Political activity and firm performance within nonmarket research: A review and international comparative assessment

Rajwani, Tazeeb; Liedong, Tahiru Azaaviele

doi:10.1016/j.jwb.2014.10.004

Cited by 167 publications

(71 citation statements)

References 150 publications

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“…Such political strategies are informational in form and could include lobbying and petitioning. Unfortunately, lobbying and petitioning have limited scope and application in emerging countries where the structures for private sector participation in policymaking are lacking (Rajwani and Liedong, ). Instead, relational strategies such as MPTs are predominant.…”

Section: Discussionmentioning

confidence: 99%

“…In essence, political ties alone are not enough. Firms need to use informational strategies such as lobbying or petitioning as they are more effective for policy and regulatory influence (Rajwani and Liedong, ). Although the policymaking process in most emerging countries does not offer many opportunities for firms to be involved, firms must enhance their capabilities to comment on policy issues using petitions and press conferences.…”

Section: Discussionmentioning

confidence: 99%

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Reality or Illusion? The Efficacy of Non‐market Strategy in Institutional Risk Reduction

Liedong

Rajwani

Mellahi

2017

British J of Management

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Non‐market strategy researchers have postulated that political and social strategies reduce the exposure of firms to risk, but those arguments have received little empirical attention. In this paper, we integrate social capital and institutional theories to examine the efficacy of managerial political ties (MPTs) and corporate social responsibility (CSR) in institutional risk reduction. Using survey data from 179 firms in Ghana we find that, whereas CSR reduces institutional risk exposure, MPTs do not. We also find that the effect of MPTs on risk exposure is moderated by public affairs functions. Contrary to extant literature, we do not find evidence of complementarity between MPTs and CSR. Altogether, the findings not only show that the proposed efficacy of MPTs in risk reduction is illusive, but they also signal the need for scrutinizing the harmony between non‐market political and social strategies.

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

Reality or Illusion? The Efficacy of Non‐market Strategy in Institutional Risk Reduction

Liedong

Rajwani

Mellahi

2017

British J of Management

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“…Scholars in international business (Doh & Lucea, ; Duanmu, ; Estrin, Meyer, Nielsen, & Nielsen, ; Frynas, Mellahi, & Pigman, ), strategy (Siegel, ; Zheng, Singh, & Mitchell, ; Zhu & Chung, ), and economics (Faccio, ; Fisman, ) have long argued that firms' relationships with governments influence their strategy and performance. However, firms create such political connections through a wide range of different channels, such as lobbying, campaign donations, bribery, or personal relationships between firm decision makers and government, and little is known about how these different channels through which political connections are established affect specific strategy choices (Bertrand, Kramarz, Schoar, & Thesmar, ; Mahmood, Chung, & Mitchell, ; Rajwani & Liedong, ; Siegel, ; Sun, Mellahi, & Wright, ; Zhu & Chung, ). Even the stream of literature that narrows the concept of firm political connections to those relationships that senior decision makers in a firm enjoy with government authorities has mostly overlooked differences that might arise as a consequence of which senior decision makers maintain these relationships (Sun et al, ).…”

Section: Introductionmentioning

confidence: 99%

How do firm political connections impact foreign acquisitions? The effects of decision makers' political and firm embeddedness

Albino-Pimentel¹,

Anand

Dussauge

2018

Global Strategy Journal

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Research Summary: We examine how firm political connections established through the political embeddedness of senior decision makers affect firms' foreign acquisition strategies. We argue that such political embeddedness affects the mental models of decision makers and, in turn, influences their preferences for particular strategies. We propose that political embeddedness leads to the formation of mental models that favor foreign acquisition strategies. We further argue that the firm embeddedness of politically embedded decision makers alters their mental models, thereby mitigating their inclination for such strategies. We find evidence consistent with our mental models explanation using a sample of foreign acquisitions made by French publicly traded firms during the 2009–2014 period. Overall, this study contributes to a better understanding of the mechanisms through which political connections impact global strategy. Managerial Summary: We investigate how firm political connections affect firms' foreign acquisition strategies. We argue that when firms have top decision makers with close connections to the government, they will make more foreign acquisitions. We further argue that this inclination toward foreign acquisitions is driven primarily by nonexecutive board members, with politically connected executives appearing to be more reluctant to engage in such strategies. We find evidence consistent with these ideas when examining foreign acquisitions made by French publicly traded firms managed by graduates of the prestigious ENA government school, which trains many government and senior civil servants in France.

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“…In particular, MNEs with a high dependence on nonmarket institutions may have to pursue political or social objectives in order to align their interests with those of the institutions (Marquis and Qian 2014), establishing the flow of critical resources (Kostka and Zhou 2013) or obtaining the support of critical stakeholders (Wang and Qian 2011). Much MNE research has explored the challenges the organizations face, the strategies and tactics they can undertake in dealing with institutions in various nonmarket contexts and their performance (Kostova and Zaheer 1999; Rajwani and Liedong 2015). For instance, Boddewyn (2016) provides an interesting overview of the studies dealing with the relationships between MNEs and political and regulatory institutions.…”

Section: Introductionmentioning

confidence: 99%

Feeling the Squeeze: Nonmarket Institutional Pressures and Firm Nonmarket Strategies

Voinea

Kranenburg

2018

Manag Int Rev

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This study investigates the drivers of pressures from various institutions in the nonmarket environment and the responses of MNEs to these pressures in a host country. By taking a broad institutional perspective, this study pairs and integrates the economic perspective of new institutionalism and the sociological perspective of neo institutionalism with the corporate political strategy perspective. This research provides a systematic review of the drivers underlying pressures from various types of nonmarket institutions that explain the preference of firms to use a transactional or relational strategy to deal with these pressures. The evidence is based on research involving MNEs in the Netherlands. The nonmarket institutions that exert the greatest pressures at the national level pushing MNEs to use transactional more than relational strategies and tactics are regulatory and standards agencies. The pressures of political institutions, interest groups, and the media, in contrast, trigger MNEs to employ relational rather than transactional strategies and tactics.

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Political activity and firm performance within nonmarket research: A review and international comparative assessment

Abstract: There

Cited by 167 publications

References 150 publications

Reality or Illusion? The Efficacy of Non‐market Strategy in Institutional Risk Reduction

Reality or Illusion? The Efficacy of Non‐market Strategy in Institutional Risk Reduction

How do firm political connections impact foreign acquisitions? The effects of decision makers' political and firm embeddedness

Feeling the Squeeze: Nonmarket Institutional Pressures and Firm Nonmarket Strategies

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