Lobbying and the Like: Managing the Regulatory Environment

Companies not only stand up for or against specific matters in plain sight of the customer, they also pursue their interests less publicly in the political arena. Lobbying and other forms of political management are common strategies to influence the regulatory environment in favor of one´s company. The results of this research show that political marketing strategies directly and positively influence company performance. Political marketing reduces market based risk. Lobbying or government relations can act as an insurance during economic downturn and companies might be more likely to receive government assistance during economic hardships. Neverthelss, consumers feel negatively about connections they perceive as too close between business and government. Therefore, lobbying companies and governments alike might be well advised to take the reputation problem of political marketing seriously and install rules to avoid the abuse of power of all parties involved.