Does Social Activism Disrupt Corporate Political Activity?

The use and efficacy of corporate political activity has been well researched in the past, but a new paper published in Administrative Science Quarterly from authors Mary-Hunter McDonnell and Timothy Werner is taking a new perspective of corporate political activity. The paper, entitled “Blacklisted Businesses: Social Activists’ Challenges and the Disruption of Corporate Political Activity,” focuses on how large scale activist protests disrupt corporations’ ability to influence political stakeholders. Mary-Hunter McDonnell dives into the findings of the paper in the video below:

The abstract for the paper:

This paper explores whether and how social activists’ challenges affect politicians’ willingness to associate with targeted firms. We study the effect of public protest on corporate political activity using a unique database that allows us to analyze empirically the Current Issue Coverimpact of social movement boycotts on three proxies for associations with political stakeholders: the proportion of campaign contributions that are rejected, the number of times a firm is invited to give testimony in congressional hearings, and the number of government procurement contracts awarded to a firm. We show that boycotts lead to significant increases in the proportion of refunded contributions, as well as decreases in invited congressional appearances and awarded government contracts. These results highlight the importance of considering how a firm’s sociopolitical environment shapes the receptivity of critical non-market stakeholders. We supplement this analysis by drawing from social movement theory to extrapolate and test three key mechanisms that moderate the extent to which activists’ challenges effectively disrupt corporate political activity: the media attention a boycott attracts, the political salience of the contested issue, and the status of the targeted firm.

You can read “Blacklisted Businesses: Social Activists’ Challenges and the Disruption of Corporate Political Activity” from Administrative Science Quarterly free for the next two weeks by clicking here. Want to keep current on all of the latest research from Administrative Science QuarterlyClick here to sign up for e-alerts!

The Ethics of Corporate Political Spending

In a recent blog post on The Hill calling for the SEC to adopt a new rule on disclosure of public companies’ political spending, the authors wrote:

If money from our business accounts is used for political spending, we’d better well know about it. It would be a sign of dangerously poor management if we did not. Yet, under current practice corporate funds can be spent in exactly this way, without the owners’ knowledge, at the largest public companies in America. [thehill.com]

Business & Society has published a new Special Issue: The Governance Challenges of Corporate Political Activity. In the article titled “Corporate Dystopia: The Ethics of Corporate Political Spending,” Miguel Alzola of Fordham University wrote:

This article is concerned with the moral permissibility of corporate political activities under the existing legal framework in the United States. The author unpacks and examines the standard case for and against the involvement of business in lobbying and electoral activities. And the author provides six objections against the standard arguments and proposes that the wrongness of corporate political activities does not have much to do with its BAS_v50_72ppiRGB_150pixWpotential social consequences but rather with nonconsequentialist considerations. The author’s ultimate aim is to make sense of the intuition that corporate political spending is morally objectionable. The author argues that his case against corporate political spending fares better than the standard case. What is wrong with the current system of regulation of corporate lobbying and campaign finance is that it is inconsistent with the principles of political equality and consent. By taking advantage of this unfair regulatory framework, business firms are making a contribution to undermine the basis of a robust democratic regime at both the societal and the corporate level.

Continue reading the article online in Business & Society, and browse the rest of the Special Issue here.

CALL FOR PAPERS FOR A SPECIAL ISSUE OF BUSINESS & SOCIETY

The Governance Challenges of Corporate Political Activity 

Click here for the Call; Papers Due November 15, 2010!

Guest Editors:

Nicolas Dahan, Long Island University, CW Post Campus, New York, USA

Michael Hadani, Long Island University, CW Post Campus, New York, USA
Douglas A. Schuler, Rice University, Texas, USA
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