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Commercial Diplomacy, the Private Sector and The Public Policy Process—An
 Interactive Relationship

by Geza Feketekuty
Andrew Procassini

January 2002


© ITCD, 2004. All rights reserved. Reproduction of this document, in whole or in part, is strictly prohibited without written authorization of the authors. No part of this document may be reproduced, stored, or transmitted in any form (electronic, mechanical, photocopy, etc.) without written consent of the authors.

Commercial Diplomacy, the Private Sector and the

Public Policy Process—An Interactive Relationship


Table of Contents






Chapter 1            Business, Government, and Interest Groups 


Chapter 2            Government 

  • Understanding Government

  • Role of Government

  • Organization of Government

  • Sources of Political Authority

  • Understanding Government and Government Officials

  • The Link between Organizational Responsibilities and Policy Perspectives

  • Need to Understand Policy Rationales

  • Policy Instruments

  • Trade Policy

  • Government in the United States

  • Dispersion and Balance of Powers—Key Principles of American Government

  • The Relative Independence of State Governments—A Challenge for Commercial Diplomacy

  • The President—Key Decision Maker in the Executive Branch

  • The Committee System –Congressional Influence in Substantive Policy Issues

  • The President and Congress—Shared Decision-Making Power in Trade Policy

  • Responsibilities of Different Levels of Government in the United States

  • Roles of the National Branches—Executive, Legislative, Judiciary, and Independent Commissions

    • Summary Points for CD Professionals
    • Notes


Chapter 3            Business 

  • Introduction

  • Business Functions

  • Business and Industries

  • Organization of Business Along Geographic and Product Lines

  • International Dimensions of Business

  • Corporate Governance

  • The Role of Management

  • Objectives, Performance, and Rewards

  • The Responsibilities of Business

  • Summary Points for CD Professionals

  • Notes


Chapter 4            Interest Groups 

  • Nature of Interest Groups

  • Business Interest Groups

  • Other Economic Interest Groups

  • Social Interest Groups

  • Functions of an Association

  • Role of Association Leaders

  • Structure of an Association

  • Objective, Performance, and Rewards

  • Interest Groups in the United States

  • Interest Groups and the Management of International Economic Organizations

  • Summary Points for CD Professionals

  • Notes


Chapter 5            Stakeholders 

  • The Stakeholder Concept

  • The Business Stakeholder Model

  • Management of Stakeholders

  • An Alternative Stakeholder Model for Commercial Diplomats

  • Treating Stakeholder Interests

  • Objectives, Performance, and Rewards

  • Summary Points for CD Professionals

  • Notes



Chapter 6            Introduction to Political Strategies  

  • Overall Subject

  • Grassroots Campaign

  • Testimony

  • Political Entrepreneurship

  • Electoral Strategies

  • Judicial Strategies

  • Advisory Panels and Committees

  • Summary Points for CD Professionals

  • Notes

Chapter 7            Lobbying  

  • Nature of Lobbying

  • Reasons for Lobbying

  • Applications

  • Who Lobbies

  • Personal Traits of Successful Lobbyists

  • Lobbying Guidelines

  • Access and Timing

  • Allies

  • Controls on Lobbying in the United States

  • Summary Points for CD Professionals

  • Notes

Chapter 8           Coalition Building and Collective Action  

  • Need for Coalitions

  • “Ad Hoc” Coalitions

  • Summary Points for CD Professionals

  • Notes

Chapter 9            Mechanisms for Building Coalitions  

  • Policy Systems

  • Iron Triangles

  • Policy Networks

  • Leadership

  • Summary Points for CD Professionals

  • Notes

Chapter 10            Molding Public Opinion 

  • Public Affairs Organizations

  • Public Affairs Tools

  • Experts

  • Summary Points for CD Professionals

  • Notes

Chapter 11            Choosing Political Strategies  

  • Why Choices?

