The purpose of this paper is to explore how firms organize to engage in nonmarket strategy. To achieve this end, we explore the organization of nonmarket strategy via a formal model of the firm. The model is motivated by a qualitative study of the organization of nonmarket strategy of 25 large, US firms. Firms either integrate nonmarket strategy activities throughout the firm or create stand-alone business units that specialize in nonmarket strategy activities. We find that the advantage of integration over specialization is U-shaped in the importance of nonmarket strategy to the firm’s market strategy. We identify several other factors that predict the advantage (and disadvantage) of integration over specialization. The value of this paper is that it is (to the best of our knowledge) the first to identify the factors that should cause a firm to either integrate or specialize the organization of its nonmarket strategy. It also develops an original typology of the organization of nonmarket strategy.
|Original language||English (US)|
|Title of host publication||Strategy Beyond Markets (Advances in Strategic Management)|
|Editors||John M. De Figueiredo, Michael Lenox, Felix Oberholzer-Gee, Richard G. Vanden Bergh|
|Publisher||Emerald Group Publishing Ltd.|
|Number of pages||14|
|State||Published - 2016|