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.