Evolutionary patterns in corporate political activity: insights from a historical single case study

Abstract

In this study I adopt an evolutionary perspective on corporate political strategy. I seek to contribute to the existing literature on corporate political activity by providing insights into how the content of corporate political strategy evolves over time within a single firm. In order to employ the intra-firm perspective, the main focus of the study is on the individual political actions of a firm. Accordingly, I consider the individual political actions as building blocks of corporate political strategy. Instead of focusing on one or a few political tactics, I examine the whole range of political actions within a firm. Thus, the purpose of the research is to move toward a dynamic and holistic firm-level understanding of corporate political activity.

A basic premise of the study is that the evolution of corporate political strategy is embedded within a broader social context that influences its pace and direction. I focus on examining how corporate political activity co-varies with three types of contextual factors: firm characteristics, industry characteristics, and institutional environment characteristics. The context in which a firm operates changes over time, and thus the relative significance of each contextual force varies over time. In addition, I claim that the contextual factors are closely interrelated, i.e., they have an influence on each other. Accordingly, I focus on examining how the dynamic interplay between these forces shapes the evolution of corporate political strategy.

In order to examine the evolution of intra-organisational political activity I employ a historical single case study. The empirical research site is Tampella Ltd., a large scale Finnish industrial conglomerate. The empirical evidence covers the time period of 1944-1991. The research design combines both qualitative and quantitative methods, including historical narrative and event data analysis of corporate political actions.

The results of the study show how the patterns of corporate political strategy co-evolve with the contextual forces. However, no single factor is the main driver of the evolution of corporate political strategy. Instead, it is the dynamic interplay within the set of conflicting contextual factors that determines the evolutionary path. Accordingly, it is suggested that the specific impact of these contextual factors will differ across firms and over time. Thus, the interaction of the factors will determine a unique pattern of evolution in each firm. Moreover, the study was able to capture the dynamics of business-government relations by stating that the conditions for political strategy decision-making evolve over time, and that these processes are path-dependent. The results suggest that a firm confronts a constantly changing environment across its own history, which in turn affects the opportunities and ways of a firm to become politically active.

In addition to the empirical contributions, the study provides also methodological contribution. I generated an analytical research framework that enables examining the long-term patterns of corporate political strategies in a systematic way.

Key words: corporate political strategy, business-government relations, process research, intra-organisational evolution, history, multidivisional firm, case study