Boon or Bane? The Contingent Effects of Political Strategies on Firm Performance
Mr. Zheng YAN
PhD Candidate in Strategic Management
NUS Business School
National University of Singapore
This paper examines the positive and negative performance effects of firms' political strategies, contingent upon the structural relations among political actors within the government. Drawing upon corporate political strategy literature and the competitive dynamics perspective, this paper shows that, while firms benefit from their connections with the focal political actor that possesses the main authority over the business activity pursued by them, firms suffer from their connections with rival political actors who compete with the focal political actor. Moreover, the magnitude of the negative effect varies with the competitive tension between these political actors. To neutralize the negative effect, firms can strategically turn to a constraining political actor outside the rival dyad that possesses the ability to limit the focal political actor's behavior.