Non-Market Strategy Research through the Lens of New Institutional Economics: An Integrative Review and Future Directions

Strategic Management Journal, Forthcoming

48 Pages Posted: 22 Jun 2016 Last revised: 23 Jun 2016

See all articles by Sinziana Dorobantu

Sinziana Dorobantu

New York University (NYU) - Leonard N. Stern School of Business

Aseem Kaul

University of Minnesota - Minneapolis

Bennet A. Zelner

Duke University's Fuqua School of Business

Date Written: June 15, 2016

Abstract

Research summary: We use a novel theoretical framework to synthesize ostensibly disparate streams of non-market strategy research. We argue that faced with weak institutions, firms can create and appropriate value by either adapting to, augmenting, or transforming the existing institutional environment, and can do so either independently or in collaboration with others. We use the resulting typology of six distinct non-market strategies to provide an integrative review of non-market strategy research. We then extend this framework to examine the choice between non-market strategies, arguing that this choice depends upon whether the existing institutional environment is incomplete or captured, and discussing other drivers of non-market strategy choice, the relationship between these strategies, and their social impact, so as to provide an agenda for future research.

Managerial summary: The pursuit of competitive advantage often requires firms to operate in contexts where existing rules and regulations provide inadequate protection. Disruptive technologies open up new opportunities for value creation, but it takes years before appropriate regulations are introduced. Economic reforms open up new markets, but these are often regulated to favor incumbents and politically connected insiders. In such environments, managers must decide whether to adapt their strategies to the existing institutional environment, devote resources to improve it, or try to transform it altogether. In this article, we develop an integrative theoretical framework that connects and synthesizes research examining each of these options, and offers some preliminary thoughts on how managers may choose among these different approaches.

Keywords: Non-Market Strategy; Institutional Environment, Stakeholder Relations, Corporate Social Responsibility, Corporate Political Strategies

JEL Classification: D62, D71, L22, L33, M14, P16

Suggested Citation

Dorobantu, Sinziana and Kaul, Aseem and Zelner, Bennet A., Non-Market Strategy Research through the Lens of New Institutional Economics: An Integrative Review and Future Directions (June 15, 2016). Strategic Management Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2798720 or http://dx.doi.org/10.2139/ssrn.2798720

Sinziana Dorobantu

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Aseem Kaul (Contact Author)

University of Minnesota - Minneapolis ( email )

321, 19th Avenue S
3-412 Carlson School of Management
Minneapolis, MN 55455
United States

Bennet A. Zelner

Duke University's Fuqua School of Business ( email )

100 Fuqua Drive
Box 90120
Durham, NC 27708-0120
United States

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