The International Government-Relations Function
International companies have not yet given the government-relations (GR) function a high priority among management's responsibilities. Among the few that have, there are quite varied methods of handling the function; and no generalized pattern of behavior or performance can be discerned in this area, although some common elements are visible.1
Government relations are fundamentally concerned with changing public policy (or preventing changes in it) and/or with gaining favorable (or avoiding unfavorable) treatment under existing policy--with cases of influencing policy at the application state being by far the most frequent.
Yet the government-relations function fits into the broader "external affairs" of the firm, relating it to its entire nonmarket environment of "noncommercial publics." (Other names are also used: public relations, public and government relations, public affairs, corporate affairs, etc. "External affairs" is itself inadequate to the extent that it seems to leave out the internal public constituted by an organization's personnel.) This group includes not only (1) government, in its multiple roles of legitimizer, regulator, and promoter, but also (2) the trade-union movement, as a countervailing power group in society (witness the AFL-CIO support of the Hartke-Burke bill); (3) the rest of a firm's industry, as well as business in general in their collective roles of pressure group and regulator (when permitted to do so, as in more "corporatist" countries); (4) the intellectual, moral, and scientific communities as legitimizers and/or critics; and (5) public opinion at large--including actual and potential employees, stockholders, suppliers, creditors, and neighbors who must be convinced to offer and maintain their services and other forms of support to the company. Success in all of these areas bears heavily on the acceptability of the company's actions--i.e., its legitimacy--as seen by consumers, workers, managers, stockholders, the local community, and the government. At the least, the opposition of such groups must be minimized or negated but obtaining their support--moral, regulatory, financial, and other--is even more important.
One type of international company is essentially geared to the production and marketing needs of home country and parent company, as in the older classical