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