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Article

John A Parnell

With heightened regulations in many nations, increasing political influence, greater emphasis on government-business partnerships, and the rapid development of emerging…

Abstract

Purpose

With heightened regulations in many nations, increasing political influence, greater emphasis on government-business partnerships, and the rapid development of emerging markets, the notion of nonmarket strategy (NMS) is now widely viewed as a key component of a firm’s overall strategic orientation. The purpose of this paper is to investigate factors associated with strategic political emphasis (SPE), a key part of NMS.

Design/methodology/approach

A survey instrument including items related to competitive strategy, environmental uncertainty, strategic capability, performance, and SPE was administered to 275 managers in the USA. Strategy along Porter’s typology, strategic capabilities, uncertainty, and performance were measured via existing scales. Items were created to assess SPE.

Findings

Managers in firms with greater SPE also reported greater uncertainty about competition and markets, and lower capabilities with regard to management and technology. Managers in organizations with weaker market orientations (MOs) – including greater uncertainty about competition and markets, and lower capabilities in management and technology – emphasized greater SPE. Managers reporting lower capability levels in their firms were more likely to report higher SPE and to have increased SPE in the last decade. Select uncertainties and capabilities – not competitive strategy per se – appears to have prompted an increase in SPE in these firms.

Originality/value

An effective NMS is vital from the perspectives of both profit maximization for shareholders and the satisfaction of broader, social objectives. However, many executives are trained to excel in the market arena and may not have the skill set and temperament necessary for success in NMS and specifically, the political arena. Moreover, SPE and market strategies are not always consistent, challenging executives to integrate and balance the two orientations.

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Book part

Heechun Kim and Robert E. Hoskisson

Our study proposes a resource environment view (REV) of competitive advantage by unpacking the environmental origins of a firm’s competitive advantage. The key tenet of…

Abstract

Our study proposes a resource environment view (REV) of competitive advantage by unpacking the environmental origins of a firm’s competitive advantage. The key tenet of the REV is that the heterogeneity and imperfect mobility of strategic factor markets and institutions across countries explain how firms based in different countries would likely both create and sustain a competitive advantage. In particular, our study introduces the notion of “the paradox of environmental embeddedness.” The paradox lies in the fact that the same environmental conditions – in terms of strategic factor markets and institutions – that enable firms to create a competitive advantage can paradoxically also create a situation in which it is more difficult for these firms to sustain an advantage. Another important aspect of our study is that, to enhance our understanding of how firms manage the paradox of environmental embeddedness, our study specifies the resource environmental conditions under which firms’ internal and external resource-oriented strategies – that is, the development of dynamic capabilities and interventions in the country resource environment – are more beneficial when managing the environmental paradox. Overall, our theorizing has important implications for strategic management theory and practice.

Details

Emerging Economies and Multinational Enterprises
Type: Book
ISBN: 978-1-78441-740-6

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Article

Thomas Lawton and Tazeeb Rajwani

The purpose of this paper is to explore how, in unpredictable policy environments, specific managerial choices play a vital role in designing lobbying capabilities through…

Abstract

Purpose

The purpose of this paper is to explore how, in unpredictable policy environments, specific managerial choices play a vital role in designing lobbying capabilities through the choice of levels of investment in human capital, network relationships and structural modification.

Design/methodology/approach

Using an inductive case study approach, data were collected through 42 in‐depth, semi‐structured interviews and documented archival data. Cross‐case pattern sequencing was used to construct an interpretive model of lobbying capability design. Data were framed by the dynamic resource‐based theory of the firm.

Findings

Heterogeneous lobbying capabilities are adapted differently in private and state‐owned airlines as a result of diverse ownership structures and time compositions that interplay with organizational processes. The result is a divergence between private‐ and state‐owned airlines in how they engage with governmental actors and policies.

Research limitations/implications

The paper contributes to ongoing discourse in and between the dynamic capabilities and corporate political activity literatures, particularly on how state/non‐state‐owned airlines design their political lobbying capabilities. The research is limited in so far as it only studies the European airline industry.

