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Fiscal Policy’s (In)direct Effects: Lobb...

Murphy, Daniel, Sa...

Case

Fiscal Policy’s (In)direct Effects: Lobbying Priorities at Northrop Grumman

Murphy, Daniel; Saffie, Felipe; Harrison, Bryan

GEM-0232 | Published May 27, 2025 | 23 pages Case

Collection: Darden School of Business

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In the lead-up to the 2024 US elections, Northrop Grumman CEO Keri Waller convenes her executive team to reassess the company’s lobbying priorities amid a shifting fiscal and political environment. With over 85% of its revenue tied to US government defense contracts, Northrop Grumman is highly exposed to changes in government spending and tax policy. As the expiration of key provisions in the 2017 Tax Cuts and Jobs Act approaches and budget deficits continue to climb, Waller must choose how to allocate lobbying efforts—whether to advocate for increased defense spending, broader fiscal stimulus, or renewed corporate tax relief. Through the lens of a dynamic executive discussion, students grapple with competing economic mechanisms, such as Keynesian multipliers, supply-side incentives, and the crowding-out effect, while considering the implications of macroeconomic effects of fiscal policy for firm-level investment, employment, and innovation. The case invites students to evaluate fiscal trade-offs from both a firm-specific and systemic perspective, highlighting how government budget decisions can reverberate through corporate strategy and the broader economy.