topic A.4.docx - Chapter 4 Private Politics and social pressure Private politics focuses on changing the behaviour of private economic agents not

topic A.4.docx - Chapter 4 Private Politics and social...

This preview shows page 1 - 3 out of 5 pages.

Chapter 4 Private Politics and social pressure Private politics – focuses on changing the behaviour of private economic agents not through government action but thru social pressure and threat of harm to the business. These are led by NGO (non-government officials) and social activists. Private politics and the NM environment 1) Those initiating private politics can identify issues about which management either is unaware or has not understood as important to others. 2) Social activists and NGO’s can affect the organization of interests by forming watchdog and advocacy groups and by mobilizing people to work for causes. 3) The social pressure these groups exert can affect the institutional configuration of the NM environment. 4) Individual interest groups and activists provide info that influences public and private politics The evolution of private politics - Corporate and market campaigns use similar confrontational tactics : activists makes a demand on a company to change its practices and explicitly threatens the company with harm if it doesn’t do so. - Cooperative tactics: worked with companies to reduce threats to the environment, human rights, and social welfare. Confrontational private politics - Focus on social issues such as the emissions of toxic substances, workers rights, rainforest conservations, predatory lending. - Activists organize corporate and market campaigns to advance the issues on their agenda – could lead to a boycott Susceptibility to private politics: - Products o Consumer products o Products with low switching costs o Brand name that can be damaged - Operating environment o Activities that produce harmful externalities o Operating in an interest group rich environment o Global operations – issues can spill over to other countries The effectiveness of private politics social pressure depends on a variety of factors: 1) The social value achieved by causing a potential target to change its practices. 2) How tough the potential target is – cost of changing its practices. 3) How vulnerable the target is – brand equity, reputation.
4) The extent to which targets takes into account the social value of a change in their practices when making their decisions – accepting social responsibility.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture