Firms that deepen political-activity focus sacrifice customer satisfaction.

Evidence

Support for Hypothesis 2 can be found when looking at the correlation between the level of CPA and customer satisfaction for the time period 1999 to 2007. In order to calculate this correlation, we first formed an additive index with the above mentioned ex-post CPA items. Each item was coded with –1 (indicating an increase since 1999), 0 (no change), and +1 (a decrease since 1999). In total, we were able to correlate the CPA and customer satisfaction data for 21 companies. The result of the Spearman correlation coefficient was –0.418 with a 10 per cent level of significance (0.059; two-tailed test). As proposed by Hypothesis 2 we interpret this result as follows: A rising level of CPA between 1999 and 2007 is accompanied by a falling level of customer satisfaction within that period. Hence, a CPA strategy (non-market strategy) focus reduces the firm’s focus on customer satisfaction (market strategy). — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 397

Categorization

• SHARE: Send to anyone researching corporate political activity or non-market strategy — a clean negative correlation between political investment and customer satisfaction is a niche, quotable finding.
• SEED: Angle: ‘The Political Turn Costs You Your Customers’ — what it means when a firm’s non-market strategy crowds out its market strategy.