Political pluralism, public policies, and organizational choices: banking branch expansion
Krishnan Kozhikode, R. & Li, J.
- Corporate political activity: examines how organizations pursue their interests in the
public policy arena.
- To ensure fair representation of their interests in public policy prescriptions,
organizations persuade key agents of governments through efforts such as lobbying
and forming coalitions.
- The choice and success of corporate political activity is a function of the
configuration of the political institutions in a given context.
- When government power is fragmented, actors in each fragment can influence or
exert formal authority over public policy decisions relating to allocation and
distribution of resources, and in certain cases no central authority exists to reconcile
conflicts of interests among actors.
- Political pluralism: an institutional arrangement wherein the political orientations of
national and subnational policy makers differ, in such a way that one political party
may dominate the national government while a political party with an ostensibly
incompatible creed governs certain subnational units.
- Gaining support on one level of government can be insufficient when political
- Two parts of the research:
o Explaining government behavior under political pluralism.
o Explaining organizations’ strategic response.
- Political pluralism normally tends to check and balance the power of various
government factions, thus protecting the interests of citizens and organizations, but
in certain situations in which political competition is weak, political pluralism may
have negative, albeit indirect, consequences for organizations.
The research setting
India – a pluralistic society
- India is a union of 28 states and 7 union territories.
- The central government, which is nominally more powerful than the state
governments, dictates nationwide economic policies and runs centrally planned and
sponsored schemes, but each Indian state has its own government that formulates
- India is a pluralist society in which politics is highly diverse.
- Political pluralism is common and widely accepted, and it has led to substantial
policy variations among states and over time.
Branch expansion of Indian banks
- Banks have mirrored the nation’s economic progress.
- The Reserve Bank of India (RBI) is the nation’s central bank, which has imposed and
repealed a long series of branching regulations.
- Though the central government formulates branching policies for banks, each state
government has a major say in implementing those policies in its state.