The Effectiveness of Strategic Political Management: A Dynamic Capabilities Framework

Car manufacturers’ changing political strategies on the ZEV mandate

“…The Resource Based View perceives the firm's assets as the base of its competitive position and stresses that value arises from using internal resources to exploit opportunities in the firm's environment (Barney, 1991). Accordingly, the CPA literature argues that firms may attempt to shape their political environment to maintain or create value (Oliver and Holzinger, 2008;Buysse and Verbeke, 2003). Value maintenance refers to maintaining the status quo, while value creation refers to exploiting early mover advantages.…”

“…Political influence strategies utilize CPAs to shape regulation, either to maintain value in a defensive political strategy, or to create value in a proactive strategy. Firms engaging in defensive political strategies oppose regulations, like the ZEV mandate, that threaten their firm's value; they are trying to maintain the favorable status quo (Oliver and Holzinger, 2008;Stenzel and Frenzel, 2008;Hillman et al, 2004;Carroll, 1979). Proactive political strategies are intended to shape regulations so that they support the firm's creation of new value and enhance their first mover advantages (Carroll, 1979;Buysse and Verbeke, 2003;Oliver and Holzinger, 2008).…”

“…Firms employing a reactive compliance strategy aim to maintain the value of their resources and competences by aligning them efficiently and effectively with regulatory demands (Carroll, 1979;Buysse and Verbeke, 2003;Oliver and Holzinger, 2008). Firms with an anticipatory compliance strategy anticipate regulatory changes to create value and exploit early-mover advantages by aligning their resources and competences with anticipated regulatory demands (Carroll, 1979;Buysse and Verbeke, 2003;Oliver and Holzinger, 2008). Political influence strategies utilize CPAs to shape regulation, either to maintain value in a defensive political strategy, or to create value in a proactive strategy.…”

“…Political connectedness tactics enhance lobbying by providing firms direct access to relevant policy channels (Oliver and Holzinger, 2008;Mathur and Singh, 2011). Firms often attain these advantages by employing ex-policymakers (Goldman et al, 2009;Faccio et al, 2006;Agrawal and Knoeber, 2001).…”

“…The Corporate Political Activities (CPA) literature argues that in strongly regulated environments, firms may strengthen their competitive advantage by engaging in political strategies (Hillman and Hitt, 1999;Oliver and Holzinger, 2008). Consequently, the CPA literature perceives the political environment not just as a set of government-imposed constraints that impose costs on firms, but also as an opportunity set within which firms can exert influence to gain value (Oliver and Holzinger, 2008).…”