Populists in Power—the Impact on Interest Representation and Firm-level Nonmarket Strategies

Abstract

Abstract This thematic chapter explores how collective interest representation structures and firm-level corporate nonmarket strategies are affected by exclusionary populists in power. Through the case study of Hungary, the chapter showcases how businesses adapt to the rise and consolidation of populism by shifting strategies from a conflictual style of bargaining when the populist leader takes office, to a quiet but engaged strategy as the regime consolidates its governing power. While collective interest groups adapt and keep the dialogue with the state open by narrowing their negotiating strategies to lower salience issues within the era of formal quiet politics, individual firms increasingly engage in informal quiet politics. The study explores how firms manage their nonmarket strategies through activities that either help them buffer the impact of the threatening external environment or engage in bridging strategies that support their aims to gain legitimacy in the eyes of the government and help them build partnership with the governing elite. The chapter’s findings suggest that in a populist political context firms must negotiate and maintain a legitimate position in their nonmarket environment in order to survive and prosper, and explores how firms in different sectors adapt to populism differently, depending on their legitimacy. The chapter’s empirical evidence illustrates how firms engage with public policy through a variety of bridging and buffering corporate political strategies in the space of formal and informal quiet politics.