Effective government affairs in an era of marketization: Strategic issues management, business lobbying, and relationship management by multinational corporations in China

Abstract

Little public relations research on government affairs has been conducted. Even less research of this kind has yet been conducted in a non-western context. The purposes of this study were to explore how public relations professionals in multinational corporations (MNCs) in China practice government affairs activities at different levels of Chinese government and to develop a normative theory of strategic government affairs. Government affairs in this dissertation refers to the organizational function that encompasses issues management, policy formation, and relationship management. I applied the perspectives of public relations and political economy to examine the MNCs' management of government affairs. I conducted 27 long interviews with executives or managers responsible for government affairs from the China offices of 25 MNCs. The MNCs cover several industries and three business entry modes. I also conducted a two-phase document review and informal interviews with Chinese journalists and public relations scholars and practitioners. My data suggested that with China's socialist market economy and authoritarian political system, MNCs must interact with the government to strategically manage opportunities and threats in their environments. I found that government affairs performs six functions. Government affairs contributes to organizational effectiveness by participating in the MNCs' strategic management processes through four roles, managing issues, and cultivating the MNCs' relationships with key stakeholders through communication and corporate behaviors. My data showed common political strategies and consistent patterns of political involvement of the MNCs. MNCs selected their political strategies based on factors such as economic conditions and organizational characteristics. Only a few MNCs evaluated their government affairs practices based on goal achievement. Drawing on the results, I developed three models that construct my theory of strategic government affairs. These models apply general public relations theories to the context of government affairs. The model of strategic management of government affairs identifies government affairs' participation in an organization's strategic management and the strategic nature of government affairs programs. The situational theory for government affairs allows professionals to separate active publics from stakeholders. The model of effective government affairs provides a framework for the development of government affairs programs that reflect long-term strategic management.