The Performance Implications of Corporate Political Ties: Government-Business Relations in Turkey

The Performance Implications of Corporate Political Ties: Government-Business Relations in Turkey

Nazlı Berberoğlu Yılmaz (Ankara Yıldırım Beyazıt University, Turkey)
DOI: 10.4018/978-1-5225-6301-3.ch016

Abstract

The main purpose of this chapter is to examine the performance implications of corporate political ties (CPT) that the business organizations establish with the government in the long run. Since the relevant literature mostly focuses on the outcome of these relations, they miss the process which creates the outcomes. Hence, there is no consensus over the performance implications of corporate political ties in the relevant literature. In the chapter, the author examines the CPT-performance relation by taking the process into the center of the study which is conducted in a state-dependent national business system. More specifically, the author examines how the Turkish organizations adapt their political ties in the face of changing political environment and what are the performance implications of this adaptation.
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Introduction

In the modern capitalist system, it is assumed that the main determinant of organizational success and failure is the market rules. Hence, the economy is evaluated independent from social, cultural and historical backgrounds of the related country by the neoclassical theories. However, the social embeddedness perspective points that the economy and economic relations cannot be disembodied from the context on the contrary of the main stream economic theory (Gemici, 2008; Granovetter, 1985). According to this perspective, economic activities are socially embedded and regularized, that take an idiosyncratic nature from the time and place in which they occur (Jessop & Ngai-Ling, 2006). In that case, since the economy cannot be interpreted independently from the social environment and institutions, we must not ignore the role of the state in the economy, where many of the sources of production are managed by it (Buğra, 1994; Polanyi, n.d.). Regarding the resources, it holds, the state is an important agent in the economic sphere. In reality, the free market structure does not function as envisaged in the ideal type. Even in the most advanced modern capitalist systems, the market alone cannot play such a decisive role. The state may finds a legitimate basis for justifying interventions to the economy (Öniş, 1992). Moreover, government authorities at the head of state organs may create an obstacle to the realization of this ideal market situation, especially where the state’s power is centralized in their hands. This, in turn, constitutes an area of intersection where the government and businessmen inevitably meet. The activities that organizations initiate to maximize their self-interest or to gain a competitive advantage in this intersection area, have drawn considerable interest of organizational researchers in recent years.

Key Terms in this Chapter

Corporate Political Ties: Formal and informal connections between businessmen and political parties and actors.

Corporate Political Activity: Organizational attempts in order to create a favorable political environment that provides competitive advantage.

State Dependent Business System: A business system where the entrepreneurs and business groups are selected and reinforced by the state. Hence, state become the dominant actor in the organizational field.

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