Business & Society

Researching the organization and management of international public affairs (IPA) in the then-new multinational enterprises (MNEs) started in the 1960s. At first, IPA studies kept fairly good pace with what was known about the MNEs' nonmarket environments, their structurings, and their processes. After 1980, a disconnect developed in our knowledge of these three interrelated topics. In particular, much of more recent IPA research (a) fails to reflect the true scope, real actors, and organizational location of the IPA function; (b) remains focused on old issues (e.g., the hierarchical relationship between headquarters and subsidiaries); (c) is mired in complex statistical analyses of remote data; (d) uses relevant theories in rather marginal ways; and (e) overlooks the impact on IPA of such important developments as mergers, acquisitions, and divestments. Yet, investigators can stretch their research methodologies and refocus their studies on the organization and management of the two faces of public affairs—offensive and defensive—in the context of new nonmarket threats and opportunities.

This article draws attention to an understudied phenomenon, transnational political alliances (TPA), which occur when multinational corporations cooperate with local companies to influence public policies of the host government. The article first explores the economic and political sources of TPAs, their structures, and the obstacles to their formation. It then examines TPAs in the context of China, a critical case because of the hostile political environment that discourages TPAs. However, the surprisingly common occurrence of TPAs in China indicates the power of economic incentives for political cooperation yet also suggests the need for further studies of TPAs in a wide variety of economic and political settings.

This article explores the international dimensions of multinationals' corporate political activities, focusing on an international issue—climate change—being implemented differently in a range of countries. Analyzing data from Financial Times Global 500 firms, it examines the influence on types and process of multinationals' political strategies, reckoning with institutional contexts and issue saliency. Findings show that the type of political activities can be characterized as an information strategy to influence policy makers toward market-based solutions, not so much withholding action on emission reduction. Moreover, multinationals pursue self-regulation, targeting a broad range of political actors. The process of political strategy is mostly one of collective action. International differences particularly surface in the type of political actors aimed at, with U.S. and Australian firms focusing more on nongovernment actors (voluntary programs) than European and Japanese firms. Influencing home-country (not host-country) governments is the main component of international political strategy on climate change.

Observers generally assume that firms which engage in lobbying know what they want. Business—government relations and especially the corporate political activities of network operators during the basic telecommunication negotiations of the World Trade Organization present a slightly different picture. European monopoly providers benefited from the old international regime and initially ignored trade discussions in their sector. In the course of negotiations, however, they became part of a three-level game, which obliged them to consider national, European, and multilateral objectives simultaneously. In the course of these complex negotiations, their preferences evolved. Because governments advanced independently on the liberalization project, companies adapted their policy stances from reluctance to support for the negotiations. This article thus cautions against treatments of lobbying that consider preferences as exogenously given.

A proposed global theory of corporate political activity (CPA) analyzes the complex resource allocation choices involved in integrating politically relevant cross-border and multilevel strategies for multinational enterprises (MNEs). Cross-border CPA is “horizontal” allocation of scarce corporate resources by MNEs to politically relevant strategies across multiple countries. Globalization reshapes CPA among multiple levels functioning below, at, and above national governments. Subnational communities and international policy regimes, supranational quasigovernmental institutions, and supranational nongovernmental organizations all affect businesses. Multilevel CPA is “vertical” allocation of scarce corporate resources to politically relevant strategies among subnational, national, regional, and global levels. Furthermore, in each country and at each level, business-relevant policies are determined in multiple policy arenas, shaped by widely differing nonmarket institutions, corruption conditions, and stakeholder demands for corporate social responsibility. Multiple policy “arena” allocation adds to the analytical complexity of the CPA strategizing problem. Implications for scholarship and practice are presented.