Originality/value

The paper illustrates how a specific and far‐reaching unanticipated external policy stimulus (the 9/11 terrorist attacks) impacted on management choices for lobbying design in the European airline industry.

Details

European Business Review, vol. 23 no. 2
Type: Research Article
ISSN: 0955-534X

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Book part

Nan Jia and Kyle Mayer

We examine how a firm’s market-oriented capabilities (in areas such as R&D or marketing) and consumer focus (business-to-business or business-to-consumer) foster its…

Abstract

We examine how a firm’s market-oriented capabilities (in areas such as R&D or marketing) and consumer focus (business-to-business or business-to-consumer) foster its effectiveness in pursuing corporate political activities. We then explore the sustainability of any advantage that firms may gain from their political activities. We develop a conceptual framework to propose that a firm’s political capabilities to implement different political tactics, such as information provision and constituency building, are a product of how related these tactics are to different market-oriented capabilities and to the skills needed to serve different types of customers. Finally, we propose that the integration of market strategies and political strategies provides new insight into the sustainability of the advantages that a firm might gain through political activities.

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Article

John A. Parnell

Amidst rapid development in emerging economies, greater emphasis on public–private partnerships and a more complex regulatory environment, nonmarket strategy (NMS) is now…

Abstract

Purpose

Amidst rapid development in emerging economies, greater emphasis on public–private partnerships and a more complex regulatory environment, nonmarket strategy (NMS) is now widely viewed as a key component of a firm’s overall strategy. This paper aims to investigate how nonmarket and market strategies are influenced by strategic uncertainties and capabilities and ultimately drive firm performance.

Design/methodology/approach

A survey addressing strategic uncertainties, capabilities, NMS and market strategy and firm performance was administered online to 193 practicing managers in the USA. Measures for competitive strategy (i.e. cost leadership and differentiation), NMS, management and marketing capabilities, competitive and technology uncertainties and firm performance were adopted from or based on previous work. Hypotheses were tested via SmartPLS.

Findings

Emphasis on NMS was linked to high marketing capability, high competitive uncertainty and high technology uncertainty. Cost leaders were more likely than differentiators to emphasize on NMS, although all three strategies were positive drivers of performance. NMS appears to be viewed as a part of an integrated strategic approach by managers in many organizations.

Research limitations/implications

The sample included mangers in multiple industries. Self-typing scales were used to assess strategic emphasis and firm performance.

Practical implications

Emphasis on NMS can promote firm performance, but the relationship is complex. Strategic managers should align the NMS with organizational capabilities and a market-oriented strategy appropriate for the firm.

Originality/value

This paper provides empirical support for a model linking select strategic uncertainties, capabilities, market strategy and NMS and firm performance. It supports NMS as a key performance driver, but with links to uncertainties and capabilities that differ from those of market strategies.

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Book part

Stefan Heidenreich, Jonas F. Puck and Igor Filatotchev

Prior research on political strategies has predominantly analyzed singular political activities or drivers for firms to become politically active and, overall, only…

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.

Details

Orchestration of the Global Network Organization
Type: Book
ISBN: 978-1-78350-953-9

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Book part

Adam Fremeth, Brian Kelleher Richter and Brandon Schaufele

Campaign contributions are typically seen as a strategic investment for firms; recent empirical evidence, however, has shown few connections between firms’ contributions…

Abstract

Campaign contributions are typically seen as a strategic investment for firms; recent empirical evidence, however, has shown few connections between firms’ contributions and regulatory or performance improvements, prompting researchers to explore agency-based explanations for corporate politics. By studying intrafirm campaign contributions of CEOs and political action committees (PACs), we investigate two hypotheses related to public politics and demonstrate that strategic and agency-based motivations may hold simultaneously. Exploiting transaction-level data, with over 6.8 million observations, we show that (i) when PACs give to specific candidates, executives give to the same candidates, especially those who are strategically important to the firm; and (ii) when executives give to candidates who are not strategically important, PACs give to the same candidates potentially due to agency problems within the firm.

