COURSE SUMMARY u Strategic management of nonmarket issues u Guidelines for non-market issue management u Foundations of non-market issue management u Examples of different strategies & tactics u Emerging BG&S issues

MANAGEMENT OF NON-MARKET ISSUES u Integrate the management of market and non-market issues t Market t Corporate manager t Non-market

Management of Non-Market Issues u We had many cases highlighting how non- market issue management related to market strategies

Management of Non-Market Issues u Microsoft’s actions in the anti-trust arena reflected: – corporate strategy to provide comprehensive & integrated computer services to customers –the desire to protect their dominant position in OS market –plan to leverage dominance in OS market in other markets

Management of Non-Market Issues u PCConnection’s non-market activities (and corporate social responsibility) helps them in the labor market/recruitment, with their customer base (relatively large percentage of younger customers), and investors (public image, PR and promotion).

Management of Non-Market Issues u Firearms Industry’s conflictual approach with government is closely related to their need to defend, at almost any cost, their highly profitable product line. It also reflects the views and values of the large majority of their customers.

Management of Non-Market Issues u Many service and consumer products companies (e.g., American Airlines, Coke) will have to rethink how their employment policies effect their public image/reputation and then their sales and recruitment There are many signs that the auto industry is at a critical nonmarket phase in SUV product development and sales.

II. MANAGEMENT GUIDELINES ON NON-MARKET ISSUES u Identify relevant non-market issue(s) and what is at stake u Specify objective(s) u Generate alternative strategies. t strategies should include corporate actions and relevant institutional arenas t consider wide & diverse range of options

II. MANAGEMENT GUIDELINES ON NON- MARKET ISSUES u Analyze costs and benefits of alternative strategies. t this should draw heavily on foundations (which we review later) u Implement strategy u Monitor results. so that results can be evaluated and the corporation (and management) can learn from their experience

III. THE FOUNDATIONS OF CORPORATE NON-MARKET STRATEGY u Analysis of various interests/ actors, their motivations and political resources, including ability to organize a collective effort.

III. THE FOUNDATIONS OF CORPORATE NON-MARKET STRATEGY u Assessment of the demand and supply of political action: t should consider own interest and resources and the interest and resources of other actors on an issue.

III. THE FOUNDATIONS OF CORPORATE NON-MARKET STRATEGY u Identify the nature of politics on an issue -- use wilson’s politics typology u Locate issue in life cycle -- problem i.d., interest group formation, legislation, enforcement. the greatest influence by corporations could be at the initial stage.

III. THE FOUNDATIONS OF CORPORATE NON-MARKET STRATEGY (cont.) u Identification of relevant institutional arenas -- e.g., congress (and particular committee/sub- committee), regulatory agencies, state legislature, courts. t Corporations can often times influence the institutional arena in which decisions are made--e.g., federal or state, judicial or administrative agency. “Choice” of institutional arena could effect outcome

IV. CORPORATE NON-MARKET STRATEGIES, examples u Organize a coalition/alliance of potential beneficiaries (e.g., Internet companies “fighting” regulation). u Show decision-makers the benefit of policy to their constituents (e.g., environmental groups lobbying the congress). t this can involve info/data provision & analysis

IV. CORPORATE NON-MARKET STRATEGIES (alternative strategies, cont.) u Provide resources to decision makers (e.g., gun and tobacco industries) t can include electoral contributions, PAC contributions (subject of one of our debates). u “Defuse” opposition by providing them with reasonable alternatives, in effect lower the costs of policy to opponents.

IV. CORPORATE NON-MARKET STRATEGIES (ALTERNATIVES, CONT.) u Divert attention to another issue (e.g., GM pick-up trucks and NBC Dateline, United-USAirways merger and DCAir) u Public advocacy--media campaign (e.g., A&B and responsible drinking) u Research & “expert” testimony (e.g., cellular telephone, Microsoft and team of economists) u “Go to the courts” -- litigation u -- strategies are not mutually exclusive ---

V. SUMMARY: CORPORATE NON-MARKET STRATEGIES u Not only market position, but also corporate credibility, image and reputation are at stake with non-market activity. t this is increasingly true as consumers, employees and investors are more concerned with and better informed about corporate activity.

V. SUMMARY: CORPORATE NON-MARKET STRATEGIES u Actions in non-market arena strongly influence: t position in market (current and future), in relation to customers, employees and with investors t future relations with government

“EMERGING” BG&S ISSUES t The Internet as a public and market resource t Anti-trust in a dynamic global economy (e.g., Microsoft) t International markets & corporate social responsibility( e.g., Nike, Ben & Jerry’s ) t Common resource problems (e.g., dolphin free tuna)

“EMERGING” BG&S ISSUES t Corporate workplace & societal practices as they relate to labor recruitment & retention (particularly relevant for firms seeking high skilled workers in tight labor market) t Individual rights “vs” societal interests (e.g., land use/urban sprawl) t The increased application of social efficiency criteria in social and environmental regulation (e.g., the use of tradable permits)