Business & Society Online Table of Contents Alert
The September 2013 issue of Business & Society is being mailed to individual subscribers.
A new issue of Business & Society is available online – content available to all subscribers:
Special Issue: The Governance Challenges of Corporate Political Activity:
September 2013; Vol. 52, No. 3
The below Table of Contents is available online at: http://bas.sagepub.com/content/vol52/issue3/?etoc
Editorial
Editorial Announcement, From the Editor
Duane Windsor
Business Society 2013;52 363-364
http://bas.sagepub.com/cgi/reprint/52/3/363
Special Issue Articles
The Governance Challenges of Corporate Political Activity
Nicolas M. Dahan, Michael Hadani, and Douglas A. Schuler
Business Society 2013;52 365-387
http://bas.sagepub.com/cgi/content/abstract/52/3/365
This article explains the rationale for study of the governance challenges of corporate political activity. The topic is important, especially in light of the U.S. Supreme Court's 2010 Citizens United decision, but understudied to date. The authors review the literature bearing on this topic. The authors separate consideration of the topic into macro-level and micro-level issues. The macro level concerns the societal perspective. At this level, key research questions concern whether corporate political activity be allowed, and how it should be regulated. The micro level covers managerial and shareholder control over corporate political activity. At this level, key research questions include concern whether the firm should practice political activity and how to regulate practice through professional self-regulation, ethical guidelines, and corporate governance systems control. The remainder of this article contains focused summaries of the articles selected for this Special Issue. Each article is introduced and evaluated against the key research questions at the macro or micro levels of analysis.
Corporate Dystopia: The Ethics of Corporate Political Spending
Miguel Alzola
Business Society 2013;52 388-426
http://bas.sagepub.com/cgi/content/abstract/52/3/388
This article is concerned with the moral permissibility of corporate political activities under the existing legal framework in the <st1:place w:st="on"><st1:country-region w:st="on">United States</st1:country-region></st1:place>. The author unpacks and examines the standard case for and against the involvement of business in lobbying and electoral activities. And the author provides six objections against the standard arguments and proposes that the wrongness of corporate political activities does not have much to do with its potential social consequences but rather with nonconsequentialist considerations. The author's ultimate aim is to make sense of the intuition that corporate political spending is morally objectionable. The author argues that his case against corporate political spending fares better than the standard case. What is wrong with the current system of regulation of corporate lobbying and campaign finance is that it is inconsistent with the principles of political equality and consent. By taking advantage of this unfair regulatory framework, business firms are making a contribution to undermine the basis of a robust democratic regime at both the societal and the corporate level.
The Labor Market for Politicians: Why Ex-Legislators Gravitate to Lobbying
Glenn R. Parker, Suzanne L. Parker, and Matthew S. Dabros
Business Society 2013;52 427-450
http://bas.sagepub.com/cgi/content/abstract/52/3/427
The so-called revolving door between employment in government and industry is especially relevant to the U.S. Congress because ex-legislators are notorious for taking jobs as lobbyists. There are two prominent explanations for why they do so: Lobbying either matches the talents of former legislators due to their specialized congressional training or it represents customary ex-post payments for ex-ante legislative assistance to special interests. This article explores the former dynamic, focusing on how specialized training impacts occupational outcomes of legislators and finds strong evidence to support the notion that former legislators become lobbyists due to unique human capital. This finding somewhat qualifies the notion that possible ex-post payments are a main driver for the postelective employment choices of ex-legislators.
The Influence of Ownership Structure on How Firms Make Corporate Political Strategy Choices
Mine Ozer and Ekin Alakent
Business Society 2013;52 451-472
http://bas.sagepub.com/cgi/content/abstract/52/3/451
This study integrates the research on corporate political strategy and corporate governance. Using the agency theory perspective, this study examines how corporate governance mechanisms such as institutional ownership, insider ownership, and long-term executive compensation affect a firm's political strategy approach. This study proposes that an agency problem may occur between owners and managers in regard to firms' approach to corporate political strategy. Since a relational approach to corporate political strategy, such as establishing a government relations office in <st1:place w:st="on"><st1:city w:st="on">Washington</st1:city>, <st1:state w:st="on">DC</st1:state></st1:place>, requires significant resource commitments without guaranteeing a favorable policy change, shareholders might be reluctant to approve such an approach. In a sample of 3,417 <st1:place w:st="on"><st1:country-region w:st="on">U.S.</st1:country-region></st1:place> manufacturing firms, over 5 years of data, the results show that institutional ownership and insider ownership are negatively associated with firms' propensity to engage in a relational approach to political strategy.
Democratizing Corporate Governance: Compensating for the Democratic Deficit of Corporate Political Activity and Corporate Citizenship
Andreas Georg Scherer, Dorothée Baumann-Pauly, and Anselm Schneider
Business Society 2013;52 473-514
http://bas.sagepub.com/cgi/content/abstract/52/3/473
This article addresses the democratic deficit that emerges when private corporations engage in public policy, either by providing citizenship rights and global public goods (corporate citizenship) or by influencing the political system and lobbying for their economic interests (strategic corporate political activities). This democratic deficit is significant, especially when multinational corporations operate in locations where national governance mechanisms are weak or even fail, where the rule of law is absent and there is a lack of democratic control. This deficit may lead to a decline in the social acceptance of the business firm and its corporate political activities and, thus, to a loss of corporate legitimacy. Under these conditions corporations may compensate for the emerging democratic deficit and reestablish their legitimacy by internalizing democratic mechanisms within their organizations, in particular in their corporate governance structures and procedures. The authors analyze the available corporate governance models with the help of a typology and discuss the possible contributions of a new form of democratic corporate governance.
Research Article
Doing Business in a Transitional Society: Economic Environment and Relational Political Strategy for Multinationals
Yadong Luo and Hongxin Zhao
Business Society 2013;52 515-549
http://bas.sagepub.com/cgi/content/abstract/52/3/515
This article addresses how foreign subsidiaries formulate their relational political strategy by responding to the unique parameters of the economic and institutional environment in an emerging market in an attempt to improve their performance. To this end, the authors have developed a model that assesses economic environment antecedents characterizing an emerging market (regulatory distance, industry accessibility, environmental uncertainty, and economic development) as well as the performance consequence of the subsidiaries' relational political strategy. A possible moderating effect of the firm's reputation in the host country and length of operations on the relationship between political strategy and local performance is also examined in the model. Our analysis of primary and secondary data concerning 358 foreign-invested enterprises in <st1:country-region w:st="on"><st1:place w:st="on">China</st1:place></st1:country-region> generally supports this model.
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