Action Committees Conditions Needed for Effective PAC Contributions When the issue is less visible During the early stages of the legislative process When the issue is narrow, specialized, or unopposed When PACs are allied When PACs adopt lobbying techniques to control their contribution strategies

15. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-14 Chapter 11 Businesss Influence on Government and Public Policy Political Action Committees Strategies for Political Activism Mahons strategy –Keep an issue off the public agenda and out of the limelight –Help to define an issue Regulatory life cycle approach –Formation, formulation, implementation, administration and modification of firms political strategy

16. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-15 Chapter 11 Businesss Influence on Government and Public Policy Political Action Committees Strategies for Political Activism Contingency approach considers variables of: –The number of salient issues in a legislative district –The amount of information a legislator possesses concerning voter preferences After considering the above, then determine: –The salience of the companys issue to the legislators constituency –The identification of the expected position of voters on the issue

17. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-16 Chapter 11 Businesss Influence on Government and Public Policy Political Action Committees Strategies for Political Activism Sethis model –Modes of corporate responses Defensive Accommodative Positive activism –Internal corporate conditions –Anticipated political risks

18. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 11-17 Chapter 11 Businesss Influence on Government and Public Policy Accommodative mode Astroturf lobbying Campaign finance reform Coalition Company lobbying Contingency approach Cyberadvocacy Defensive mode Golden Rule of Politics Grassroots lobbying Lobbying Political action committees (PACs) Political involvement Positive activism Regulatory life cycle Soft money Trade associations Umbrella organizations Selected Key Terms