With the dynamic changes in the world of trade, corporate institutions are in the constant competition to gain more control of their markets. These institutions are therefore taking nothing to chance in terms of opportunity maximization. Politics has gradually found its way into business and the vice versa (Denhardt). This is because politics has become a potential business arena. Therefore, companies in different countries engage in political activities with the goal of securing merits for themselves hence constituting (Drucker). Corporate Political Activity (CPA) (Denhardt). Companies engage in CPA in various forms depending on the country (Drucker).
Institutions may choose to directly be involved in politics through contributions by financing political campaigns, being members of trade unions and movements, lobbying, including political officials in their executive management, influencing public opinions through adverts and social community promotions through advocating (Drucker).
In the recent past, CPA has been dominated by lobbying (Drucker). This is because recent governments have greater influence on their countries’ economies to the extent of affecting the net sales and the general returns of products in particular firms (Denhardt). Decisions made by these governments economically affect a large number of distinct companies (Drucker). The decisions may vary such as from imposing quotas and tariffs on goods imported, the award or sale of spectrum, drafting rules and regulations on dumping and the approval of alternative methods of energy production (Drucker).
Lobbying is widely regarded as the activity of trying to influence legislative decisions (Frese). The process of lobbying may be undertaken by advocacy groups, different individuals, organised groups and association or even government legislators and officials. Lobbyists try to persuade lawmakers to support or vote against particular policies depending on their implications. Lobbying has steadily grown and has become an endemic in many countries due to its numerous advantages (Frese).
Lobbying can be done directly by communicating certain point of view to government officials or legislators who have voices in matters of legislation (Frese). Direct lobbying may be done to ask the official to initiate the process of drafting even if there is no bill currently on going. It can also be done indirectly in the grassroots. This is where a particular view is communicated to the general public and the citizens are asked to pass the information to their political representatives. In some instances, the public is provided with the phone number or address of a certain legislator (Denhardt).
Lobbying is practically significant as lobbyists carry out research on behalf of their clients. They research on matters of public policies, the general economic and political trends and give an elaborate analysis of the gathered information (Denhardt). This equips their clients well enough to be able to support their claims in the process of legislation. The lobbyists provide policy advocacy to their clients. Those lobbyists, who understand their clients’ concerns and interests better, add value to the process of policy discussion. Lobbyists help their clients to come up with strategies that are timely and influential (Greer).
Moreover, lobbying helps create and maintain relationships with government officials and influential leaders. Such relationships built on respect and integrity open up avenues to access government favours (Denhardt). It opens up networks through attendance of community based charity boards, government meetings and active participation in the political parties (Greer).
Additionally, lobbying provides corporate institutions with the required experience on government processes. A lobbyist knows the required procedures and the obstacles involved in the entire process of advocating for their interests (Greer). Through public relations and continuous advertisements, a lobbyist is able to learn the various means a client company is can improve its communication skills to the public including customer care services. Nevertheless, lobbyists help their clients identify their target market and assist them in the development of their message they intended to pass across (Denhardt). Firms that may want to sell services or their products to the state agencies may find it difficult due to the lengthy process involved in securing a bid. However, with the help of a lobbyist who is vast with procedures of procurement and has established relations with legislators, the company can smoothly navigate the usually complex procedure and win the desired bids (Frese).
Occasionally, corporate institutions may have projects that require public funding or financial assistance from the government. Lobbyists help their clients obtain valuable counsel from finance officials in the government who are experienced in the sector of economic development and financing (Frese). Projects may merit funding depending on certain things, including; the location, the public good and the potential of employment creation. Therefore, lobbyists may meet such knowledgeable individuals such as the accountants and the government attorneys in the early stages of the process. Their clients will therefore get better advice on matters such as the strategies of negotiation with potential investors and the proper methods of generating tax-efficient business structures (Greer). In addition, in case their clients receive local appropriations or state funding, the lobbyists will be in charge of the budgeting and the financial decisions (Greer).