  • Effectiveness and Efficiency

  • Benefits and Costs

  • The Wilson Matrix

  • Summary Points for CD Professionals

  • Notes



Chapter 12            Issues and Stakeholders  

  • The Issue Life Cycle

  • Dealing with Crisis

  • Issues and Stakeholders

  • Summary Points for CD Professionals

  • Notes

Chapter 13                        The Executive Branch—A Stakeholder Management Role  

  • The Executive Branch and the Trade Minister

  • Trade Officials and Business

  • Trade Officials and Domestic Policy Interests

  • Trade Officials and the Issue Life Cycle

  • Trade Officials and Foreign Stakeholders

  • Trade Officials and Domestic Stakeholders

  • The Private Sector Liaison Functions

  • Summary Points for CD Professionals

Chapter 14                        The Legislative Branch—A Complex Stakeholder 

  • Introduction

  • Politics and the Legislative Branch

  • Legislators and Actions by the Executive Branch

  • Legislators Making Laws  

  • Trade Staff  

  • Summary Points for CD Professionals

  • Notes  

Chapter 15                        The Business Firm—The Enterprise Perspective with Advice  

  • Introduction  

  • Relationship of Government Relations to Business Units  

  • Government Relations and Lobbying  

  • Government Relations and Lobbying the Regulatory Agencies  

  • Levels of Competency  

  • Performance  

  • Advice for the Government Relations Manager  

  • Summary Points for CD Professionals  


Chapter 16                        The Business Community—The Industry Perspective

  • Introduction  

  • Role of the Association Organizations  

  • Association Staff  

  • Coalitions  

  • Understanding Associations and Coalitions  

  • Advice for Association Executives  

  • Summary Points for CD Professionals  


Chapter 17                        Public Interest Groups as Stakeholders

  • Non-Market Issues

  • Advice for Issue Managers in Non-Governmental Organizations

  • Summary Points for CD Professionals  



Chapter 18                        Globalization

  • Globalization

  • The Globalization Debate

  • Summary Points for CD Professionals

Chapter 19                        Managing International Business-Government Relations 

  • Introduction

  • International Organizations

  • Regional Trading Organizations

  • Geopolitical Organizations

  • International Government Relations

  • Managing the Government Relations Activities of Foreign Subsidiaries

  • International Issue Coalitions and Associations

  • Summary Points for CD Professionals

Chapter 20                        Ethics and Commercial Diplomacy 

  • Introduction

  • Ethical Principles

  • A Simplified Approach

  • Ethics in the International Arena

  • Summary Points for CD Professionals


Selected Bibliography  


                        I       Structure of the Executive Branch

                        II     Country Analysis

                        III    Selected URLs



Figure 1.1                        Conceptual Elements in the American Business, Dedicated Interest, and Government Sectors 

Figure 1.2                        Field of Commercial Diplomacy 

Figure 2.1                        Examples of Government Responsibility by National, State, and Local Governments 

Figure 2.2                        Congressional Committees Relevant to Business (100th Congress)

Figure 2.3                        Independent Establishments and Government Corporations in the U.S. Federal Government Relevant to Business 

Figure 3.1                        Government Relations to Business Functions 

Figure 3.2                        Relationship of Business Functions to Policy Issues in Commercial Diplomacy 

Figure 3.3                        Common Modes of Entry to Foreign Markets 

Figure 3.4                        International Business Strategies by Cost and Local Responsiveness 

Figure 3.5                        The Key Role of Management 

Figure 4.1                        Business Interest Associations by Type 

Figure 4.2                        Selected Traditional Functions Ranked from Highest to Lowest in Occurrence 

Figure 4.3                        Examples of Key Government-Related Activities of Associations 

Figure 4.4                        Organizational Focus of Interest Groups in the United States 

Figure 5.1                        Generic Stakeholders 

Figure 5.2                        Types of Stakeholders and Management Strategy 

Figure 6.1                        Essential Principles for Grassroots Campaigns 

Figure 7.1                        High-Profile Lobbyists in Washington, D.C. 

