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Holzinger's Theory Of Corporate Political Behaviour

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1. Introduction Oliver and Holzinger (2008,p.496) define strategic political management, also called corporate political behavior, as an effort to use the capabilities of the national government or other policy-making institutions in order to increase and seize beneficial returns from the political environment. Especially the aspects of value maintenance and value creation play a vital role when interacting with government policies. In the past years, this attempt became a key determinant for a firm’s overall performance and a crucial source of value creation and value maintenance as explained by Oliver and Holzinger (2008, p.500-501). This paper discusses the roles that corporate political strategies play and their influence upon a firm’s …show more content…

First of all, a firm needs to reflect which strategic orientation it wants to follow, by especially focusing on which dynamic capabilities they possess, and whether they want to maintain existing value or further create value. When a firm intends to maintain existing value it can either make use of a defensive strategy by actively exerting influence on policy makers or persuading the government to maintain current policies. An example for this strategic behavior can be explained by lobbyism where a firms aims at extending entry barriers for competitors as given by Oliver and Holzinger (2008, p. 506-510). The second approach for maintaining value, given by Oliver and Holzinger (2008, p.507-508), would be a reactive strategy, which is more appropriate for firms focusing on internal capabilities. Hereby the firm actively adapts and realigns structures in order to comply with changing …show more content…

Given the societal-political context a firm operates in, it has to choose the best fitting set of strategies and tactics taking into account many interconnected variables such as industry, firm size and various competing interest groups. By being able to actively shape government policy, a firm is able to gain control over critical resources and its policies and thereby drawing an important advantage for the success of the firm. This interplay between the firm and the government bears a great potential in favor for a firm but also for the wellbeing of the whole

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