Mastery of political influence can coexist with market failure and customer defection

Evidence

The biggest German telecommunications company, Deutsche Telekom, shows that a firm can be very well organized and successful in its non-market strategies by ever-increasing engagement in CPA and influencing political decisions on telecommunication regulation in Berlin and Brussels. At the same time, however, their market strategy is not successful in raising their level of customer satisfaction. In addition, during the last few years, hundreds of thousands of customers have not renewed their contracts and moved to competitors. Why is that the case and, more interestingly, does their non-market strategy focus prevent them from achieving better market performance? — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 355

Categorization

• CANDY: A tidy reversal: the company that lobbies Brussels best is losing hundreds of thousands of customers. Lands in any elevator conversation.
• SHARE: Worth sending to anyone who works in telecoms or regulatory affairs and would recognize Deutsche Telekom’s regulatory wins against its churn numbers.