The Duality of Connections: A Political Control Model of Corporate Strategy

One important issue largely ignored by extant research in managerial political involvement is that the political connections can be leveraged and manipulated by both parties that are connected together. Not only the firm, but the state, government, or political officials can simultaneously achieve their own political goals and interests through these political connections. In this study, I propose a political control model of corporate strategy by considering the duality of political connections. This paper argues that political officials can channel their intentions into firms, affecting the orientation of business strategies. Consequently, corporate strategy is not the pure product resulting from strategic initiatives; rather, it can be potentially an outcome of political control and co-optation, reflecting political agenda and serving political interests. Empirical evidence supporting these arguments is obtained from China transitional economy with an entrenched political authority.