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Article

Hai Guo, Jintong Tang and Zelong Wei

By integrating the resource management perspective and the optimal distinctiveness perspective, the purpose of this paper is to explain how firms configure their…

Abstract

Purpose

By integrating the resource management perspective and the optimal distinctiveness perspective, the purpose of this paper is to explain how firms configure their managerial ties and competences to identify entrepreneurial opportunities.

Design/methodology/approach

Using survey data collected from 238 firms in a transition economy, this paper tests a model of firms’ exploration and exploitation competences under which managerial ties promote or constrain opportunity discovery.

Findings

The paper finds that managerial ties are positively related to opportunity discovery. More importantly, competence exploration strengthens the impact of business ties on opportunity discovery, whereas it weakens the impact of political ties. On the contrary, competence exploitation strengthens the effect of political ties on opportunity discovery, whereas it weakens the impact of business ties.

Originality/value

First, the findings enrich the social network perspective of opportunity recognition by linking managerial social ties to opportunity discovery in the context of a transition economy. Second, this paper adds to current understanding of the resource management perspective and the optimal distinctiveness perspective by exploring the fit between different managerial ties (business ties vs political ties) and different competences (exploration vs exploitation) in contributing to opportunity discovery.

Details

Management Decision, vol. 58 no. 2
Type: Research Article
ISSN: 0025-1747

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Article

John Parnell and Malcolm Brady

The purpose of this paper is to investigate the influence of internal capabilities and environmental turbulence on market (e.g. cost leadership and differentiation) and…

Abstract

Purpose

The purpose of this paper is to investigate the influence of internal capabilities and environmental turbulence on market (e.g. cost leadership and differentiation) and nonmarket (e.g. political and social) strategies (NMS), and considers how these strategies impact financial and non-financial performance in firms in the United Kingdom.

Design/methodology/approach

A survey was administered online to 215 practicing managers in the UK. Measures for competitive strategy (i.e. cost leadership and differentiation), NMS, strategic capabilities, market turbulence and firm performance were adopted from or based on previous work. Hypotheses were tested via SmartPLS.

Findings

Findings underscore the impact of market turbulence across all market and nonmarket strategy dimensions. Multiple links between capabilities and strategies were identified. Both cost leadership and differentiation were significantly linked to non-financial performance, but only differentiation was significantly linked to financial performance. An increased emphasis on social NMS was linked to higher financial performance, but not non-financial performance. Political NMS was linked to neither financial nor non-financial performance.

Research limitations/implications

The sample included managers in multiple industries. Self-typing scales were utilized to measure market turbulence, emphasis on capabilities, strategic emphasis and firm performance.

Practical implications

Emphasis on social NMS can promote financial performance, but political NMS does not appear to drive either financial or non-financial performance.

Originality/value

This paper provides empirical support for a UK-based model linking market turbulence, strategic capabilities, market and nonmarket strategies, and both social and firm performance. It supports NMS as a key performance driver, but with caveats.

Details

Journal of Strategy and Management, vol. 12 no. 1
Type: Research Article
ISSN: 1755-425X

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Book part

Woon Leong Lin, Murali Sambasivan, Jo Ann Ho and Siong Hook Law

Although various studies have investigated the corporate political activity (CPA), however, there is no definite report which shows its effect on the public policy outcome…

Abstract

Although various studies have investigated the corporate political activity (CPA), however, there is no definite report which shows its effect on the public policy outcome or the organization’s performance. Hence, the political effects of the corporate social responsibility (CSR) have garnered a lot of recent interest since the CSR included activities which have an intended or an unintended effect on the CPA–corporate financial performance (CFP) link. We use data made available by the 1995 Lobbying Disclosure Act, while the CSR indices were gathered from the Fortune Magazine’s most admired companies from 2007 to 2016. We analyzed the relationship between the organization’s CPA and CFP, with the help of the dynamic panel data system generalized method of moment (GMM) estimation. Their results showed that the CPA did not improve the firm’s performance. Moreover, CPA and CSR are substitute in affecting financial performance, because they are essentially exclusive investments that require resources but do not have synergies.

Details

Asia-Pacific Contemporary Finance and Development
Type: Book
ISBN: 978-1-78973-273-3

Keywords

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