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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.

This paper aims to examine how a firm’s capability affects its political networking in emerging economies and how the institutional environment influences the relationship between a firm’s capability and its political networking.

The authors test the theoretical model by analyzing a database from a World Bank survey in China.

The results show a nonlinear (U-shaped) relationship between a firm’s capability and its efforts in political networking. The relationship between a firm’s capability and political networking is contingent on the institutional environment, as reflected in institutional development and industry regulation.

This study elucidates political networking in emerging economies and contributes to research on corporate political strategy.

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.

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.

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.

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.

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.

The authors revisit the traditional OLI paradigm with the objective to allocate politics within the set of internationalization advantages by building on the political strategy literature. The authors outline the specific role of political advantage that facilitates and propels the international expansion of state-owned multinational enterprises (SOMNEs) from emerging markets.

A conceptual paper which explains the role of political advantage in the internationalization of SOMNEs. The authors expand the scope of the OLI to capture the impact of firms' home governments' policies and relationships with host countries which are leveraged by SOMNEs in their internationalization.

The authors define political advantage as a new type of advantage which depends on and is sourced from external actors. The authors argue that P-advantage is a multifaceted and unstable part of POLI composition, which is contingent on political shifts and may be leveraged by various firms. The authors also assert that political capabilities have limitations in sustaining political advantage, which may be compensated via enhancing the political activity of firms.

The authors conceptualize the POLI-advantages paradigm for the internationalization of SOMNEs by proposing that in addition to the traditional ownership, location, and internalization advantages, firms can capitalize on their political advantage to enter markets where internationalization might have been difficult without their political connections.

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.

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.

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.

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.

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.

Political risk is a complex phenomenon. This complexity has incentivized scholars to take a piecemeal approach to understanding it. Nearly all scholarship has targeted a single type of political risk (expropriation) and, within this risk, a single type of firm (MNCs) and a single type of strategic mechanism through which that risk may be mitigated (entry mode). Yet “political risk” is actually a collection of multiple distinct risks that affect the full spectrum of foreign firms, and these firms vary widely in their capabilities for resisting and evading these risks. We offer a unified theoretical model that can simultaneously analyze: the three main types of political risk (war, expropriation, and transfer restrictions); the universe of private foreign investors (direct investors, portfolio equity investors, portfolio debt investors, and commercial banks); heterogeneity in government constraints; and the three most relevant strategic capabilities (information, exit, and resistance). We leverage the variance among foreign investors to identify effective firm strategies to manage political risk. By employing a simultaneous and unified model of political risk, we also find counterintuitive insights on the way governments trade off between risks and how investors use other investors as risk shields.

After several years of political emancipation from colonial rule, it is time for African nations to do the same economically. Our analysis indicates that the current political leadership environment is VUCA laden and complicated, leading to grand challenges on the continent. Therefore, the old political leadership models are inadequate for addressing the African VUCA and leadership landscape, hence, the inability to achieve the needed economic advancement. We propose a paradigm shift in political leadership for the continent to bring the decades-long desire for economic freedom to fruition by adopting the relevant organizational science and corporate leadership models for political leadership effectiveness in this complex and dynamic environment. We accomplish this by integrating three frameworks to derive nascent management and leadership capabilities relevant to the new African political leadership context and to ensure current and future leadership readiness for this new environment.

This study examines the effect of political networking capability (PNC) and strategic capability on exploratory innovation/exploitative innovation through the mediation of absorptive capability (AC).

Using empirical survey data collected from 153 traditional manufacturing firms (TMFs) in China, the authors apply partial least squares structural equation modeling (PLS-SEM) combined with mediation analyses to test hypotheses.

PNC has a higher impact on exploratory innovation than exploitative innovation through AC. The authors thus provide novel empirical insights into independent variables of firms' ambidextrous innovation and their implementation mechanisms.

The authors highlight a unique situation of China and contribute to the literature on PNC and AC. The findings demonstrate that AC plays an important role in configuring government-obtained external resources into new products, thus influencing ambidextrous innovation strategic decisions.

TMFs' executives should enhance PNC to obtain more resources to conduct exploratory and exploitative innovation. Government officials and policymakers should strengthen the supervision of TMFs' innovation activities and adopt effective measures to ensure that TMFs could conduct more exploratory innovation as governments expected.

This study provides new insights by bridging research gaps in the literature and advances the insights of how TMFs' PNC/strategic capability directly and indirectly fosters exploratory and exploitative innovation via the mediating role of AC in China.

The purpose of this paper is to summarise the core literature on political risk and to suggest avenues for future research.

Applying bibliometric analysis as a starting point, this systematic review identifies the current core body of literature on political risk and uncovers the theoretical building blocks of the research field.

A synthesis of the key literature reveals three broad analytical foci: the sources of political risk; the effects of political risk; and actors’ (countries, industries, firms and projects) vulnerabilities, capabilities and responses to political risk.

The authors propose a unifying conceptual framework for political risk research.

The paper provides managers with a tool kit to analyse political risk. Moreover, it aids policy-makers in addressing political risk in a comprehensive manner.

The paper represents the first systematic review of the political risk literature in over 30 years. By offering an integrated theoretical framework, it paves the way for new insights into an increasingly topical field.