These class notes were taken in 2018 in the course called "Introduction to Politics" a Third Year Bachelor in Management course at ESCP Europe. The bundle of documents includes all sessions named after the topic of discussion. Each document includes graphs and explanations carefully conducted in bu...
Politics Reading Notes: Business Power & Democratic Politics
Business Power and Democratic Politics
- The more the public cares about an issue, the less managerial organizations will be
able to exercise disproportionate influence over the rules governing the issue
(business power down, political salience goes up)
- How capitalist systems operate: rules governing corporate control
1. Companies = commodities (free to be bought & sold by owners)
2. Companies = political & distributive compromises of capitalist democracy
- Political parties have little importance in corporate control & matters of regulations
- asymmetry of expertise and the cost of redressing it structure the quiet politics of low
salience issues in other ways
- Managers 🡪 resources for fights in low salience domains, expertise about policy
issues, influence rules (= incorporated into law/self-regulatory codes) of collective
governance
- Politicians 🡪costly to acquire expertise & low incentive about public concern,
concerns about economy = favourably responding to lobbying demands of managerial
organizations, delegate complex governance issues in which managers are
well-represented, don’t want to disrupt economy (dependence on reelection & voters
mobilisation on political issues)
- Journalists 🡪 lack of knowledge in policy area, don´t defer to managerial
organizations (concerns about hurting economy), rely on information from business
leaders to explain topics in a simplified way = businesses to influence the framing of
political debates, less dependent than politicians & less beholden to managerial
expertise (= other sources of information available)
- What the changing value of salience does is convince politicians and the press to invest in
developing their own, alternative sources of information. That makes them less dependent on
managerial organizations, which makes managerial organizations less influential than under
conditions of low political salience.
- the public has come to care about issues of corporate governance is through accounting and
pay scandals -e.g.: the ENRON scandal
- scandals 🡪 bad news for managerial organizations (issue = high salient), undercut
claims of privileged expertise (🡪 businesses depend on for lobbying capacity),
public´s attention to issue 🡪 reorientation of politicians´ interest
- accounting scandals/market crashes 🡪 highlight failures of business foresight &
potential conflicts of interest, politicians rely less on business information 🡪 loss of
advantage of managers: low salience politics
- Issue intrusion: previously inert policy area forces its way onto the political radar of
the public
- Most business organizations maintain formidable lobbying operations, but those operations
are as much dependent on their reputation for expertise as on their direct expenditure of
money. When this expertise is undermined, the influence of managers on public policy is
likely to suffer.
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