68 research outputs found
Corporate Political Strategies in Weak Institutional Environments: A Break from Conventions
There is a lack of research about the political strategies used by firms in emerging countries, mainly because the literature often assumes that Western-oriented corporate political activity (CPA) has universal application. Drawing on resource-dependency logics, we explore why and how firms orchestrate CPA in the institutionally challenging context of Nigeria. Our findings show that firms deploy four context-fitting but ethically suspect political strategies: affective, financial, pseudo-attribution and kinship strategies. We leverage this understanding to contribute to CPA in emerging countries by arguing that corporate political strategies are shaped by the reciprocity and duality of dependency relationships between firms and politicians, and also by advancing that these strategies reflect institutional weaknesses and unique industry-level opportunities. Importantly, we shed light on the muttered dark side of CPA. We develop a CPA framework and discuss the research, practical and policy implications of our findings
Responsible Firm Behaviour in Political Markets: Judging the Ethicality of Corporate Political Activity in Weak Institutional Environments
While support for corporate political activity (CPA) is well echoed in the literature, little has been done to empirically examine its ethicality. Moreover, existing ethical CPA frameworks assume normative and rational leanings that are insufficient to provide a comprehensive account of CPA ethicality. Utilizing the Ghanaian context, adopting a multiple case study design involving 28 Directors from 22 firms, and employing a grounded theory approach, I explore how the ethicality of CPA is determined in weak institutional environments. The findings reveal that business executives evaluate ethics at three levels (i.e. context, organizational and strategy) using three principles (i.e. utilitarianism, justice and institutions). Leveraging this knowledge, I present an eclectic framework that bridges the long-standing gap between normative ethical prescriptions and lived ethical realities. In doing so, I move away from abstraction to give “voice” to the actors involved in CPA. I also present a model that shows how the ethical judgement process is influenced by managerial intuition and interactive personal and organizational experiences. This article has important theoretical and practical implications for ethical business-government relations in developing countries
The impact of managerial political ties on cost of debt and institutional risk exposure: evidence from Ghana
This thesis integrates social capital and institutional theories with corporate governance insights to explore the impact of managerial political ties on access to finance, cost of debt and institutional risk exposure. Drawing on an extensive and rigorous assessment of the literature, using a unique set of survey data from 179 firms operating in Ghana, and employing robust analytical techniques, this thesis comprises three interrelated empirical studies which make significant contributions to knowledge.
The first empirical study examines the impact of political ties on access to finance and cost of debt. It shows that political ties are positively related to interest rates charged by commercial banks. This positive relationship is weakened by managerial financial ties, and strengthened by borrowing from privately owned banks and the appointment of Big Four audit firms. Altogether, the findings reveal that while political ties enhance access to finance, they increase the cost of debt. They suggest that institutional lapses in emerging countries increase lenders’ perceptions of corporate governance erosion in politically connected firms, hence the high interest rates these firms are charged when they borrow.
The second empirical study investigates the effect of political ties on institutional risk exposure. The findings show that political ties do not reduce risk exposure. The findings also show that while industry regulation and public affairs functions affect the strength of the relationship between political ties and institutional risk exposure, corporate social responsibility (CSR) does not. In sum, the findings suggest that the conjectured efficacy of political ties in risk reduction is illusive. The third empirical study explores mediation in the political ties-cost of debt relationship. The findings reveal a negative impact of political ties on corporate governance, and show that political ties increase cost of debt by reducing financial reporting quality and increasing the risk exposure of firms.
