Political Involvement

Business and the Political System

Before you read

Discuss these questions:

1. Is business naive about politics?

2. Does business counterbalance other social interests?

What does it say about the questionsabove?

Business executives must decide on the appropriate level of political involvement for their company. There are multiple levels of involvement and ways to participate. To be successful, a business must think strategically about objectives and how specific political issues and opportunities relate to those objectives.

For example, a software company that designs and manufactures products for use in computer systems around the world has a long-term and strategic interest in encouraging copyright laws and other intellectual property protection that prevent piracy of ideas and products. The time to start lobbying for such laws is not when the company’s hot new product is introduced – that is much too late. Years in advance of the product introduction, the company must be working with others in the political process to secure the intellectual property protection it will need for future generations of its products. It may need domestic laws and the government’s commitment to negotiate such protection with foreign governments.

Strategic interests may be indirect as well as direct. Many businesses have sought to persuade state, local, and national governments to improve public education. Some do so out of the belief that it is “immoral” for students to leave schools without skills to survive in the modern economy. Others have a longer-term business view: future workers who do not have sound education will create a shortage of critical and, hence, a problem for companies that will need those skills.

Business has a stake in the political system of each nation as well as in the outcome of individual issues. Politics is the way a society makes decisions about who shall have power to make important decisions (who governs), and for what purposes and in what ways that power will be used (toward what ends). Business has a stake in the outcome of discussions of whether free enterprise, central state control, or mixed state-and-private enterprise shall prevail. Apart from expressing a preference for free enterprise, business is sometimes called to play a more substantial role in the political reform of a nation.

In eastern Europe, for example, business has been a source of capital for newly privatized industries, a source of expertise for creating market systems, and an influential mechanism through which ideas have flowed from the capitalist world to former communist countries. Asea Brown Boveri (ABB), a jointly owned Swiss and Swedish engineering firm, has been involved in construction projects to improve eastern European nation’s physical infrastructure. Siemens, Germany’s electronics, computer, and equipment giant, has been a partner with the government and banking leader, Deutschebank, in steps to integrate economically disadvantaged East Germany with prosperous West Germany.

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Date: 2016-04-22; view: 1041