Nonmarket Strategy Integration: How Corporate Social Responsibility Becomes a Political Strategy

Abstract

Using social exchange theory, this paper explores how CSR is used as a political strategy. The findings reveal that when CSR is politicized, it involves the design and implementation of politically charged CSR initiatives that entail firm-polity negotiated exchanges. Firms exchange social interventions for political influence in ways that allow politicians take the credit to boost their re-election. To do this, the choice of target politician hinges on political vulnerability, the selection of CSR initiatives is based on CSR orientation and CSR benefit personalization, the location of CSR is linked to politicians’ electoral constituencies, and the timing of CSR is affected by election cycles. Overall, this paper provides new insights into how CSR is used in indirect social exchanges in political markets, shows that CSR can be CPA, and thus extends nonmarket strategy integration from its focus on CSR’s complementarity with CPA to its instrumentality in CPA. The findings have important theoretical and practical implications.