Nonmarket Strategy Research Articles

Radiant rivalries: competition, coopetition and non-market strategies in the emergence of skincare and beauty services in France, 1900s–1970s

Radiant rivalries: competition, coopetition and non-market strategies in the emergence of skincare and beauty services in France, 1900s–1970s

Nonmarket strategy and legitimacy in institutionally voided environments: The case of Jumia, an African e-commerce giant

This paper examines how a newly established multinational enterprise (MNE) leverages nonmarket strategy (NMS) to deal with legitimacy problems posed by institutional voids in institutionally challenging contexts to gain legitimacy. Using a rich dataset from in-depth interviews, observations, and archival data on Jumia, an African e-commerce giant, we identify three types of institutional void (i.e., infrastructural, regulatory and legal, and cognitive cultural voids) that hinder the implementation of the e-commerce business model. We further unpack the MNE's specific NMS to validate, consolidate, and diffuse the new business model to gain legitimacy accordingly. Importantly, we theorize how MNEs, under various conditions of unstable institutional structures and mechanisms, employ NMS to achieve three kinds of legitimacy in the process—i.e., cognitive, regulative and normative legitimacies. Altogether, we integrate three prominent streams of literature in IB—NMS, institutional voids, and legitimacy literature—to build a theory on how MNEs deploy NMS to establish legitimacy in response to environmental uncertainty to validate their activities and consolidate trust by gaining political and regulatory support.

Global Digital Platforms’ Non-Market Strategies in Response to Institutional Pressure

Global Digital Platforms’ Non-Market Strategies in Response to Institutional Pressure

New Frontiers in Corporate Political Activities, Business-Govt Relations, and Nonmarket Strategy

New Frontiers in Corporate Political Activities, Business-Govt Relations, and Nonmarket Strategy

Spend it Wisely: Market and Non-market Strategies in the Development of New Drugs

Spend it Wisely: Market and Non-market Strategies in the Development of New Drugs

Vertical and Horizontal Coalition Composition as a Nonmarket Strategy

Vertical and Horizontal Coalition Composition as a Nonmarket Strategy

Digitization and Platforms: Bridging Market and Nonmarket Strategy

Digitization and Platforms: Bridging Market and Nonmarket Strategy

How does OFDI in Developed Economies Benefit EEFs? A Composite View of Market and Nonmarket Strategy

How does OFDI in Developed Economies Benefit EEFs? A Composite View of Market and Nonmarket Strategy

Connecting the Dots: Bridging Nonmarket Strategy and Corporate Innovation

Connecting the Dots: Bridging Nonmarket Strategy and Corporate Innovation

Marketing Responses to the Taxation of Soft Drinks Comment on "Understanding Marketing Responses to a Tax on Sugary Drinks: A Qualitative Interview Study in the United Kingdom, 2019".

The paper by Forde et al provides a useful qualitative consideration of marketing responses to the implementation of the 2018 Soft Drinks Industry Levy (SDIL) in the United Kingdom. This commentary discusses that paper and its conclusions and seeks to place them in a broader context for marketing, fiscal measures and health and public policy. It suggests that modern conceptualisations of marketing and wider considerations of market and non-market strategies could provide a valuable lens to understand the ways in which companies and sectors respond to the threats they perceive and the constantly changing sectoral opportunities. It is important that fiscal measures introduced have the desired effects, and that not only positive behaviours (whether of companies or consumers) are incentivised, but that adverse behaviours are actively disincentivised.

Social and political capabilities as nonmarket activities: What are they and how do firms develop them?

AbstractFirms recognize the need for strategic efforts in the nonmarket environment to improve their performance. We seek to explore the different ways in which firms learn about nonmarket strategies (NMS), whether the social or the political dimension. We conducted a search of previous NMS studies and analyzed this literature to reflect on the process of development and evolution of political and social corporate capabilities. Based on the theoretical insights of resource dependency theory (RDT) and the resource‐based view (RBV) and its variants, we adopt an external perspective of how firms capture critical political and social knowledge in the nonmarket environment and an internal perspective of how firms develop nonmarket capabilities from this new knowledge. We argue that the new knowledge obtained from the observation of peer firms, from co‐opting and collaborating with nonmarket and market actors and from their own experiences is incorporated into the firm's knowledge system and allows for the development and evolution of capabilities to integrate and deploy resources for strategic purposes. We also point out that changes in the nonmarket environment require firms to constantly seek new social and political capabilities. They learn, unlearn and relearn.

