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09 Jan

Lobbying in business

Lobbying is the original means of incorporating marketing in politics and has long been a serious bone of contention in people’s perspective. But how does it really work? Does it work beneficially? Or is it characterized merely by scandals, corruption, fraud, and bribery?

Apart from a good way for people or groups to ask their representatives to vote for issues they care about, lobbying also represents business implemented by professionals, who register with the government and gain money by third parties to lobby on their behalf. Even if this sounds inauspicious, in the US there are examples of professional lobbying that made beneficial actions, as AIDS prevention and poverty relief.

Corporate Lobbying is a huge business and an industry under development. Focusing on companies, from a shareholder point of view, corporate political lobbying is an action with strategic importance that, under specific laws and regulations, can fluctuate market opportunities in favor of firms and industries, helping them boost firm value by increasing cash flows or decreasing firm operational risk. Corporate benefits from lobbying activities may contain decline in managerial conformity expenses, growth in a protective trade or industrial entry obstruction and approving investing and taxation policies, among others.

Another side of lobbying is the “for profit lobbying”. Between 2008 and 2010 a study of 30 different corporations found that they spend $476 million on lobbying and in return received almost $11 billion in tax rebates (in the USA). Some would claim that this is a striking example of big businesses using lobbying to cheat the system (lobbying abuse). The dark side of lobbying has been a colossal issue for the US, with scandals that affected the environment, like BP oil spill. In 2013 Gallup poll showed that only 5% of Americans view lobbyists as honest and ethical, which means there is no trust and confidence.

To sum up, lobbying has not only one face. It is a political term that gives interesting social insights while getting in touch with marketing rules and financial markets’ operation. The real trouble lies when it works behind “closed doors” and without the public inquiry.

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