PURSUING STRATEGIC ADVANTAGE THROUGH POLITICAL MEANS: A MULTIVARIATE APPROACH

D. A. Schuler, K. Rehbein, R. D. Cramer
2002 Academy of Management Journal  
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more » ... ntly changing business environment, firms with access to those who make public policy enjoy competitive advantage. To gain such access, politically active firms engage in a variety of tactics. Modeling the determinants of corporate political activity as a single, multivariate phenomenon, we demonstrate that politically active firms combine tactics. We also show that political activism, institutional features of Congress, firm size, government contracts, and industry concentration drive firms to use multiple political tactics. Spurred by globalization and technological development, firms search feverishly for sources of competitive advantage. One such source, long recognized but seldom emphasized, is government policy, which determines the rules of commerce; the structure of markets (through barriers to entry and changes in cost structures due to regulations, subsidies, and taxation); the offerings of goods and services that are permissible; and the sizes of markets based on government subsidies and purchases. Consequently, gaining and maintaining access to those who make public policy may well be a firm's single most important political goal (Clawson, Neustadtl, Access provides information that helps businesses anticipate changes in the policy environment. It is the prerequisite for building strategic alliances with legislators and regulators. Access is also said to increase a firm's ability to survive by decreasing uncertainty in the political domain We thank for their comments and suggestions on earlier versions. We also thank Scott Baggett, Kathy Ensor, and Rice University's Statistical Computing Lab for their assistance. Lou Ann Matossian and Geoffrey Carson also contributed to this article. Finally, we thank Thomas Lee and the three anonymous referees of AMJ. Any remaining errors are our own.
doi:10.2307/3069303 fatcat:q66nofxipbg5dgx2zrgnnvle44