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This paper provides a perspective on the field of nonmarket strategy. It does not attempt to survey the literature but instead focuses on the substantive content of research in the field. The paper discusses the origins of the field and the roles of nonmarket strategy. The political economy framework is used and contrasted with the current form of the resource-based theory. The paper argues that research should focus on the firm level and argues that the strategy of self-regulation can be useful in reducing the likelihood of challenges from private and public politics. The political economy perspective is illustrated using three examples: (1) public politics: Uber, (2) private politics: Rainforest Action Network and Citigroup, and (3) integrated strategy and private and public politics: The Fast Food Campaign. The paper concludes with a discussion of research issues in theory, empirics, and normative assessment.

The purpose of this paper is to explore how firms organize to engage in nonmarket strategy. To achieve this end, we explore the organization of nonmarket strategy via a formal model of the firm. The model is motivated by a qualitative study of the organization of nonmarket strategy of 25 large, US firms. Firms either integrate nonmarket strategy activities throughout the firm or create stand-alone business units that specialize in nonmarket strategy activities. We find that the advantage of integration over specialization is U-shaped in the importance of nonmarket strategy to the firm’s market strategy. We identify several other factors that predict the advantage (and disadvantage) of integration over specialization. The value of this paper is that it is (to the best of our knowledge) the first to identify the factors that should cause a firm to either integrate or specialize the organization of its nonmarket strategy. It also develops an original typology of the organization of nonmarket strategy.

The purpose of this study is to investigate the effect of international expansion of emerging markets multinationals (EMNEs) on the home country nonmarket political strategy and why some EMNEs intensify this political tie more than others.

We test our theoretical framework using longitudinal data, with 16 years of observations, in Multilatinas and state loans from Brazil, one of the main outward foreign direct investment (OFDI) players in the world and the OFDI leader in Latin America.

Theoretically grounded on the institution-based view of strategy, it can be postulated that international expansion is a driver of home country nonmarket political strategy. It can also be hypothesized that political tie intensity is affected by the capacity of EMNEs to deal with international expansion issues without having to depend on relationship with homes country nonmarket political actors. The results provide support for the hypotheses presented.

This paper contributes to the EMNE internationalization literature by extending the understanding of the underlying motivations and forces shaping the home country nonmarket political strategy of multinationals from emerging markets and, thus, helping understand why some EMNEs tend to be more politically active than others. Likewise, the study contributes to advancing understanding regarding the home country strategic responses adopted by Multilatinas and the forces behind the nonmarket political strategies they employ in their international expansions, especially during turbulent times.

The purpose of this study is to explore the relationship between nonmarket strategy and innovation performance, as well as the boundary factors that influence this relationship in the context of the pharmaceutical industry in emerging markets.

This study analyzed matched data of 227 Chinese pharmaceutical firms and two secondary databases with SPSS to examine the hypotheses.

Nonmarket strategy promotes the innovation performance. High level of firm internal knowledge utilization ability and strategic flexibility strengthens the effect of nonmarket strategy in promoting innovation performance, while information technology (IT) environment weakens the effect of nonmarket strategy in promoting innovation performance.

The research studies the positive impact of nonmarket strategy on innovation performance in the specific context of Chinese pharmaceutical industry, and it introduces the internal capabilities and external IT environment of the firm as moderators of the relationship between nonmarket strategy and innovation performance. More importantly, this research echoes the call for research on moderator of nonmarket strategy and identifies important boundary conditions. To the best of the authors’ knowledge, it also explores the impact of the IT environment on the implementation of nonmarket strategy for the first time, which deepens the research on nonmarket strategy’s effect on innovation.

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.

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.

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.

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

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.

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.

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.

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 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.

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

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

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.

Many multinational corporations that originate from emerging economies (emerging market multinational corporations (EMNCs)) opt for acquiring a target firm in a developed market to expediently upgrade their strategic capabilities. To successfully achieve their strategic goals in the developed markets, EMNCs may use market actions and nonmarket actions to mitigate the potential risk derived from the national political differences between their home emerging economy and host developed economy. This paper aims to extend the legitimacy-based view of political risk to study the influence of political animosity – defined as misalignment of the host-home countries’ national interests – on the EMNCs’ market and nonmarket strategy in a developed market.

In this paper, we examine all EMNCs that made cross-border acquisitions of the USA targets from 2005 to 2011. The final sample consists of 252 acquisitions originating from 25 emerging markets. This paper used Tobit regression analysis to test the direct and moderating hypotheses.

