The development of business-government strategies by diversified firms

This paper uses grounded theory to explore internal (intrafirm) conflicts in the formulation of business-government strategies by corporations with diversified business units. We find that three types of conflict exist within firms: conflict over proactive policy positions advocated by the firm (prepolicy issues), conflict over reactive internal distribution of compliance costs/benefits (postpolicy issues), and representational conflict (e.g., individual business units vs. corporate representation in the external public policy arena). We also develop a grounded framework for organizational structures for conflict resolution in the strategic management of government relations, based upon our case studies, and find a relationship between particular structures and the degree of diversification.