The emergence of populism as an institution and its recursive mechanisms: A socio-cognitive theory perspective

AbstractThe rise of populism worldwide provides an excellent setting to explore the dynamic relationships among international business (IB), institutional context, and IB policymaking. It also has important implications for multinational enterprises (MNEs). To understand populism’s recursiveness, such relationships need to be examined more broadly from a social psychology lens; also, within IB and IB policy research. While populism has been attracting widespread attention among many different IB stakeholders, our understanding of populism at the nexus of politics, the economy and social psychology remains undertheorized and, sometimes, misunderstood. We employ socio-cognitive theory (SCT) to answer how populism arises (RQ1) and establishes itself as an institution (RQ2). By shedding light on the origin and mechanics of populism’s recursive nature, the logic of “proto-institutions”, which we employ to understand institutional change in the context of populism, helps advance institutional theory within an IB context. Exploring the implications of populism for MNEs helps advance theory on MNE non-market strategies (NMSs) and shed light on MNEs’ corporate political activities. The re-framing of populism as a wicked problem further provides a theoretical toolkit for IB policy research. We present several future research directions for IB and IB policy research, as well as MNE research.

Multinationals from emerging economies: Strategies, challenges, and the way forward

AbstractMultinationals from emerging economies are relatively new players in the global economy. This Special Issue includes five articles that cover several important aspects of the market and nonmarket strategies pursued by emerging market multinational corporations (EMNCs). Given that only a few firms from emerging markets embrace the possibilities and challenges of going global, we highlight the need to examine country, industry, and firm level antecedents of the emergence of EMNCs. We also draw attention to the need to study the role played by immigrant populations in EMNC internationalization.

Impression management and leadership in failing or failed business-to-business firms during and post-COVID-19: Empirical insights from Africa

This paper is one of the pioneering studies to specifically link COVID-19 pandemic with business failures in African B2B firms and the role of leadership and impression management in mitigating business failures. Based on the qualitative data from Ghana and Nigeria, our findings show that although B2B firms in emerging markets are agile and proactive, the COVID-19 pandemic triggered the process of business decline leading to failure in some cases. Particularly, the lack of technological know-how and the absence of online business activities made it difficult for B2B firms to continue operations. Further, we found that case B2B African firms needed a balance of market and non-market strategies to avoid failure caused by the pandemic. Study findings also indicate that despite the challenges, the COVID-19 pandemic presented opportunities to B2B firms in emerging markets. Flexible working and employee management are found to be instrumental in avoiding business failure. Finally, our findings show that, despite the absence of institutional support in African emerging markets, several case B2B firms quickly adopted digital technologies to communicate with partners and manage online business operations.

Strategy integration, sustainable drivers of firm internationalization performance—Moderated by environmental uncertainty and firm capabilities

The global environmental uncertainty and the need for an organization to maximize profit and satisfy the interest of wider nonmarket groups/stakeholders in the host market propel and reinforce the need for strategic integration to achieve sustainable internationalization performance. The interest of this article is to examine the relative impact of market, nonmarket strategy, and strategy integration on the performance of medium and large organizations in Portugal. Furthermore, environmental uncertainty and firm capabilities were used as moderation to evaluate the performance implication of these strategy configurations on firm market advantage in the host country. Given the need to examine the relationship between the latent and measured variables in this study, structural equation models were used to test the stated hypotheses, while confirmatory factor analyses were used to assess the fitness of our model. Our findings revealed that strategy integration provides a more sustainable competitive performance than either market or nonmarket strategy when used separately, especially in highly regulated and standardized business contexts such as Portugal. Furthermore, our findings show that organization needs to design market-oriented strategies and select the types of nonmarket practices (lobbying, campaign contributions, etc.) that best fit and align with their overall corporate objectives without neglecting the host market environmental culture. Research on market and nonmarket integrations have long been overdue given its extensive proposition to firm sustainable performance in a foreign country. Our research shed light on the importance of strategy integration to combat the ever-changing dynamism of the business environment and the negative sentiment surrounding globalization and how a firm can successfully compete in an uncertain, highly regulated, and standardized market context.

Do CEO’s early-life marketisation experiences affect corporate social responsibility?