Lobbying is a cost effective method of CPA if done by an individual as compared to a group. Gathering the needed information such as scheduling meeting with government officials, setting the time and place of meeting and coming up with what to say may prove to be labour intensive (Frese). However a lobbyist can prepare all these required information early hence cost effectiveness is achieved. Moreover, the lobbyist can advocate for several clients at once (Greer).
Additionally, corporate lobbying has promoted public participation in civic processes (Greer). Grassroots lobbyists have used various means to reach to the public and relay important information about a specific agenda (Greer). They have travelled wide, used the social media, spoken and written to increase the public awareness on different issues and concerns. They have compelled the society to respond to the issues (Frese). By enlightening the public, lobbyists have indeed involved a large group of citizens in a country to participate in the civic process. In many countries of the world, lobbyists are privately owned and financed and thus there is no usage of the public funds (Frese). They are funded to gather the required information by the legislators. Therefore, the public officials do not have to incur costs in the process of data collection research on public opinion. In the process, the taxpayers’ money is saved.
Above all, lobbyists who are excellent in their work and have desirable reputation in the surrounding society, act with regard to corporate ethics on behalf of their clients and make reasonable political contributions for the benefit of their clients (Frese). Corporate institutions in a country that participate effectively in lobbying, have and continue to benefit more on the results of political activities. It has been a misconception that lobbyists engage in advocacy on behalf of large business corporations. Lobbyists however also advocate for the interests of the minority associations (Frese). They represent the small groups and individuals that would have otherwise not been heard. Due to their professionalism, lobbyists have the ability and resources to influence the outcome of legislation that minority groups and individuals may not have the ways to.
Despite the numerous merits of lobbying, corporate institutions have also incurred mentionable losses as a result of lobbying. It is relatively hard for many lobbyists to access the required information from public officials and legislators. Moreover, this may hinder the possibility of establishing a strong link between the legislator and the lobbyists’ clients (Keijzers). It rules out the chances of building trusting relations. Thus, the lobbyists have to work extremely hard to gain trust from the legislators. In some instances, lobbyists who initially were public officials may have built undesirable reputation. This in turn limits their accessibility chances to the vital information (Keijzers).
Additionally, the task of a lobbyist may seem exciting and attractive as it may be fast-paced. However, it may occasionally take longer durations hence requiring lengthy working hours. In the event that an important bill is in the process of legislation, lobbyists have to work tirelessly to ensure the desired outcome is arrived at (Keijzers). Moreover, lobbyists may have to work late into the night, making the necessary phone calls, writing relevant letters and coming up with strategies on how to involve the general public in the civic processes. Lobbyists the task of ensuring those public officials and the legislators are aware of the current information. Meeting deadlines and tight job schedules can at times be draining (Keijzers).
Often, lobbyists represent a number of clients. They therefore have to attend multiple committee meetings and occasionally they have to juggle their schedule in order to achieve this (Frese). Moreover, lobbying can become an uphill task since the lobbyists have to address multiple legislators in the process of representing their different clients. This may significantly reduce their effectiveness. It is also time consuming and tiresome. Lobbyists are therefore forced to budget their limited time to serve each of their clients effectively.
The process of lobbying is occasionally criticised by the society. Many people often have a negative attitude towards lobbyists (Frese). They regard them as corrupt individuals or corporate bodies that are mostly concerned with their own self interests. Most people associate lobbying with unscrupulous behaviours and financial scandals. Nevertheless, lobbyists are considered to pay for their political influence through bidding (Frese). Moreover, lobbying is sometimes regarded as being an unfair game. Co-operatives with greater financial ability have larger and influential lobbying bodies as compared to individuals and smaller enterprises (Frese). Therefore such institutions with greater financial capabilities can easily influence politicians in favour of their interests as compared the smaller organizations. Consequentially, legislative decisions may not be arrived at based on the weight of the issue or the number of groups that will benefit but may rather be influenced by the amount of wealth involved. This in turn promotes corruption in a country (Kerr).
