Complementarity Versus Substitution among Political Strategies

Abstract

Prior research on political strategies has predominantly analyzed singular political activities or drivers for firms to become politically active and, overall, only scarcely obtained insights on performance consequences of political strategizing. To further develop the realm of political strategy, this study analyzes the effects of two “generic” political strategies on firms’ (1) stakeholder network development and (2) performance. Specifically, we provide theoretical and empirical evidence whether the two political strategies add to or substitute each other in their effect on the corresponding outcome variable. We find that an information strategy significantly affects the stakeholder network development, whereas no influence of a financial incentive strategy could be detected. Moreover, we find that the stakeholder network drives firm performance and, more importantly, that the two political strategies substitute each other in their effect on firm performance. Thus, we provide initial insights on the efficiency of political strategies when firms opt to execute an information strategy and financial incentive strategy simultaneously. The results of our study have important implications for research as they put a new light on the efficiency of political strategies.

Citation

Heidenreich, S., Puck, J.F. and Filatotchev, I. (2014), "Complementarity Versus Substitution among Political Strategies", Orchestration of the Global Network Organization (Advances in International Management, Vol. 27), Emerald Group Publishing Limited, Leeds, pp. 235-262. https://doi.org/10.1108/S1571-502720140000027032