Facing a high level of political animosity between their home country and the host developed economy, EMNCs use a market strategy by acquiring less ownership stake in the developed market, as well as engage in a nonmarket strategy by increasing lobbying activities. In addition, because of the heightened legitimacy concerns of developed market shareholders, cross-listed EMNCs have a greater tendency than non-cross-listed EMNCs to improve their legitimacy through their market and nonmarket strategy.

The current paper sheds light on EMNCs’ international strategy in developed markets by examining both market and nonmarket actions. EMNCs are shown to be strongly motivated to engage in acquisitions in developed markets so they can acquire invaluable strategic resources, such as brands and distribution channels, to compete with the developed market multinationals. A sophisticated ownership strategy and corporate political activities are invaluable for EMNCs to catch up with developed market multinationals.

The purpose of this paper is to seek to advance the understanding of competitive interaction framework based on competitive dynamics theory that investigates how nonmarket and market factors concurrently affect the relationships among action and response, their integration, and initiating firm performance.

To test the hypotheses for this study, the authors used data collected from the news found in web sites of 72 Chinese firms over a five-year period from January 2007 to December 2011. The authors use the approach suggested by Baron and Kenny (1986) to test the mediated effect of rival response and speed, after structured content analysis is adopted to overcome the challenges of identification and measurement by using a sample of competitive actions and responses.

The results test partial mediating role of rival response and speed in linking nonmarket, market, and integrated action with initiating firm performance outcomes. Rival responses and speed may vary systematically in nonmarket action. The relationship between the integration of competitive action and initiating firm performance is positive, high, and significant.

The results of this study were limited by a sample in China. The authors further need to consider how nonmarket and market components are operationalized in different institutional environments. The authors study only captures observable moves reported in the news of Chinese firms’ web sites. This single-data source collection raises the specter of cognitive bias. It is advised to collect data from multiple sources, perhaps directly measuring the managers’ perception by using a questionnaire-based survey.

Firms whose main focus is to launch market actions in an effort to gain competitive advantage should ensure that their nonmarket actions constitute interfirm rivalry. Particularly, this study also encourages managers to continuously and rapidly integrate nonmarket actions into their analyses of market competition for firm success. Additionally, managers need to develop effective information-processing mechanisms to analyze, monitor, forecast, and interpret rival response and speed for each competitor.

The research contributes to the authors’ understanding of the nature of nonmarket and market competition by bridging nonmarket action into traditional competitive dynamics.

While the liberalization of economies within the transition paradigm is viewed to take place primarily on a macroeconomic (primary) level, this paper switches emphasis to the secondary and tertiary level of post-transition. While macroeconomic reforms may provide the playing field, secondary reforms level the playing field and tertiary reforms develop the capabilities necessary for firms and individuals within firms to compete in the landscape of liberalized economies. It is necessary to examine the transformations on three levels. First, the development of public policy and institutions aimed at regulating certain industries or firms. Second, the explicit market strategies of firms operating in the industries that shape market structure and inform public policy. Third, the nonmarket strategies of firms aimed at influencing the form and substance of public policy. Drawing on research in three related areas: institutional voids (IVs), the role of market and nonmarket strategies of firms, respectively, this paper examines the current state of transition in CEE/FSU countries. The main conclusions of the paper are first, transition and post-transition has been and continues to be profoundly impacted by the liberalizing influences of multinational firms. Second, this causation from the strategies and tactics of multinational firms to the extent of transition also helps to explain the degree of modernization of economies in a given transition economy. Third, it is important to distinguish between local and foreign firms on the transition process. Foreign firms are more likely to pursue liberalization agendas when it strengthens their competitive advantage over local firms. Conversely, local firms – especially those who rely on the capacity to navigate institutional voids – may be opposed to liberalization, as liberalization would threaten their sources of competitive advantage.

This paper explores how firms within the audience measurement industry, specifically its radio and television markets, have navigated myriad market and nonmarket challenges. The market strategies and the nonmarket forces that constrain those strategies are largely defined by two features: the delineation of its geographic markets by political boundaries and markets that have natural monopoly characteristics. While the pre-monopoly stage or periods of competition may be comparatively short-lived, they are still telling. Monopolists undertake market strategies designed to ensure that they are not supplanted and nonmarket actions geared to avoiding undesirable constraints and reputational damage. Depending on their legal and regulatory environment, customers of the measurement services have used both market and nonmarket actions to mitigate the market power of the audience measurement firms. This paper focuses primarily on the U.S. radio and television audience measurement markets that Arbitron and Nielsen, respectively, have dominated for decades. Non-U.S. markets, which frequently feature America’s foremost firms, illustrate alternatives to America’s largely laissez-faire approach.