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The Effect of Corporate Political Activity on Corporate Reputation Amongst Industry Professionals

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Many firms have increased their expenditure on Corporate Political Activity (CPA) in an attempt to influence the public policy process, and to increase the Corporate Reputation (CR) of the firm. We first discuss the literature on the context and proactive political strategies involved in CPA, and the literature on CR. Our empirical study draws on the literature, examining the German food manufacturing industry, using expert interviews with nutritional scientists and NGO representatives analysed using a qualitative, thematic analysis. Our findings and managerial implications centre around the reputational effect on the firm and competitors, and upon the idea of ‘issue islands’. Proactive CPA strategies and constituency-building, whilst seen as risky, had a positive effect on firm CR amongst the experts (but not all stakeholders) if adopted over the long-term. CPA strategies can also provide a first-mover competitive advantage; competitors that subsequently adopt the same strategy do not receive the same CR benefits. ‘Issue islands’ was an analogy used by one expert to describe how the stakeholder-specific perception of one issue does not necessarily affect another; for example, the nutritional scientists focused on product nutrition and not the firm’s advertising when constructing a CR.
StatusUdgivet - 2020
BegivenhedAcademy of Management - Vancouver, Canada
Varighed: 7 aug. 202011 aug. 2020


KonferenceAcademy of Management

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