Although lobbying serves to advocate for corporate interests, it may also affect the outcome of an election in a country (Kerr). Large influential lobbying groups may use their available financial resources to support a particular candidate. They can also campaign indirectly for their preferred candidate such as by paying the media adverts, publicizing the candidate through the social media and promoting fliers by email (Frese). Not only does this discredit the whole process of election but also undermines the significant aspect of a democratic nation (Kerr). This concept of allowing the influence of money or wealth to take precedence over the voice of the nation undermines the establishment of a country’s government. In the event that the supported candidate wins the election, he/she becomes obliged to favour the lobby group’s interests in future bills during the process of legislation (Frese).
The process of lobbying has a negative influence on the entire process of legislation. In most cases, lobbyists hinder a legislature from delivering fair decisions since a lobbyist will obviously present biased pieces of information that is in support of their ideas to the legislator (Kerr). This undermines the clarity of the whole issue since the lobbyist is only concerned with luring the legislator to favour the clients’ opinions. In the end bureaucracy is not achieved.
Moreover, lobbyists will occasionally disrespect the rights and freedom laid down in the constitution in the process of advocating for their issues (Frese). They sometimes fail to realise that they are infringing the freedom and rights of others as they are blinded by the pursuit of their interests. In addition, some large influential lobby groups may intentionally break the laws since they have the financial means to go through unpunished.
Apart from lobbying corporations engage in political activity through joining trade unions and movements (Romer). These movements are regarded as organizations in which workers come together to attain a common voice for relaying their concerns to their employers. These trade unions have both positive and negative impact on the general economy of a country. One advantage of such trade movements is that they simplify the process of negotiation (Romer). Multiple corporates do not need to send all their workers to negotiate with the employer. Instead, the union heads of the unions represent the corporations in the negotiation process, hence it becomes faster and more efficient. Employers too do not have to worry about engaging in talks with many people (Romer).
Additionally, employees in the corporations feel a sense of satisfaction when they are in trade unions. They feel they have a voice that speaks for them. Employers can easily increase their net wages due to the mass influence. When their needs are met, the quality of production becomes high since the workers become more willing to work better. In the long run, the economy of the country is significantly improved (Frese).
Moreover, corporations with the trade unions usually have any easy time when it comes to imposing changes in the company (Romer). Companies can involve the union actively in the process of policy making and participation in initiating the change. The employer can pass the required information to the union officials who in turn deliver the piece of information to the rest of the workers. This smooth flow of information enhances the relationship between the employees and their employer.
Through the unions, members are able to organise events such as recreational activities, community based development activities that include market cleaning. They can also organise cultural events to promote the culture of the surrounding society (Frese). This promotes socialisation among the workers and strengthens the bond among the employees (Schwarz). Moreover the workers can establish several welfare associations for their own financial gain. Corporations have generally used these trade unions and movements to participate in political activities either actively or passively (Frese).
Despite having numerous advantages, trade unions too have disadvantages. When there is competition for human resource, unemployment will be caused by increased salaries and wages (Schwarz). By issuing threats about strikes over salary increments, trade unions can cause the salary to increase above the equilibrium. Moreover, when the salary is raised above the equilibrium, the rate of employment is lowered (Schwarz). This is a negative implication to the country’s economy. Additionally, trade unions have prioritised the interests of their members and in the process do not consider the needs of the non-members. They are quick to advocate for the increase in salaries of the members but may hardly consider advocating for the employment of the unemployed (Schwarz).
In the event that a strike occurs and union workers decide to abscond off duties, the net output will drastically reduce hence low return on sales (Schwarz). The company will eventually incur losses and therefore cannot employ more workers. The country’s economy will be negatively affected. Trade unions therefore pose a greater danger to the general economy of a nation and their actions must be regulated to avoid extreme economic conditions (Frese).
In some countries trade unions and labour movements have become so strong and influential (Frese). Such unions may advocate for increase in salaries and wages of their members. The employer may be forced to increase the wages higher than the level of inflation. This may lead to inflation of a country’s general economy (Steiner).
