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

Tahiru Azaaviele Liedong, Tazeeb Rajwani, Kamel Mellahi

Research output: Contribution to journalArticlepeer-review

27 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)609-628
Number of pages20
JournalBritish Journal of Management
Volume28
Issue number4
Early online date10 Nov 2017
DOIs
Publication statusPublished - 10 Nov 2017

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Strategy and Management
  • Management of Technology and Innovation

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