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Why do companies perceive a need to influence politics? What is political influence? How can companies obtain political influence? In this chapter, I answer all of those questions, drawing on research in several fields and on interviews with lobbyists, politicians, and others with first-hand experience with political influence. I explain that political influence is fundamentally about building and maintaining relationships with people in power. I argue that problem-solving is one way companies can form relationships, and I discuss common problems elected officials face: the need for money, the need for information, and the need to do their jobs well (or to be perceived as such). I conclude this chapter by discussing which influence-seeking strategies this implies, other than the strategies commonly studied, and discuss how this lends itself to questioning why companies choose different strategies.
This chapter asks whether companies are aware that consumers might support boycott in response to their political activities. I argue that larger companies, companies led by women, and companies with valuable brands are most likely to be vulnerable to backlash. Evidence for this chapter comes from two sources: corporate reports and interviews. Specifically, I use 10-Ks, reports that publicly traded companies file with the Securities and Exchange Commission (SEC) and which are intended to provide stockholders and potential investors with relevant information about the company. Although women CEOs are rare, I find evidence that companies led by women are more likely to cite concerns about the kinds of issues that a public backlash can cause, as are larger companies. Further, I find evidence that suggests that companies are particularly worried about this with reference to brand and reputation damage rather than revenue. I supplement this with evidence from interviews with people with first-hand experience of corporate decision-making and find that companies are quite concerned about the risk of boycott and understand the threat inherent in their political influence-seeking.
In this chapter I ask why people respond negatively to corporate political advocacy. I argue that when people talk about boycotting a company, they are not really talking about their consumer behavior. Rather, calls for and supporting boycotts, especially in online formats, function in large part as a way for people to signal their partisanship to their social networks. In this way, disapproval of corporate advocacy in public serves dual functions of reaffirming someone’s individual partisan identity and also signaling loyalty to an in-group by disapproving of an out-group. I use two sources of evidence in this chapter: a survey with two embedded experiments and social media data on boycotts. The survey and experimental data use the individual as the unit of analysis to test whether disapproval of a company’s political activities is primarily partisan. The Twitter data focuses on what aspects of a tweet make it more likely to gain traction and be retweeted. In both tests, I find strong evidence that partisanship is a strong predictor of disapproving of a company’s political advocacy, as well as taking a public stance against it.
In the concluding chapter, I focus on synthesizing the findings from the book and addressing some lingering normative questions. Specifically, I ask what this means for boycotts, whether forcing political activity underground is really preferable to having it more out in the open, and what this means for if and how corporate influence can be tamed.
The introduction to this book surveys what we already know about political influence and explains why companies are and are not exactly like other organized political interests that try to influence politics. Companies differ from other organized interests in that they do not exist primarily to further policy objectives, and instead pursue policy objectives as a means to improving their business climate. Companies exist to sell things. This provides insights into how they go about seeking political influence because their audience is a group of people that may not agree with them politically. This chapter also discusses where political influence happens (i.e., anywhere there are governments) and provides an overview of the book.
In this chapter, I test whether concerns about public backlash actually translate into changes in corporate political behavior. The theory suggests that companies that are worried their political advocacy might get them into hot water with the public and thereby imperil their reputation and brand ought to take one of two broad strategies: either hide their political behavior or take steps to make the activity more palatable to the public. I test this using federal campaign contributions and lobbying data. The evidence suggests that both campaign contributions through PACs that share the company’s name and direct lobbying at the federal level are relatively rare and that companies that cite concerns about social media and reputation damage in their 10-Ks are less likely to engage. Having demonstrated that these companies are less likely to do these things raises the question of what, if anything, they are doing instead, which I address using interviews. I find strong evidence that companies take concerted steps to both hide their political advocacy and somewhat weaker evidence that they try to make it more palatable.
In this chapter, I explain how fear of a public backlash shapes how companies engage in the political system. I outline a probabilistic chain of events that can lead from a company engaging in advocacy to being noticed and criticized by activists, to that criticism spurring a larger public response, to eventual damage to a company’s brand and reputation. Certain attributes of companies and advocacy strategies change the probability of each of these events happening, which means that (a) some companies are inherently more vulnerable than others and (b) companies can take intentional steps to reduce these probabilities in order to engage in advocacy while skirting damage. This chapter produces a set of expectations I test in the remainder of the book – that public backlash to corporate advocacy is a form of political speech and signaling rather than a statement about consumer behavior; that companies fear this backlash and “boycotts” primarily because of fear of brand damage, not necessarily sales; and that companies engage in particular strategies to either hide their political advocacy or defuse the public anger over it.