Specific political strategies whether acting

 SPECIFIC POLITICAL STRATEGIES. Whether acting reactively or proactively, managers can employ
four major strategies.
1. Campaign financing. Although federal law prohibits U.S. corporations from backing a specific candidate or
party with the firm’s name, funds, or free labor, a legal alternative is available. Corporations can form political
action committees (PACs) to solicit volunteer contributions from employees biannually for the support of preferred
candidates and parties. Significantly, PACs are registered with the Federal Election Commission and are required
to keep detailed and accurate records of receipts and expenditures.
Some criticize corporate PACs for having too great an influence over federal politics. But a recent MIT study
found no positive correlation between corporate political giving and subsequent profitability. The researchers
concluded that companies should spend their money in more productive ways. Meanwhile, legislators are reluctant
to tamper with a funding mechanism that tends to favor those already in office.
2. Lobbying. Historically, lobbying has been management’s most popular and successful political strategy. Secret
and informal meetings between hired representatives and key legislators in smoke-filled rooms have largely been
replaced by a more forthright approach. Today, formal presentations by well-prepared company representatives are
the preferred approach to lobbying for political support.
Despite reform legislation from the U.S. Congress intended to correct abuses, loopholes, and weak penalties for
inappropriate gifts, it is pretty much business as usual for corporate lobbyists. For example, phone companies
AT&T and Verizon spent $22.4 million and $21.8 million, respectively, lobbying in Washington in 2006.
3. Coalition building. In a political environment of countless special-interest groups, managers are finding that
coalitions built around common rallying points are required for political impact.
4. Indirect lobbying. Having learned a lesson from unions, business managers now appreciate the value of
grassroots lobbying. Members of legislative bodies tend to be more responsive to the desires of their constituents
than to those of individuals who vote in other districts. Employee and consumer letter-writing, telephone, and e-
mail campaigns have proved effective.
Advocacy advertising, the controversial practice of promoting a cause or point of view along with a product or
service, is another form of indirect lobbying that has grown in popularity in recent years. But it may not be as
effective as hoped, judging from a recent survey of 1,066 adults: “Only 14% said they intentionally paid more for a
product that supports a cause.” The Internet is also becoming an effective indirect lobbying tool.