Handbook on the Geopolitics of Business
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Handbook on the Geopolitics of Business

  • Elgar original reference

Edited by Joseph Mark S. Munoz

In recent years, rapid globalization, novel technologies and business models, as well as economic and political changes have transformed the international business landscape. This pioneering volume offers a comprehensive discussion of the new global terrain and makes a strong case for the consideration of geopolitics in both the study and practice of modern-day business.
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Chapter 15: Exploring how foreign firms select partners in international political alliances

Andrew Barron

Extract

Corporate political activity (CPA), defined by Getz (1997: 32) ‘as any deliberate action taken by firms to influence governmental policy or process’, is receiving increased attention as a central component of many firms’ business strategies. The growing importance of international business has led to an internationalization of firms’ corporate political strategizing. Consequently, firms are engaging increasingly in political action beyond their national borders (e.g. Hillman and Keim, 1995). Mainstream reviews of the CPA literature (e.g. Hillman et al., 2004) show that much scholarly attention has been devoted to the collective political actions of firms. Researchers have applied a number of theoretical perspectives – including, for example, transaction cost theory, resource dependency theory, the behavioral theory of the firm, and institutional theory – to uncover the reasons why some firms choose to represent their political interests alone whilst other choose to represent them collectively. According to prior research, a number of factors – such as issue-specific considerations, industry-specific influences, firm-level characteristics, and institutional forces – can potentially weigh heavily on firms’ responses to this strategic choice. To date, scholars’ primary focus has clearly been trained on understanding why firms choose to engage in collective political action. This contribution, however, aims to address the under-researched question of how firms – having chosen to engage collaboratively in the policy-making process – go about choosing their collective action partners. Its focus is directed in particular at firms that are politically active beyond their national borders.

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