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

20 Pages Posted: 13 Nov 2017

See all articles by Tahiru Azaaviele Liedong

Tahiru Azaaviele Liedong

Cranfield University - School of Management

Tazeeb Rajwani

Cranfield School of Management

Kamel Mellahi

The University of Warwick

Date Written: October 2017

Abstract

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.

Suggested Citation

Liedong, Tahiru Azaaviele and Rajwani, Tazeeb and Mellahi, Kamel, Reality or Illusion? The Efficacy of Non‐Market Strategy in Institutional Risk Reduction (October 2017). British Journal of Management, Vol. 28, Issue 4, pp. 609-628, 2017. Available at SSRN: https://ssrn.com/abstract=3069120 or http://dx.doi.org/10.1111/1467-8551.12229

Tahiru Azaaviele Liedong (Contact Author)

Cranfield University - School of Management ( email )

Bedfordshire, MK43 0AL
United Kingdom

Tazeeb Rajwani

Cranfield School of Management ( email )

Bedfordshire, MK43 0AL
United Kingdom

Kamel Mellahi

The University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

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