Non-Market Strategies: Corporate Social Responsibility and Corporate Political Activity

This literature review discusses the importance of non-market strategies like corporate social responsibility and corporate political activity in ensuring a firm's competitive advantage and profitability. It explores the synergy between these two elements and their impact on organizational performance. The review also highlights the role of government in facilitating economic exchange and the need for firms to build trust with the government. Additionally, it discusses the impact of CSR and CPA on policy influence and the importance of integrating these two strategies to build mutual trust between the firm and the polity.

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Literature Review
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The non-market strategies can be taken recourse to by a firm that can ensure its
competitive advantage in the industry. Inter along with intra firm trust within the strategic
alliance can help in the expansion of the firm and ensure its profitability. The synergy
between the two elements- corporate social responsibility (CSR) along with corporate
political activity (CPA) can improve the organizational performance of a firm (Liedong et al.
2015).
The government can help in maintaining the environment that can facilitate the
process of economic exchange of a firm and hence it is important for the firms to build trust
with the government. The non-market environment helps in constituting general context in
which the firms operate (Schwartz 2017). Corporate Political Activity can help the firms in
influencing the government policy in a way that is favourable and it includes different kinds
of tactics like lobbying, political directorship and political action committee. These kinds of
tactic can help in targeting the elected officials along with politicians. Corporate Social
Responsibility is indicative of the social along with environmental obligation of a firm that
can help it to target the general public.
Corporate Social Responsibility can help in protecting the reputation of a corporation
and it can increase the visibility of a company and confer it with legitimacy. The visibility
that one gains from CSR can help it in establishing contact with polity and it can help them in
gaining access to the process of decision-making (Tai and Chuang 2014). The good
reputation that a firm can get with the help of CSR can help in unlocking doors along that of
policy power. CSR can help in creating access to polity but it cannot influence the policy
outcome.
The firms knowing the policy issues will be in a better position that can help them in
presenting accounts that can be accepted by the politicians. The politicians can be appointed

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in the corporate board that can help in managing uncertainty that surrounds the relationship
between the firm and the government. The politicians have the responsibility of ensuring the
protection of the public interest and their appointment to the board can help in signalling to
the public that the firm is fulfilling the ethical obligation. The large firms are adding the
government relations with their operations that can help them in developing competence in
relation to policy issues. The Government affairs department (GAD) can help a firm in
formalizing interaction with the government and it can increase the transparency between
firm and the government (Hadani, Doh and Schneider 2018).
CSR can be said to be benevolent but not CPA. CPA embeds the policy skills but not
CSR. The integration of the two strategies can help in the creation of trust between the firm
and that of the polity. CSR along with CPA can help in building mutual trust that can reduce
the voter resistance to that of corporate political engagement. Both CSR and the CPA can
have access to the polity but they have differential impact pertaining to policy influence. CSR
does not have influence on the policy outcome and the impact of CPA is limited to that of
low salience issue that does not affect the actors within the market.

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References:
Hadani, M., Doh, J.P. and Schneider, M.A., 2018. Corporate political activity and regulatory
capture: how some companies blunt the knife of socially oriented investor activism. Journal
of Management, 44(5), pp.2064-2093.
Liedong, T.A., Ghobadian, A., Rajwani, T. and O’Regan, N., 2015. Toward a view of
complementarity: trust and policy influence effects of corporate social responsibility and
corporate political activity. Group & Organization Management, 40(3), pp.405-427.
Schwartz, M.S., 2017. Corporate social responsibility. Routledge.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.