How does the international company (IC) attempt to influence the host government and the U.S. government? The term "influence" permits several definitions. However, for our purposes it refers to situations where the IC (as a participant in international business transactions) persuades the host government and the U.S. government to adopt policies and programs that serve to promote or protect interests of the IC.
Influence is exercised in varying degrees of overtness. For example, by offering information on a particular subject or by introducing one person to another, an individual exercises influence; information can be offered publicly or to only one company. Influence is relatively open when the U.S. Embassy approaches the host government to inquire about its policies on foreign direct investment or on treatment of certain tax provisions. In this context, the host government readily recognizes that the embassy is making inquiries on behalf of ICs. A highly explicit act occurs when the IC alerts the host government of its plans to seek the assistance of the U.S. government in making representations to the host government on general matters relating to the IC.
The fundamental characteristic of the influence process is the perception of power of the IC in the eyes of the individuals/organizations it wishes to influence. And often the extent of power possessed in reality by the IC is different from the host government's perception of its power. The ICs rely on this perception as well as on their actual power.1
Influence also occurs through direct and indirect representations. For example, the IC might not deal directly with the host government, but through third parties. Influence is exercised either through specific statements on given issues or through general comments; the latter retains flexibility for subsequent dealings.
In short, influence occurs in a variety of ways, through a host of individuals representing a range of organizations and for an array of issues. Therefore, the effective exercise of influence is based not only on the "what" but also on the "how," "when," and "who."
The IC is accused of gaining collaboration of the U.S. government to influence a foreign government, and in many parts of the world, such collaboration is accepted as a fact. But to what extent is it true? A greater understanding of the areas and extent of influence of the IC on the host and home governments