Question

When Microsoft was founded, the company devoted very few resources to lobbying activities. After a high-profile antitrust case against it, however, the company began to lobby heavily. Why does it make financial sense for companies to invest in lobbyists?

Short answer

Lobbying makes financial sense as, benefits of lobbying investment are more than its cost & the ROI is good

Step-by-step solution

Lobbying Definition

regulatory members - for own or organisational interest.

Corporate Giants engage in Lobbying to protect interests of their organisation.

Lobbying Financial Explanation

Microsoft was alleged by lawsuits through their competitors, due to unfair competition norms & restrictive practices - to gain & control monopoly. Afterwards, it engaged in Lobbying.

• Lobbying is financially efficient for such big firms, as :

Their return on investment on lobbying expenditure is very high. The benefits from lobbying is likely to far exceed the costs associated with lobbying.