Cultural Dimensions of the European Union and Corporate Political Activity

By Spense, David; Johnson, Andrew F. | SAM Advanced Management Journal, Fall 2018 | Go to article overview

Cultural Dimensions of the European Union and Corporate Political Activity


Spense, David, Johnson, Andrew F., SAM Advanced Management Journal


The European Union is one of the largest and most important markets in the world. As a supranational government, the European Union has broad powers over commerce and regulation. This article examines corporate political activity in the context of the European Union. Corporate political activity is a nonmarket strategy employed as a means to influence the political environment for the benefit of the firm. In this article, the Hofstede cultural dimensions are discussed in the context of the European Union, and data sources for additional study ate identified and organized. The article concludes with opportunities for future research.

Introduction

Europe is a land of diverse cultures and is steeped in a rich history of conflict and collaboration. For centuries, the continent has been a testing ground for experiments in political, social, and economic innovation, and the European Union (EU) is no exception to this. Born from the merging of the European Coal and Steel Community, the European Economic Community, and the European Atomic Energy Community (European Union, 2017), the EU began as a loose collection of nations that has grown larger and more complex since its inception, potentially setting the stage for Victor Hugo's dream of a true sovereign Europe. While some may hope for a federation to rival the United States, the EU has unique opportunities that differentiate it from its Western siblings and could result in the development of an entirely new form of supranational integration. A main point of differentiation is the sheer diversity of the EU. With 28 states, 24 official languages, dozens of ethnic groups, and centuries worth of various legal, economic, and social structures, the members of the EU are vastly more heterogeneous than the colonies and frontiers of the early United States (European Union, 2017). These factors can inhibit the ability of the EU to establish its authority over nations that maintain certain degrees of autonomy and national identity.

These national identities are bound to cultural histories and shape the way individuals and businesses from each country approach competition, authority, and communication. Where once each government interacted with businesses within the framework of the relevant cultural preferences, corporate leaders now find themselves stepping out of the boundaries of their traditional landscapes and into Brussels, where they compete with a myriad of other foreigners for the limited political resources available. This multicultural setting for corporate political activity is rivaled only by the United Nations, but is relatively unprecedented in modern business-political interactions.

The influence of politics on firms is a well-recognized concept, and the study of firms' influence on legal and political processes has grown since the mid-20th century. Research has suggested that firms may gain increases in performance through outcomes, such as direct appropriations (e.g., defense spending) and creation of a more favorable business environment through government policy (Lux, Crook, & Leap, 2012; Shaffer, Quasney, & Grimm, 2000). The focus of existing research, however, is largely built on firm political strategies in the United States with only some discussion of the context of cultural differences and their impact on perceptions and behaviors of both sides of corporate political activity (CPA). Specifically, Barron (2009) noted the differences between the behaviors of British, American, and French lobbyists. With the growth of interest in this high-context view of CPA, it is possible to conduct a more in-depth analysis of how cross-cultural political activity is conducted in an international setting.

How these cultural proclivities influence the modes of corporate political activity in the EU is a relatively unexplored concept (Boddewyn & Brewer, 1994) that could provide a framework for forecasting the development of this and other culturally diverse economic blocs, such as MERCOSUR and ASEAN. …

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