Identifying corporate political activity as part of integrated enterprise strategy in selected South African agri-businesses

Abstract

Corporate political activity (CPA) is the phenomenon in which firms employ corporate attempts to influence public policy in pursuit of the sweet spot found between what the Government wants and what the firm wants. CPA is the activities and tactics of a corporate political strategy (CPS), which forms part of the overall non-market strategy. An effective integrated enterprise strategy should encompass both a market strategy, addressing the market environment (internally), as well as a non-market strategy addressing the non-market environment (externally). The PESTEL framework identifies the political environment in which a firm operates as one of the components of the non-market environment and it follows that the Government of the country would be an important stakeholder in terms of business relationships. The South African agricultural landscape is experiencing increasing levels of uncertainty created and/or facilitated by the Government. During 2016, the sector experienced the worst reported drought in a century with lacking support from Government in terms of drought relief. Furthermore, the uncertainty in terms of public policy on pressing matters concerning vital resources, such as land, is encouraging disinvestment in a sector which, taking into account the whole value chain, contributes 12% of the country’s GDP and provides over eight million jobs. The aim of this empirical descriptive study was to identify the CPA that selected South African agri-businesses employ. Six agri-businesses were selected using purposive sampling and data was collected from them by means of semi-structured interviews. The interviews were based on a questionnaire, adapted from a similar South African study that is grounded in the literature of CPA. Conceptual qualitative content analysis was used to interpret the data, and the results showed that the selected agri-businesses experience significant regulatory uncertainty regarding the general direction and implementation of future agricultural regulation/legislation and employ a variety of CPS to differing extents. It is recommended that agri-businesses continue to engage in CPA as a strategic priority, paying attention to their relationship with their representative bodies through clear and open communication and effective involvement. Furthermore, the Government should seek policy consistency and improved access for individual agribusinesses