Oliver & Holzinger (2008)
True or False
The dynamic capabilities framework applied to political strategy implies that firms can remain passive as long as regulations do not directly affect them
False
Oliver & Holzinger argue that proactivity is essential: even if current regulations don’t apply, anticipating future rules allows firms to secure long-term advantages.
True or False
Firms can adopt either a transactional or relational approach in their political strategies.
True
The model distinguishes short-term transactional actions from long-term relational investments in political capital.
True or False
Michelin developed green tires with lower rolling resistance.
True
True or False
A defensive strategy always aims at creating new value for the firm in the political environment
False
Defensive strategies are primarily about protecting existing value (e.g., maintaining subsidies or preventing new costs) rather than creating new opportunities.
True or False
Resource-poor firms are more likely to engage in collective action than resource-rich firms.
True
Firms lacking financial and organizational resources often rely on trade associations or coalitions to pool influence.
True or False
Michelin’s green tires were both a technological and political project
True
The innovation gained competitive impact only once linked to lobbying for EU-wide labeling.
What distinguishes a proactive political strategy from an anticipatory one in Oliver & Holzinger’s typology?
A) Both are identical: they involve predicting future political risks.
B) Proactive means influencing rules to create value; anticipatory means preparing for predictable changes.
C) Anticipatory means reacting after the law is passed; proactive means complying with it.
D) Proactive means protecting existing value; anticipatory means defending against competitors.
B) Proactive means influencing rules to create value; anticipatory means preparing for predictable changes.
Proactive strategies shape the institutional environment to open opportunities, while anticipatory strategies adapt early to changes expected in the future.
Which of the following is not one of the three political strategy types?
A) Informational
B) Financial incentives
C) Coalition building
D) Litigation
D) Litigation
While firms may litigate, Hillman & Hitt classify strategies as informational, financial, or coalition-based.
Why did Michelin push for EU-wide tire labeling?
A) To comply with existing environmental law.
B) To make its green tires visible, legitimize differentiation, and raise rivals’ compliance costs.
C) To reduce its internal R&D investments.
D) To harmonize national subsidies across Europe.
B) To make its green tires visible, legitimize differentiation, and raise rivals’ compliance costs
Lobbying for labeling transformed innovation into an enforceable market advantage.
Which of the following best illustrates the role of dynamic capabilities in political management?
A) A firm focusing its political activity mainly on urgent regulatory issues to avoid unexpected costs.
B) A firm developing organizational processes that allow it to adjust and redeploy its political resources as institutions evolve.
C) A firm reallocating part of its budget (e.g., from R&D) to strengthen lobbying efforts when competition increases.
D) A firm relying on industry associations to coordinate and amplify its voice in the policy process.
B) A firm developing organizational processes that allow it to adjust and redeploy its political resources as institutions evolve.
Why might a firm prefer a transactional over a relational approach?
A) It operates in a highly stable, predictable environment
B) It has unrelated product diversification and engages selectively
C) It is resource-poor and depends on others
D) It has strong historical ties with policymakers
B) It has unrelated product diversification and engages selectively
Diversified firms tend to address issues opportunistically rather than investing in long-term ties, as political exposure is scattered.
How does Michelin’s lobbying illustrate Hillman & Hitt’s model?
A)It used a relational, collective, informational strategy. B) It used a transactional, individual, financial strategy.
C) It used a reactive, defensive strategy.
D) It avoided institutional channels and went to courts.
A)It used a relational, collective, informational strategy
Michelin worked through collective industry groups, built ties with EU institutions, and provided expertise—classic relational/collective/informational.
Why does applying the dynamic capabilities lens matter for corporate political strategy research?
A) It stresses that political engagement may be relevant, but usually only when firms face direct regulatory threats.
B) It shows that political activity should be understood as part of broader strategic behavior rather than as isolated lobbying efforts.
C) It links corporate political activity to theories of strategic management by focusing on how firms adapt to institutional change.
D) It underlines that the effectiveness of political action often depends on a firm’s size and resource endowment.
C) It links corporate political activity to theories of strategic management by focusing on how firms adapt to institutional change.
Dynamic capabilities lens formally integrates political strategy into strategic management theory, focusing on adaptation and reconfiguration in changing institutional contexts.
How do institutional differences (corporatist vs pluralist systems) influence political strategy ?
A) Corporatist systems foster individual transactional lobbying, while pluralist systems encourage collective action.
B) Corporatist systems foster collective/relational strategies, while pluralist systems encourage individual/transactional approaches.
C) Institutional context only changes lobbying costs but not strategy type.
D) Institutional context is irrelevant to firm political action.
B) Corporatist systems foster collective/relational strategies, while pluralist systems encourage individual/transactional approaches.
In corporatist systems, collective and relational strategies are effective, while pluralist systems favor fragmented, individual lobbying.
In light of Michelin’s case, which interpretation most accurately reflects the role of political strategy in shaping competitive advantage?
A) Political involvement had little impact; Michelin’s competitiveness came primarily from its technological lead.
B) Political strategy mattered, but only as a defensive tool to reduce risks linked to future regulation.
C) Political action was central, but mainly because it substituted for other strategic weaknesses in the firm.
D) Political engagement complemented innovation by helping to embed Michelin’s green tires into EU regulatory frameworks.
D) Political engagement complemented innovation by helping to embed Michelin’s green tires into EU regulatory frameworks.
Michelin’s case shows that competitiveness resulted from the interaction of technological and political strategies, where lobbying ensured that innovation translated into durable market advantage.