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Chapter 4 Private Politics and social pressurePrivate 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 environment1)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 NMenvironment.4)Individual interest groups and activists provide info that influences public and private politicsThe 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 boycottSusceptibility to private politics:-ProductsoConsumer productsoProducts with low switching costsoBrand name that can be damaged-Operating environmentoActivities that produce harmful externalitiesoOperating in an interest group rich environmentoGlobal operations – issues can spill over to other countriesThe effectiveness of private politics social pressure depends on a variety of factors:1)The social value achievedby causing a potential target to change its practices.2)How tough the potential targetis – cost of changing its practices.3)How vulnerable the targetis – brand equity, reputation.
4)The extent to which targets takes into account the social value of a changein their practices when making their decisions – accepting social responsibility.