The strategic management of government affairs in China: How multinational corporations in China interact with the Chinese government

This study addresses how MNCs effectively interact with government by examining the strategic management of government affairs in 25 MNCs in China from the perspectives of public relations and corporate political activity. Twenty-seven qualitative interviews were conducted. Results show that 16 of the 25 MNC include their government affairs managers in strategic management. Government affairs contributes to the process by aligning their business goals with the development of policies and regulations. Government affairs managers play four roles in the process according to the level of regulation and the frequency of external environmental changes of the MNCs: the business developer, expert prescriber, senior advisor, and internal consultant. Government affairs specialists use direct and indirect sources to gather information relevant to environmental scanning. Results also suggest a positive relationship between the participation of government affairs in strategic management and excellence in government affairs. However, in addition to excellence in government affairs, organizational mechanisms of management, organizational expectation and culture, and the nature of the MNCs industry also affect the integration of government affairs with the overall strategic management. In short, in order to assist multinational corporations navigating in China's ever-changing environment, government affairs is more professional and strategic than a business of guanxi (personal relationships).