To engage or not to engage with host governments: Corporate political activity and host-country political risk

We analyze how a host market’s institutional context can influence an MNE’s senior management’s choice and deployment of corporate political activity (CPA). First, we argue that a non-engaged approach to CPA is likely to be chosen when senior management perceives high host-country political risk, arising not only from host-country political institutions, but also from the distance between home and host-government relations. Second, we propose that the deployment of this approach can require active adaptation through four political strategies: low-visibility, ensuring a minimal degree of general attention from other actors; rapid-compliance, entailing high speed actions to obey the rules; reconfiguration, involving re-arranging the MNE’s structure and processes for competitiveness; and anticipation, implying the prediction of public policy and analysis of interest groups to anticipate responses.