Ch 9: Influence Politics

Front 1

Why business should be involved in politics

Back 1

its a pluralistic system with many participants
economic stakes are high for firms
bus counterbalances other social interests
bus is a vital stakeholder of gov

Front 2

Why business should not be involved in politics

Back 2

managers are not qualified to engage in political debate
bus is too big and powerful
bus is too selfish to care about common good
bus risks credibility by engaging in partisan politics

Front 3

Ad hoc coalitions

Back 3

bring diverse groups together to organize for or against particular legislation or regulation

Front 4

Corporate political strategy

Back 4

activities taken by orgs to acquire, develop, and use power to obtain an advantage
further a firm's economic survival or growth

Front 5

Political actions by businesses

Back 5

Information strategy - bus seeks to provide gov policymakers with information to influence their actions, such as lobbying, direct communication, expert witness testimony
Financial incentives strategy - bus influences by making a contribution to a PAC to support a policymaker and economic leverage
Constituency-building strategy - bus gains support from other affected orgs to better influence gov policymakers to act in a way that helps them; stakeholder coalitions, advocacy advertising, trade associations, legal challenges

Front 6

Lobbying

Back 6

companies hire full-time reps in D.C. and cities to keep abreast of developments that may affect the company and communicate with gov officials
They represent the bus before people and agencies involved in determining legislative and regulatory outcomes

Front 7

Temptation rules

Back 7

lawmakers and their aides are barred from accepting any gifts, meals or trips from lobbyists
this is avoided by paying into a lawmaker setup political fund-raising committee

Front 8

Revolving door

Back 8

circulation of individuals between bus and gov

Front 9

Business Roundtable, 1972

Back 9

direct communication between bus and policymakers
organization of CEOs

Front 10

Economic Leverage

Back 10

bus uses its economic power to threaten to leave a city, state or country unless a desired political action is taken

Front 11

Grassroots strategy

Back 11

shape policy by mobilizing the broad public in support of bus orgs position

Front 12

Grasstops strategy

Back 12

influence local opinion leaders

Front 13

Stakeholder coalitions

Back 13

mobilize various organizational stakeholders to support political agenda

Front 14

Advocacy advertising

Back 14

focus on a controversial political issue
AKA issue advertisement

Front 15

Trade associations

Back 15

coalitions of companies in the same or related industries--to coordinate their grassroots mobilization campaigns
National Realtors Association, U.S. chamber of Commerce

Front 16

Level of Business Political Involvement

Back 16

Level 1 - limited organizational involvement, indirect and impersonal (not ready to be politically involved, give a check only)
Level 2 - Moderate Organizational Involvement, indirect yet personal (lobbyist involvement)
Level 3 - Aggressive Organizational Involvement, direct and personal (exec participation)

Front 17

Bundling

Back 17

firms solicit stockholders to contribute to a particular candidate. the grouping of firm's stockholders contributions

Front 18

Public Affairs Department

Back 18

manage the firm's interactions with gov at all levels and promote the firm's interests in political issues

Front 19

Bipartisan Campaign Reform Act of 2002

Back 19

imposed a ban on soft money -- unlimited contributions to national political parties by individuals or orgs for party-building activities

Front 20

527 Organizations

Back 20

(named after tax code provision)
provide potential contributors with a new and legal way to influence the elction of a candidate or bring attention to a political issue

Front 21

Reform Campaign FInancing

Back 21

Limits on expenditures
Contribution limits
Disclosure regulations
Bans against certain types of contributions
Bans against types of expenditures
Measures to encourage donations
Subsidies in-kind
Public subsidies

Front 22

Conglomerate Mergers

Back 22

Combination or joining together of two or more companies in unrelated industries into a single company

Front 23

Corporate Mergers

Back 23

Combination of one company with another. Tend to lead to monopolies so antitrust regulators are involved

Front 24

Corporate Power

Back 24

strength or capability of corporations to influence gov, economy and society based on their organizational resources and size

Front 25

Harmonization

Back 25

corrdination of laws and enforcement efforts among nations

Front 26

Horizontal Mergers

Back 26

combination or joining together or companies in same industry and at the same level or stage of production in sales into a single co

Front 27

Hostile Takeover

Back 27

acquisition of one firm by another in which the target firm does not wish to be acquired

Front 28

National Competitiveness

Back 28

ability of a nation to compete effectively with other nations in international markets through the actions of its privately and publicly owned bus firms

Front 29

Predatory pricing

Back 29

practice of selling below cost for the purpose of driving competitors out of bus; usually illegal under U.S. antitrust laws

Front 30

Tying

Back 30

firm requires someone to buy an unwanted product or service in order to get another one they want. Illegal under U.S. antitrust laws

Front 31

Vertical Mergers

Back 31

joining of cos in the same industry but at different levels or stages of production or sales into a single co.

Front 32

Sherman Act

Back 32

prohibits contracts, combinations or conspiracies that restrain trade and commerce;
prohibit monopolies;
enforced by Justice Department

Front 33

Clayton Act

Back 33

prohibits price discrimination by sellers;
forbids seller from forcing someone to buy a product they don't want to get one they want;
prohibits mergers if competition is lessened

Front 34

Federal Trade Commissions Act

Back 34

created FTC to enforce antitrust laws;
prohibits unfair competition

Front 35

Antitrust Improvements Act

Back 35

requires large corps to notify Justice Dept and FTC about impending M&A's;
expands Justice Dept's antitrust investigative powers

Front 36

Antitrust Law Expemptions

Back 36

Some orgs are not covered (baseball)
labor unions, agricultural cooperativeness, insurance cos (state law regulated) and national defense transactions

Front 37

1984 Cooperative Research Act (NCRA)

Back 37

sought to balance cooperative R&D with competition by instructing the courts to use a "rule of reason"