Trade unions may also affect the political activities of a country both directly and indirectly. Officials of certain trade unions and labour movements are usually included in the managerial boards of government parastatals
(Steiner). The trade unions therefore have a greater influence on the legislation process in a country since they are involved in the decision making process. They often tend to draft bills that are in favour of their union members without much consideration of the non-members (Steiner).
Besides the economic role such as production of quality goods and services, utilisation of the country’s economic resources, creation of employment opportunities and paying taxes to the government, corporations too have political roles to play towards the government of the country. Corporate citizenship is a concept that visualises corporations as a citizen of the country and has all the obligations a citizen has to the government of the country (Frese).
Corporations have the responsibility to respect the rights and freedom of other citizens in the country. Occasionally, some corporations tend to infringe the human rights of the citizens in the process of advocating for their interests (Steiner). Due to their great financial ability, they sometimes undermine the freedom of others and go unpunished. Additionally, corporations have the obligation to maintain an enabling environment in their surrounding for the well-being of the people in the locality. Corporations ought to control their environmental pollution so as to maintain a healthy environment. Noise from the factories is one of the major causes of pollution. Corporations should use the appropriate modern technology to prevent excessive noise in the surrounding.
Moreover, corporations have the duty to uphold the democracy of a country. Political Activity Committees (PAC) have in the recent past been associated with sponsoring a candidate for election with an aim of securing future support from the candidate .These committees have always been perceived as corrupt bodies. PACs should therefore support election candidates on the basis of their merits rather for their own selfish gains (Steiner). When a candidate is elected on the basis of merit, democracy is promoted.
Nevertheless, corporations should be involved in the sponsoring of community development projects such as establishment of schools and hospitals in the community. They can also participate in infrastructure development such as the construction of roads. In addition they can finance hospitals to buy drugs and other equipment, supply books to schools and also finance the supply of mosquito nets to the community people. In doing so they are helping the government in delivering services to the citizens of the nation (White).
Moreover, corporations may spearhead the political awareness to the people through various ways such as grassroots lobbying and advertisements. They should help the government in creating the awareness to the society and showing the citizens the need to participate in the civic and democratic processes. Corporations may do so through media advertisements and social media platforms (Westra). They may use road show caravans in emancipating large crowds of people the importance of participating in democratic processes such as elections and giving views in the opinion polls. In addition, they may organise sporting and other cultural events that bring people from different parts of the country. Such platforms can be used to educate the people on the significance of actively participating in the proceedings of the government.
Additionally, trade unions and labour movements should give the government advice on the current trends in the business market rather than constantly issuing strikes that may lead to unrest in the country. Corporations should be on the forefront in helping the government to initiate national projects that are long-term solutions to problems in the country (Westra). They should give both financial support and advice for proper management of the funds. Moreover, these corporations may propose potential investment opportunities to the government. Such projects provide employment opportunities to the citizens which in turn improves the economy of the nation.
During emergencies times, the corporations can step in together with the government and offer a helping hand to the affected groups. When a part of the country is drought stricken, the corporations can come in and offer charity food to the affected, participate in the planting of drought resistance crops in the area. This collective responsibility in helping the needy is a forward step in promoting peace and socialisation in the country (Westra).
Above all, corporations have continued to actively and passively participate in the political activities of a country for reasons mentioned above. The economy of a country may have positively gained from such involvement of the corporations in politics. While this is commendable, such activities have also resulted to negative implications on the economy as evident above in such cases as strikes by trade unions and labour movements. A country’s government too benefits from the corporation political activities with great impact. However, some legislative processes end up being biased or slowed down due to involvement of many parties in the entire process of legislation (White).
- Denhardt, Robert B., and Janet Vinzant Denhardt. The Dance of Leadership the Art of Leading in Business,
- Government, and Society. Armonk, N.Y.: M.E. Sharpe, 2006. Print.
- Drucker, Peter F. The New Realities: In Government and Politics, in Economics and Business, in Society and World View. New York: Harper & Row, 1989. Print.
- Frese, Joseph R. Business & Government. Tarrytown, NY: Sleepy Hollow and Rockefeller Archive Center, 1985. Print.