The Evolving Political Marketplace: Revisiting 60 Years of Theoretical Dominance Through a Review of Corporate Political Activity Scholarship in Business & Society and Major Management Journals

Abstract

We review articles about corporate political activity (CPA) published in Business & Society since its beginnings 60 years ago and in a set of other leading management journals over the past decade. We present evidence that most studies of CPA use the political markets’ perspective. Under the premise that the contemporary political environment has changed significantly since the inception of the political markets’ perspective, our review asks two interconnected questions. First, to what degree have changes in the political environment challenged the ability of the political markets’ perspective to understand the pillars of politics: issues, institutions, interests, and information? Second, to what degree have CPA scholars augmented or diversified their theoretical arguments to accommodate these changes in the political environment? We document the CPA literature across these dimensions and questions and note that many scholars are already adopting other theories side by side with the political markets’ perspective.

The Management of Socio‐Political Issues and Environments: Toward a Research Agenda for Corporate Socio‐Political Engagement

“…CPA research in the management field can trace its roots to a variety of social-science disciplines, including political science, economics, and sociology. Specifically, a dominant political marketplace perspective (Bonardi et al, 2005;Katic and Hillman, 2023;Lenway et al, 2022) in this literature originates from positive political theory (e.g., Riker and Ordeshook, 1973) and public-choice economics (e.g., Buchanan, 1987;Tullock, 1972). Regarding the former, Epstein's (1969) seminal book -The Corporation in American Politicsstudied the role of CPA in changing the legal constraints facing large corporations, while Barnet and Müller (1974) examined the various roles of multinationals in influencing national governments.…”

Bargaining and Nonbargaining Nonmarket Strategies: A General Model and Data From Post-Communist Countries

“…She and other scholars made a compelling case for “bringing the state back in,” or giving due attention to situations in which states act independently off societal, and in particular, corporate pressures. Unlike the politics-as-a-market consensus of the CPA literature (Lenway et al, 2022), the neo-statists see states as independent, causal forces “shap[ing], enable[ing], or constrain[ing] economic, associational, cultural, and even social-psychological phenomena” (Goodwin, 1997, p. 9).…”

“…The emphasis on bargaining nonmarket strategies reflects the broader academic dominance of North American pluralist and rational choice political theory. This tradition regards political life as an analogue to competitive markets in which politicians “supply” favorable policies to “consumers” consisting of businesses and their interest groups (Lenway et al, 2022). Hillman and Hitt (1999) added a time dimension to this picture.…”

Corporate Political Activity, Reimagined: Revisiting the Political Marketplace

“…Lenway and colleagues (2022) document the ubiquity of the “political marketplace” as a theoretical metaphor which has provided the bedrock for CPA work for over 60 years. At its core, the political marketplace is composed of governmental actors, who supply public policy in exchange for valuable goods from various demanders, including firms (Bonardi et al, 2005; Buchanan, 1968, 1986, 1987; Hillman & Keim, 1995).…”

“…First, we amend the oft-evoked conceptualization of the political marketplace. The political marketplace has been a key conceptual tool in our field for several decades, dominating other theoretical approaches in CPA (Lenway, Schuler, Marens, Werner, & Green, 2022). These amendments and additions allow us to build an updated model which we call political marketplace 2.0.…”