00:00:01
we're here today with Wharton professor mary hunter mcdonald to talk about her
00:00:05
latest research which focuses on how social activists can affect impact the relationships between companies and
00:00:10
politicians Mary thanks for being with us today thanks Finch now please give us to start off can you give us sort of a
00:00:16
brief summary of your research oh sure so the paper is about a timely topic today with the election around the
00:00:23
corner about corporations involvement in the political process and their influence over politicians they're spent
00:00:30
of course increasing attention to this question in business schools in the field of non-market strategy but most of
00:00:37
the research to date on these issues has tended to focus on supply-side questions
00:00:43
so what what kinds of businesses tend to use tactics to try to access an influence political constituencies in
00:00:50
this paper we try to flip the the deck a little bit and look at the demand side factors that play a role in this process
00:00:57
specifically when are politicians more or less willing to engage with particular corporations and how does a
00:01:04
company's reputation affect their ability to access political constituencies and so our precise
00:01:10
research question in the paper is whether large-scale social activist protests affect or disrupt corporations
00:01:18
ability to access and influence political stakeholders now tell us a little bit about so what were some of
00:01:25
your key takeaways from this research so in the paper we are exploring different
00:01:30
proxies for corporate influence and access to politicians and so we look at three separate proxies we look at the
00:01:40
number of a the amount of a company's campaign contributions that are refunded
00:01:45
by politicians I know this is a surprising proxy to many people because many people think politicians will just
00:01:50
take any money that that you'll give to them but what we find is that many politicians actually will reject and
00:01:56
refund problematic contributions from corporate PACs the second proxy we look at is corporate
00:02:05
appearances and congressional hearings so oftentimes Congress will actually bring companies into a congressional
00:02:10
hearing to share information about a given regulation and companies really seek out lists
00:02:15
of influence because it allows them a real-time way to try to engage with politicians on key regulatory problems
00:02:21
and the third proxy that we look at it are assigned procurement contracts when the government actually hires companies
00:02:29
to provide goods or services so we look in the paper at how a boycott affects these three different proxies for access
00:02:37
and influence and we find that it disrupts all three so we have a database of all boycotts and we find that being
00:02:43
boycotts boycotted is associated with increased refunded campaign contributions decreased congressional
00:02:51
appearances and decreased contracts assigned by the government now were there any conclusions of this paper that
00:02:58
came as a surprise to you I mean when you started out that you didn't expect
00:03:01
to find when you started really digging into the data I think what perhaps surprised me the most was well I was
00:03:08
honestly surprised that we had the finding were related to corporate campaign contributions just idea of
00:03:13
refunding campaign contributions as seemed a bit bizarre to me going into this project but but the finding was
00:03:20
real is there and boycotts lead to to almost a doubling of the amount of campaign contributions that are refunded
00:03:26
I also thought that the amount of real money that companies can lose as a fact of this disruption was fairly staggering
00:03:35
so just looking at the contract example for example let me see after look at my notes but so when a company is boycotted
00:03:46
it leads to a reduction of contracts that's equivalent to a roughly a hundred
00:03:50
and sixty-seven million dollar loss in one quarter that's pretty significant I
00:03:55
mean that could be a pretty big part of somebody's budget absolutely now specifically so if I am I'm a company or
00:04:03
even if I'm a politician or even if I'm social activist if I'm looking at this
00:04:07
research I mean how could I apply this how do you how would you apply this research in in real life
00:04:12
uh-huh well I think it's the way that it is applicable of course differs depending on if you're a company or
00:04:17
social activists for companies I think in a non-market strategy we tend to talk both about how companies can access
00:04:26
political constituencies and about how they can me and contentious social activist and these
00:04:32
are both seen as important parts of the company's control of their non market
00:04:37
environment I don't think anyone has ever suggested that these two domains are connected in this way and then
00:04:43
actually engaging with your social activist stakeholders may be important as a part of trying to manage your
00:04:49
ability to access and influence your political constituencies and to control the threat of regulation and I think
00:04:57
this one so there is there any particular I know a lot of these end up in the news so is there any particular
00:05:01
though boycott in the news or thing in the news that you think really directly relates to this research Oh so the
00:05:09
research had a sample of all boycotts and so you know some of them are things you would recognize like the boycotts
00:05:17
against Nike for their use of child labor and their supply chain for example and some of them are boycotts you've
00:05:22
probably never heard of like the NRA boycotted a company for starting to to to for disallowing its employees from