Figure 7.2                        Abilities of a Successful Lobbyist 

Figure 10.1                        Corporate Public Affairs Activities 

Figure 10.2                        Public Affairs Tools 

Figure 11.1                        Differences in Political Actions Across Different Policy Types 

Figure 12.1                        Stages of the Issue Lifecycle 

Figure 12.2                        Principles of Crisis Management 

Figure 12.3                        Evaluating Stakeholder Position and Activities at Each Issue Life Cycle Stage 

Figure 18.1                        Potential Benefits of Globalization/Potential Problems of Globalization 

Figure 19.1                        International Organizations 

Figure 20.1                        Is the Behavior or Its Consequence 


Many books and articles have been written about the relationship of the private sector to the public policy process, but relatively few have been written that attempted to include a new field, that of commercial diplomacy (CD). A short definition of CD, in order to complete the thoughts in this preface, is an application of the tools of diplomacy to the removal of barriers to trade and investment, and to the resolution of policy conflicts arising from the globalization of the world economy. A description of the combined activities of the private sector, the public policy process, and commercial diplomacy is the subject of this book. This manual is shorter than a typical textbook that provides a broad, complete, and definitive review of a complex subject. A manual is meant to provide the basic foundation or principles of a subject without great detail, but with sufficient references to the sources for a more complete and comprehensive study. In keeping with the intent of a manual-type presentation, it is important to provide the reader with an initial understanding of its composition and how it is structured and applied. To do so, the following paragraphs address important points about these aspects. 

First and foremost, this manual is intended to be used by the reader to teach him or her the foundations of the subject. The notes following each chapter will direct the reader to works that provide more extensive discussion. 

The primary audience for this manual is the individual who has a good academic background, but whose experience in commercial diplomacy is limited. This manual provides a basis for professional entry into the field at a working level. It does not contain the extensive training necessary for a high-level government or business post that requires experiential as well as academic knowledge. It does include a great deal of practical information as illustrative material, however. 

This is not to say that the manual will be of little value to the experienced professional. It does in fact do so by providing a framework that will fill the academic gap occurring when today’s professional becomes adept through training on the job as opposed to a disciplined systematic approach. This manual provides the experienced professional with a framework with which to expand his/her structural education in the field. 

The authors of this manual are Americans and the manual therefore has an inevitable American perspective. The authors, nevertheless, made every effort to distill insights into the private sector/government relationship that are applicable to stakeholders in other countries participating in the global trading system. Thus, while the manual has an inevitable American perspective, the authors made effort to provide insights that are more universally applicable to nations that are active participants in the global trading system. 

The manual is written in four parts. Part 1 describes the actors and institutions involved in the interactive activities of business, government, and interest groups. It also introduces the stakeholder concept, a concept that has gained a great many adherents since its early introduction in the 1980s. Part 2 describes the means and methods that stakeholders employ to advance their cause by implementing political strategies. These political strategies, of which about ten are addressed in the book, are the means and methods by which the stakeholders influence each other, but primarily government, in order to achieve their objectives. These strategies include lobbying, coalition building, grassroots campaigns, and a number of others. Here, the scene shifts to the activities and the dynamics of the subject. 

Part 3, deals with the treatment of issues and crises by the key actors and institutions of business, government, and interest groups. Here, the focal point is the issue cycle and the response that is drawn from the institutions and individuals. 

In Part 4, the discussion moves to the activities of stakeholders at the international level. This part, therefore, completes the text by integrating the international discussion as one subject. In all, the four parts form a complete whole that progresses from the simplest domestic exposition to a more complex and international one. 

Each chapter will close with a very brief summary of the major points made in the text. In this way, the reader may return to the manual later to read only the summaries to refresh his or her memory regarding the subjects presented. 

Finally, at the end of each chapter, references to suggested readings and a list of websites enable the reader to further expand his or her knowledge of the subject matter. A bibliography is also included at the end of the manual.