How do firms benefit by maintaining public relations and influencing the government? Explain with examples

Public recognition and approval of a firm's practices can also be a competitive tool. This can be better explained with the help of the following examples. In the year 2005, two hurricanes destroyed much of the New Orleans and Beaumont–Port Arthur areas. While the relief efforts of local and national governments faltered, companies like Wal-Mart, Home Depot, and Lowe's had stockpiled and shipped necessities to the area before the storms hit, and the firms bypassed profits by keeping prices at pre-disaster levels.Forgone revenue raised the value of their names as favorable media coverage gave customers reason to maintain their loyalty after the disasters. Such actions can be both competitive and charitable.

Similarly, energy and auto producers advertise their environmental concerns. Campaigns for Toyota's and Honda's hybrid cars stress their ecological impact rather than their performance. This strategy might better maintain their first-mover advantages (if any) as U.S.-based manufacturers introduce similar vehicles. Altria, the maker of Marlboro cigarettes, risks large losses in cancer-related lawsuits. Its Web site provides links to help people quit smoking and documents its efforts to prevent young people from starting.

Government can also help a business to advantage itself or disadvantage competitors. A business seeking favors from the government is exercising its constitutional rights, which need not entail corruption. Among possible strategies, a firm might seek legislation that makes competition illegal, as cable TV operators have done in many cities. Government can also make competition costly for foreigners by imposing quotas or tariffs in return for support from the domestic industry. More subtly, a firm can favor laws that raise its costs but raise competitors' costs by more. Health, safety, and environmental laws can require the installation of equipment that raises the average costs of large producers by less than small ones. Railroads losing business to truckers, for example, have sought safety laws that require shorter work shifts for truck drivers, and owners of mechanized mines have supported legislation that would harm labor-intensive competitors by requiring union-scale wages in all mines. Other portals can provide strategic access to government. Regulatory agencies like state public utility commissions and the Federal Communications Commission (FCC) set rates that telecommunications providers can charge, and they sometimes have powers to exclude competitors from markets.