00:05:32
bringing guns onto their parking lot for example so they're kind of all different
00:05:37
kinds of issues and if you start looking out for boycotts in the media and outlets like the New York Times or The
00:05:43
Wall Street Journal you'll see them almost every day now see what you're
00:05:47
saying though is that it doesn't necessarily matter how widespread the boycott is or I mean it doesn't matter
00:05:52
like how widespread the Brooke boycott is or how much press attention that it gets I mean does that exacerbate the it
00:05:59
impacts if it's something that intends you know that really spreads with people
00:06:02
or just gets a lot of attention it does so we actually find two key moderators of the effects in our paper one of these
00:06:09
is the amount of media attention that a boycott gets now to be in our sample of like I already had to receive attention
00:06:15
and one of the six major media outlets in the United States so these are already fairly large-scale boycotts but
00:06:21
some boycotts get quite a bit more attention than others and we find those that are drawing media attention are
00:06:27
much more disruptive because the media attention is the lifeblood of activism the other key moderator we find is the
00:06:36
salience of the issue that the what cutters are bringing so issues vary in terms of the extent to which the public
00:06:43
thinks that the issue is something that ought to be top of mind to politicians at the moment and so you know even in a
00:06:50
world where we tend to think of things like environmental issues as being very important during the recession for
00:06:55
example even if you were an environmental activist it was hard to get politicians to attend to your issue
00:07:00
because people were at the moment more interested in employment and so at different periods of time in a year
00:07:08
different issues are salient and for activists it's important to have the right issue at the right time right and
00:07:14
so I guess for a company it's almost like having that perfect store happen to
00:07:18
them so are there other misperceptions that you feel like this research kind of dispels um I think so I think that we
00:07:29
tend to have a perception that politicians will just take any corporate money that they're sort of indefatigably
00:07:35
open-palm to when it comes to corporate access and so our paper is suggesting that politicians have standards which I
00:07:43
think a lot of people don't tend to get politicians credit for these days what
00:07:48
one interesting side note about the paper is that we find that these standards are held primarily among
00:07:54
Democrats so the disruption we observe in campaign contributions for example is primarily coming from liberals we see
00:08:01
less disruption among Republican except ease of contributions do you have any I mean did the paper show any particular
00:08:09
reason for that or I think the reason is that we primarily think that disruption
00:08:14
occurs because politicians worry about their reputation being tarnished if they're associated with a problematic
00:08:21
firm and because among conservatives there's already a general acceptance that conservatives are aligned with the
00:08:30
corporate sector that those associations aren't as scary and problematic to those
00:08:34
politicians as they are to progressives and so how do you plan to follow up this
00:08:39
research what's next for you so my co-author and I now are working on a second paper to follow up on this paper
00:08:46
where we're where we are exploring what exactly companies do to counter this
00:08:51
disruption because we don't think they sort of sit idly by right and wait for
00:08:55
it to pass so what we find in this paper is that the types of political tactics that are
00:09:00
disrupted are tactics that are overt and public that are easily traceable and these are the type of tactics that would
00:09:07
carry reputational risk for politicians because you could point to an instance where the politician had been associated
00:09:12
with a problematic company so what we're arguing in this follow-up paper is that
00:09:18
because only that type of tactic is disrupted by social activist protest companies that are protested will turn
00:09:25
to more covert tactics and more indirect tactics so they're more likely to do
00:09:31
things that are subject to less disclosure like lobbying they're more likely to work indirectly through their
00:09:37
managers rather than at the company level so after a protest you might see companies PAC contributions fall but you
00:09:44
should see managers package managers direct contributions to politicians increase and and we're looking at
00:09:51
whether firms start to use more cooperative measures of political influence like trying to bring political
00:09:56
operatives onto their corporate boards for example so it's interesting because
00:10:00
I think you know probably from the activist standpoint they would prefer things be done more in the public eye
00:10:05
and what's happening is their efforts are actually creating the opposite effect like they're it's creating less
00:10:11
transparency as far as what companies are doing absolutely so I my primary research interest is how firms and
00:10:17
social activists interact and activism really thrives in high disclosure environments where activists are able to
00:10:24
easily monitor corporate behavior so isn't an interesting in to some extent I
00:10:28
think frustrating a side effect of activism that they are pushing companies into darker channels of political
00:10:35
influence thank you so much for being with us today oh thank you so it's fun
00:10:56
you