Exploring the performance of government affairs subsidiaries: A study of organisation design and the social capital of European government affairs managers at Toyota Motor Europe and Hyundai Motor Company in Brussels

This paper aims to extend understandings of the corporate political activity (CPA) of multinational enterprises (MNEs). It explores how the social capital of government affairs managers (GAMs), and in turn the political performance of the government affairs (GA) subsidiaries in which they work, is affected by their MNE's organisational design. Our empirical focus is the GA subsidiaries of Toyota Motor Corporation (TMC) and Hyundai Motor Company (HMC) in Brussels. Our comparative case-study research suggests that GAMs working in relatively decentralised and coordinated GA subsidiaries have higher levels of internal and external social capital, and consequently can be more influential compared to GAMs working for relatively centralised and loosely-coordinated GA subsidiaries. Our findings respond to calls for more research providing managers with practical guidance on how to organise their international GA functions more effectively. They also contribute to CPA scholarship by specifying and explicating individual- and organisational-level antecedents of CPA that remain understudied in the current literature.