As interest in the role of the early-life experience of CEOs on firms’ decisions and outcomes increases, this study examines how a CEO’s early-life experience of China’s Reforms and Open policy period may influence his/her strategic decision on corporate social responsibility (CSR). A longitudinal analysis of a unique, hand-collected dataset of Chinese CEOs in publicly listed firms from 2009 to 2020 suggest that CEOs experienced the preliminary stage of reform and opening-up era negatively influence CSR undertaking while the CEOs grew up through the profound stage take more CSR. We further find that CEOs’ overseas study experience weakens the negative impact of CEOs that experienced through the preliminary stage of Reform and Opening-up era and CSR whereas it has no significant impact on relationship between CEOs that experienced through the profound stage of reform and opening-up era and CSR. And market competition weakens both CEOs experienced preliminary and profound stage of Reform and Opening-up era’ relationship with CSR. Implications for the upper echelons theory and non-market strategy are discussed.

Bargaining and Nonbargaining Nonmarket Strategies: A General Model and Data From Post-Communist Countries

This article addresses a theoretical gap in the literature by highlighting the significance of nonbargaining nonmarket strategies of firms. Relying on neo-statist political theory, we propose a theoretical model that hypothesizes a reliance on nonbargaining nonmarket strategies in situations marked by historically and situationally conditioned weakness of societal forces relevant to a firm (including the firm itself) as well as when relevant state institutions display high degrees of professional, structural, and ideological bureaucratic insularity. We survey 165 managers (each representing a separate firm) from 14 countries in Eastern Europe and Central Asia about the strategic importance of the nonmarket strategic initiatives. Our novel survey instrument captures a broader range of nonmarket strategic initiatives than previous empirical research has examined. The survey results provide preliminary support for our model, although the findings suggest the need for more research in different regional contexts.

Corporate strategy, political contributions and corporate risk-taking

Purpose Despite the importance and prevalence of corporate political activities in modern organizations, there remains limited insight on the potential relationship between political contributions and companies’ risk-taking activities. This study aims to examine the relationship between monetary political contributions of firms and corporate risk-taking activities in the context of unstable political and economic environments. Design/methodology/approach The authors use a two-step system GMM estimation to investigate the subject using a cross-country sample of 307 firms from 22 countries covered over 2002–2017. In line with previous studies, the authors control for various corporate governance mechanisms, firm-level factors and country-level characteristics. Findings The findings demonstrate that firms that make monetary political contributions exhibit lower levels of risk as measured by different proxies for risks, namely, systematic, idiosyncratic and total risk. Practical implications The results suggest that political contributions can be a useful mechanism to mitigate risk exposure. Also, the use of different risk measures and other factors for robustness fosters a better understanding of political connectedness in a more contextualized and dynamic manner. Originality/value This study seeks to contribute to the debate surrounding corporate strategy, political connectedness and corporate risk-taking by using actual monetary political contributions as an explicit measure of political connection. This study furthers scholarly understanding on the dynamics of corporate political activities using political contributions in monetary terms as a measure of political connectedness and its impact on risk-taking. Furthermore, the authors explore this topic using insights from nonmarket strategy literature and studies on political contributions.

Closing the Revolving Door: What if Board Political Connections Are Permanently Broken?

Politically connected firms critically rely on their sociopolitical capital to compete; however, a policy-induced loss of board political connections may pose a serious challenge for focal firms and prompt them to develop compensatory moves. Drawing upon resource dependence theory and the nonmarket strategy literature, we examine if and how focal firms may address this challenge through intensifying their bribery activities. Following a year 2013 policy shock that closed the revolving door between former government officials and connected firms in China, we identify a substantial increase of bribery expenditure in a sample of public corporations whose political independent directors were forced by the central government to resign in the subsequent years. Furthermore, we investigate how the strength of this response varies with a host of firm-level contingencies that capture dependence scope and dependence asymmetry in the business-government dyad at the time of the policy announcement. Our study contributes to strategy and governance literatures by demonstrating how firms restructure power relationships after the loss of board political capital. It also sheds light on the regulation of revolving doors under weak institutions by revealing the irony of a well-intentioned “anticorruption” government policy.

On the performance of platform-based international new ventures: The roles of non-market strategies and managerial competencies

On the performance of platform-based international new ventures: The roles of non-market strategies and managerial competencies