Corporate Political Strategy and Foreign Competition: The Case of the Steel Industry

Abstract

An underplayed topic in the strategic management literature is firms' use of political strategies, such as lobbying the government for trade protection. This study developed and tested a simple model examining the magnitude, scope, and timing of U.S. steel firms' use of political strategies to address U.S. trade policy. The findings showed that the industry's largest firms dominated the politics surrounding trade protection in order to capture expected benefits from trade protection or to postpone high downsizing costs. Firms engaged in certain political strategies not when import competition was the greatest but when domestic demand was weak.