Creating Political Advantage: The Rise of the Corporate Political Entrepreneur

See, for example, Edsall Thomas Byrne , The New Politics of Inequality (New York, NY: W.W. Norton & Company, 1984), pp. 107–140; Levitan Sar Cooper Martha , Business Lobbies: The Public Good and the Bottom Line (Baltimore, MD: Johns Hopkins University Press, 1984); and Wilson Graham K. , Interest Groups in the United States (New York, NY: Oxford University Press, 1981).

Bauer Raymond A. de Sola Pool Ithiel Dexter Lewis Anthony , American Business and Public Policy (New York, NY: Atherton Press, 1963).

According to the 1982 edition of Washington Representatives, 2445 individual firms were represented in Washington. Of these, 545 had offices there.

Cherington Paul W. Gillen Ralph L. , The Business Representative in Washington (Washington, DC: The Brookings Institution, 1962), p. 11.

Ibid., p. 16.

Dexter Lewis Anthony , How Organizations are Represented in Washington (Indianapolis and New York: The Bobbs-Merrill Company, Inc., 1969), p. 42, ft.

Miller Robert W. Johnson Jimmy D. , Corporate Ambassadors to Washington (Washington, DC: The American University, Center for the Study of Private Enterprise, 1970), p. 22.

McGrath Phyllis , Redefining Corporate-Federal Relations (New York, NY: The Conference Board, 1979), p. 64.

On PACs, see, for example, Handler Edward Mulkern John R. , Business in Politics (Lexington, MA: Lexington Books, 1983); and Malbin Michael J. , ed., Parties, Interest Groups, and Campaign Finance Laws (Washington, DC: American Enterprise Institute for Public Policy Research, 1980). On business use of grass-roots, see, Loomis Burdett , “A New Era: Groups and the Grass Roots,” in Cigler Allan J. Loomis Burdett S. , eds., Interest Group Politics (Washington, DC: CQ Press, 1983); and Grefe Edward , Fighting to Win (New York, NY: Harcourt Brace Jovanovich, 1981).

Yoffie David B. , “Interest Groups vs. Individual Action: An Analysis of Corporate Political Strategies,” Harvard Business School Working Paper, no. 9-785-018, Rev. 8/85.

On collective goods, see, for example, Frohlich Norman Oppenheimer Joe , Modern Political Economy (Englewood Cliffs, N.J.: Prentice-Hall, 1978); Frohlich Norman Oppenheimer Joe Young Oran , Political Leadership and Collective Goods (Princeton, NJ.: Princeton University Press, 1971); Moe Terry , The Organization of Interests (Chicago, IL: University of Chicago Press, 1980); and Olson Mancur , The Logic of Collective Action (Cambridge, MA: Harvard University Press, 1965). On business policy, see, Andrews Ken , The Concept of Corporate Strategy (New York, NY: Dow Jones-Irwin, 1971); Porter Michael , Competitive Strategy (New York, NY: The Free Press, 1982).

Stevenson H.H. Gumpert D.E. , “The Heart of Entrepreneurship,” Harvard Busienss Review 63, no. 2 (March/April 1985): 85–94.

These changes are described by Edsall, op. cit.

McQuaid Kim , “The Roundtable: Getting Results in Washington,” Harvard Business Review 59, no. 3 (May/June 1981): 114–123.

American Express Annual Report, 1981.

Quoted in Yoffie David B. Badaracco Joseph L. Jr. , “Trade in Services and American Express Corporation,” Harvard Business School case no. 9-383-114.

Interviews with Harry Freeman, Executive Vice President, American Express; James Robinson, Chairman and CEO, American Express; and Joan Spero, Senior Vice President, American Express.

The importance of Freeman to the organization is clearly illustrated by his subsequent rise in the ranks of AmEx. In the late 1970s, Freeman was moved to New York and promoted to a senior vice president, with responsibilities that expanded into strategic planning and communications. By 1984, Freeman became an executive vice president, making him one of the top ten executives in the corporation. Governmental affairs has remained one of his principal responsibilities.

Eventually, American Express along with American International Group, helped to establish the Coalition of Service Industries in 1982. Yet it was only after AmEx had become the clear speaker on the issue, that it decided to create a formal group. The company hoped that the coalition would absorb the increasing costs of developing the issue.

Financial Times, November 25, 1984.

Testimony of C. Gus Grant, SP Communications Corp. before the Subcommittee on Communications of the House Commerce Committee. Competition in the Telecommunications Industry (Washington, DC: USGPO, 1977), p. 288.

On the failure of companies and associations to support MCI, see, McCray Lawrence E. , The Politics of Regulation: Multifirm Trade Associations in Telecommunications Policy-making, Ph.D. dissertation (Boston, MA: MIT, 1974), pp. 89–95.

For a chronology of MCI's efforts to raise capital between 1971 and 1974 see, Shapiro Peter D. , Public Policy as a Determinant of Market Structure: The Case of the Specialized Communications Market, Harvard University Working Paper 74–10, pp. 161–64.

Interview with Wunder Bernard , former staff member of the House Telecommunications Subcommittee, and former Assistant Secretary of Commerce in the Reagan Administration.

For summaries and critiques of AT&T's main arguments against competition in long distance telephone service see, Evans David S. , ed., Breaking Up Bell (New York, NY: North-Holland, 1983).

MCI claims that they were largely responsible for getting the Justice Department to file its antitrust suit against AT&T in 1974; meanwhile, the Justice Department viewed its role as independent of MCI's influence. Officials thought that breaking up AT&T's monopoly was in the pubic interest, and that any action which endangered MCI would be detrimental to future competition. Interview with Kenneth Cox, Sr. Vice President, MCI; Datamation, October 1976, p. 146.

Interview with Herbert Jasper, executive vice-president of the Ad Hoc Coalition for Competitive Communications.

Interview with Cox Kenneth , Senior Vice President, MCI.

Interview with A.G.W. Biddle, President, Computer and Communications Industry Association.

Cited in Cespedes Frank W. , “MCI Telecommunications Corporation (A),” Harvard Business School case no. 9-582-106; MCI did not operate any telecommunications facilities until 1972 and it did not make any profits until 1977. It was not until 1978 that it started to compete in the entire range of services in the long distance market.

In 1980, MCI was awarded $1.8 billion. An appeals court ordered a new trial on damages. MCI sought $5.8 billion arguing that Execunet service should be included in the case. However, in May 1985, MCI was granted only $113.3 million. Subsequent trials will deal with post-1975 alleged damages. Electronics News, June 3, 1985. The Justice Department antitrust suit, also initiated in 1974, was settled in 1982 when AT&T agreed to divestiture of the local operating companies. AT&T was also released from an earlier consent decree that had restricted the lines of business in which it could compete.

Interview with Herbert Jasper.

Wall Street Journal, September 28, 1981.

Strassburg Bernard , Datamation, May 1975, p. 148. Strassburg was chief of the FCC's common carrier bureau in the late 1960s when the initial decisions to introduce competition into telecommunications markets were made. After leaving the FCC he continued to propagate the benefits of competition and was instrumental in establishing the Ad Hoc Committee for Competitive Telecommunications.

Bower Joseph L. , The Two Faces of Management (Boston, MA: Houghton-Mifflin, 1983).