1. Archie B. Carroll Ann K. Buchholtz
Business & Society Ethics, Sustainability, and Stakeholder Management Eighth Edition
Archie B. Carroll
Ann K. Buchholtz
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2. Chapter 12 Business Influence on Government and Public Policy
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3. © 2012 South-Western, a part of Cengage Learning
Learning Outcomes
Describe the evolution of corporate political participation.
Differentiate among the different levels at which business lobbying occurs.
Explain the phenomenon of political action committees (PACs) in terms of their historical growth, the magnitude of their activity, and the arguments for and against them.
Define coalitions and describe the critical role they now assume in corporate political involvement.
Discuss the Bipartisan Campaign Reform Act and other issues surrounding campaign financing.
Outline the principal strategic approaches to political activism that firms are employing.
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Chapter Outline
Corporate Political Participation
Coalition Building
Political Action Committees
Summary
Key Terms
Discussion Questions
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5. Corporate Political Participation
Political Involvement
Participation in the formulation and execution of public policy at various levels of government.
A 2010 Supreme Court ruling states that the government should not regulate political speech from corporations.
Has strengthened business’s power in political activities and allows for unlimited political spending by corporations.
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6. Corporate Political Participation (continued)
Lobbying
The process of influencing public officials to promote or secure passage or defeat of legislation.
PACs
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.
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7. Organizational Levels of Lobbying
Umbrella Organizations
Trade Associations
Individual Company Lobbying
Broad
Midrange
Narrow/
Specific
Representation
Chamber of Commerce of the US
National Association of Manufacturers
National Automobile Dealers Assn.
National Association of Realtors
Washington and State Capital Offices
Law firms
Public affairs specialists
PACs
Grassroots lobbying
Examples
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Grassroots Lobbying
Grassroots Lobbying
Mobilizing the “grassroots,” which are individual citizens who might be most directly affected by legislative activity, to political action.
Cyberadvocacy
Using the Internet to amass grassroots support and enable grassroots supporters to contact their legislators.
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9. Grassroots Lobbying (continued)
Astroturf Lobbying/Grasstops Lobbying
Fake groups that appear to be genuinely grassroots but are largely created and funded by a professional organization or trade association.
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10. Trade Association Lobbying
What are Trade Associations?
How do they help companies conceal donations?
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11. Umbrella Organizations
Two major U.S. umbrella organizations
Chamber of Commerce of the United States
National Association of Manufacturers (NAM)
Other umbrella organizations
Business Roundtable
National Federation of Independent Businesses (NFIB)
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Coalition Building
Coalition
Forms when distinct groups or parties realize they have something in common that might warrant their joining forces for joint action.
How does one build a coalition?
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13. Political Action Committees
Political Action Committees (PACs) are groups of like-minded businesses using financial resources to influence government.
The principal instruments through which business uses financial resources to influence government.
What are the arguments for and against PACs?
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14. Political Action Committees
Argument for PACs
PACs are a reasonable means for business to organize their contributions to candidates for office.
Business giving is offset by labor giving and by the multitude of other special-interest groups that also have formed PACs
Argument Against PACs
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.
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15. The Hard Facts About Soft Money
Soft money is a contribution made to political parties instead of political candidates.
The Bipartisan Campaign Reform Act of 2002 was a sweeping change of U.S. campaign finance.
The BCRA removed the influence of soft money on candidates running for national office.
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16. The Hard Facts About Soft Money (continued)
Law regulates hard money, which are donations made directly to candidates.
Strategists established 527s, which are allowed to spend soft money on campaigns.
Bundling
The collection of individual donations that are then delivered to the candidate in a lump sum.
Another way of getting around campaign finance reform.
A recent Supreme Court ruling removed all limits on campaign donations by corporations.
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17. Strategies for Political Activism
Managers must address when and under what conditions various approaches should be used.
The purpose of political strategy is “to secure a position of advantage regarding a given regulation or piece of legislation, to gain control of an idea or a movement and deflect it from the firm, or to deal with a local community group on an issue of importance.”
Two major strategies:
Keep an issue off the public agenda and out of the limelight.
Help to define the public issue.
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Key Terms
Astroturf lobbying
Bipartisan Campaign Reform Act (BCRA)
Bundling
Coalitions
Company lobbying
Contingency approach
Cyberadvocacy
527s
Golden Rule of Politics
Grassroots lobbying
Grasstops lobbying
Hard money
Lobbying
Political action committees (PACs)
Political involvement
Positive activism
Regulatory life cycle
Soft money
Trade organizations
Umbrella organizations
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