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Reality or Illusion? The Efficacy of Nonmarket Strategy in Institutional Risk Reduction

Liedong, TA and Rajwani, T and Mellahi, K (2017) 'Reality or Illusion? The Efficacy of Nonmarket Strategy in Institutional Risk Reduction.' British Journal of Management, 28 (4). 609 - 628. ISSN 1045-3172

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Abstract

Nonmarket 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 (MPT) 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, MPT do not. We also find that the effect of MPT on risk exposure is moderated by public affairs functions. Contrary to extant literature, we do not find evidence of complementarity between MPT and CSR. Altogether, the findings do not only show that the proposed efficacy of MPT in risk reduction is illusive, but they also signal the need for scrutinizing the harmony between nonmarket political and social strategies

Item Type: Article
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Management Science and Entrepreneurship Group
Depositing User: Tazeeb Rajwani
Date Deposited: 01 Mar 2017 14:35
Last Modified: 29 Jan 2018 22:16
URI: http://repository.essex.ac.uk/id/eprint/19169

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