Nature or Nurture? Sources of Firm Preference for National Health Reform

Abstract

I shall explore the process by which firms develop their political preferences, using the case of national health reform. Although rising health costs have heavily burdened many companies, I argue that economic interests alone are unable to account for the variation in firm response to the national reform effort. Rather, institutional factors, shown elsewhere to shape government decision making, also influence corporate preferences. These are (1) the institutionalization of private policy expertise within the firm, (2) firm participation in policy groups, and (3) policy legacies. These findings challenge conventional views of business political mobilization that suggest largely autonomous agents acting on the basis of easily recognized self-interests. Preference formation and corporate mobilization transpire in collective settings as a new stratum of corporate policy managers search for solutions to social problems. The primacy of economic concerns is very real. But institutional analysis explains how these economic concerns are interpreted and acted upon.

The Strategic Management of Government Affairs in Brussels

“…The few offices or divisions established in Washington were primarily in charge of sales and marketing (Yoffie & Bergenstein, 1985). However, in the 1970s we saw a steady increase in legislative activity at federal level (Martin, 1994;Wilson, 1990) and a more active approach of Presidents in incentivising business presence in Washington (Martin, 1994), coupled with a more partisan organization of the Congress and the rise of competing interests (Martin, 1994(Martin, , 1995Vogel, 1987;Vogel, 1996a;Vogel, 1996b). This led, between 1960 to 1980, to a five-fold increase in the number of companies politically active in the capital, as well as in the size of the staff representing these companies (Yoffie & Bergenstein, 1985).…”

Corporate Political Activity: An Integrated Model

“…Interviewing managers for reasons of getting engaged in CPA, (Barron, 2010) identified uncertainty reduction as the main factor. Exports has been identified as another source of uncertainty due to dependence on government and are identified as determinant of CPA (Martin, 1995;Schüler, 1999). Another determinant is firm diversification level (Hillman & Hitt, 1999;Schuler, 1996).…”

Identities and Preferences in Corporate Political Strategizing

“…Firms will differ internally, that is, they will understand themselves differently, and they will perceive different opportunities for competing or cooperating with others to achieve their goals and objectives through political action. This means that in different competitive environments, and at various points in time, firms will develop different preferences for certain political strategies and policy involvement activities (Martin, 1995). Depending on the firm's self-understanding toward the policy process and its preferred ways of realizing opportunities associated to political action, firms will be varyingly inclined to choose between, for instance, relational and transactional approaches when engaging in political Wilts / Corporate Political Strategizing 455 action.…”