Exploring the effectiveness of corporate political activity in an emerging market: an embedded case study

Abstract

This study examines how healthcare firms in South Africa engaged in corporate political activity (CPA) to shape the National Health Insurance (NHI) policy amid significant regulatory, political, and institutional uncertainty. By drawing on Resource Dependence Theory (RDT) and supported by research participants’ perspectives, the study explores how firms interpret policy risk, manage dependence on the state, and deploys CPA within a politically sensitive and capacity constrained health system. This research adopted a qualitative design, using base the semi-structured interviews with senior private-sector leaders, policymakers, and bureaucrats. The analysis generated six thematic areas namely, regulatory uncertainty; CPA approaches; strategic objectives for engaging in CPA; policy influence and effectiveness; perceptions of legitimacy and appropriateness; as well as contextual and environmental factors. The findings show that regulatory uncertainty, driven by policy ambiguity, inadequate consultation, fiscal fragility, and concerns about state capacity, was a central motivator for corporate to engage in the political environment marketplace. However, contrary to classical RDT expectations, heightened dependence did not result in assertive CPA. Instead, legitimacy concerns, reputational risks, and South Africa’s dominant-party political structure narrowed the range of acceptable tactics. Healthcare firms therefore favoured coalition-based lobbying, informational strategies, and targeted engagements, while litigation was more selectively pursued, by medical insurance firms and hospital groups, than pharmaceutical firms. Influence remained modest and largely confined to technical arenas such as procurement design, health technology assessment (HTA) processes, governance norms and implementation sequencing, while NHI’s core redistributive architecture remained resistant to business influence due to ideological commitments and global universal health coverage (UHC) norms. The study contributes to RDT and international business (IB) literature by demonstrating that CPA in socially salient policy domains is contextual, relational, and legitimacy-mediated. The research also identifies new mechanisms, historical regulatory memory, system-level fragility and global normative pressures, that shape how firms perceive and manage dependence. Overall, the study provides a nuanced account of the possibilities and limits of CPA under conditions of concentrated political authority and contested societal legitimacy.