Using Generalists or Specialists in Political Markets: An Analysis of the Strategy of Lobbying Firms

Abstract

Corporate lobbying firms have long played a primary role in firms' nonmarket strategy, but they have received minimal attention in the management literature. In this paper, we examine the political strategy of corporate lobbying firms. We suggest and find that corporate lobbying firms differ in their scope of lobbying efforts, their lobbying targets, and how they lobby in political markets. Drawing from Porter’s generic strategy framework initially developed for market strategies, we show that the industry-wide – focus decision also applies to nonmarket strategy. Further, we find that the firm size, as measured by both number of lobbyists employed and the amount of lobbying revenue received each year, drives this strategy decision by corporate lobbying firms. Additionally, we find that the firms lobbying strategy, whether or not they are lobbying legislative or administrative targets, influences their overall focus. We also find that focused corporate lobbying firms are more effective at getting bills passed into law. We used a sample of 487 corporate lobbying firms over 21 years to test our hypotheses.