Through the three empirical studies, this thesis contributes to Corporate Political Activity (CPA) literature, social capital theory and institutional theory. It accentuates the contingent value of political ties and addresses the salient and overlooked “how” question in CPA research. It also fills the lack of insight into the complementarity between CPA and CSR. On the social capital and institutional fronts, this thesis deepens insight into the interactive effects of different types of social capital and highlights how institutional development and organizational legitimacy moderate the value of network ties in emerging countries
Taking stock and charting the future: The management and implications of DIY laboratories for innovation and society
DiY science, as a field of research and practice, has grown rapidly over the past few decades. However, a significant portion of the DiY corpus focuses on technical issues in engineering and health disciplines, which limits our knowledge about the administration of DiY innovation and other related topics. To further advance the field, this special issue examines the management and implications of DiY laboratories for innovation and society. It contributes to a better understanding of the contextual and individual antecedents, operations, governance, business models, and strategies of DiY labs. The chosen papers, representing a mix of review, conceptual, and qualitative methodologies from across Africa, Asia, and Europe, provide different approaches and views that extend the current boundaries of extant knowledge regarding DiY labs and science. This special issue also highlights what remains to be pursued and outlines some interesting future research directions
Political activity and firm performance within nonmarket research: A review and international comparative assessment
There is a widely held view that the performance of firms depends not only on the ability of managers to exploit economic markets but also on their ability to succeed in political markets. To test the value of political activism, recent scholarship has probed the impact of corporate political activity (CPA) on firm performance. However, mixed findings and the fragmented nature of the field raise more questions than answers as to the nature of this relationship. This systematic review examines scholarly articles for evidence of the impact of CPA on firm value. The findings suggest that CPA is more valuable in emerging countries and that relational CPA strategies are more common in emerging (versus developed) countries where social capital underlies political and economic exchange. We also document the paucity of research on informational CPA strategies and policy outcomes in the emerging country context. We consider the implications of these findings and others for local and multinational enterprises, and offer suggestions for further research
Reality or illusion? The efficacy of nonmarket strategy in institutional risk reduction
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
Information and Nonmarket Strategy: Conceptualizing the Interrelationship between Big Data and Corporate Political Activity
While extant research acknowledges the importance of information for corporate political activity (CPA), there is limited understanding of how information is actually used to deploy political strategies. This gap reflects a broader problem in the literature whereby Big Data (BD) research is overly focused on the impact of information on market performance but overlooks the impact on nonmarket performance. In this paper, we draw on the resource-based view to conceptualize the interrelationship between BD (i.e. information) and CPA. We argue that CPA motivates BD investments, which, in turn, shape the organization of CPA and spur the development of data-driven political capabilities. Our conceptual model, which unpacks the intricate linkages between CPA success factors, BD and political capabilities, generates important theoretical, practical and further research implications
The Impact of TMT Gender Diversity on Corporate Environmental Strategy in Emerging Economies
Drawing on upper echelon theory, we examine how top management team (TMT) gender diversity impacts the adoption of environmental standards in emerging countries. We further examine how this impact is affected by women executives’ personal attributes as well as organizational and institutional conditions. Using panel data from 490 firms in three highly polluted emerging countries (China, India and Pakistan) and employing Probit instrumental variable regressions, we find that the proportion of women in TMTs is positively related to the likelihood of ISO 14001 certification and renewal. Additionally, we find that high institutional gender parity, women executives’ power and CSR committees strengthen this relationship. Our findings, which demonstrate a systematic translation of women’s values into environmental strategy, make important contributions to literature and practice
The Impact of TMT Gender Diversity on Corporate Environmental Strategy in Emerging Economies
Drawing on upper echelon theory, we examine how top management team (TMT) gender diversity impacts the adoption of environmental standards in emerging countries. We further examine how this impact is affected by women executives’ personal attributes as well as organizational and institutional conditions. Using panel data from 490 firms in three highly polluted emerging countries (China, India and Pakistan) and employing Probit instrumental variable regressions, we find that the proportion of women in TMTs is positively related to the likelihood of ISO 14001 certification and renewal. Additionally, we find that high institutional gender parity, women executives’ power and CSR committees strengthen this relationship. Our findings, which demonstrate a systematic translation of women’s values into environmental strategy, make important contributions to literature and practice
Institutional Voids and Firms’ Resource Commitment in Emerging Markets: A Review and Future Research Agenda
The impact of institutional environments on firms' strategic decisions has been examined in strategy and international business literature. Yet, the current state of knowledge about how institutional voids affect firms' resource commitment in emerging markets is equivocal. This paper reviews and develops an integrative framework that maps the key conceptualizations, theoretical frames, mechanisms, contingencies and outcomes in the institutional voids – resource commitment literature. Altogether, this paper structures institutional voids and resource commitment research into salient themes to help scholars scope the field and explore value-adding avenues to further our understanding of internationalization and resource commitment decisions in emerging markets
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