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Nonmarket and market strategies, strategic uncertainty and strategic capabilities

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  • John A. Parnell

Abstract

Purpose - Amidst rapid development in emerging economies, greater emphasis on public–private partnerships and a more complex regulatory environment, nonmarket strategy (NMS) is now widely viewed as a key component of a firm’s overall strategy. This paper aims to investigate how nonmarket and market strategies are influenced by strategic uncertainties and capabilities and ultimately drive firm performance. Design/methodology/approach - A survey addressing strategic uncertainties, capabilities, NMS and market strategy and firm performance was administered online to 193 practicing managers in the USA. Measures for competitive strategy (i.e. cost leadership and differentiation), NMS, management and marketing capabilities, competitive and technology uncertainties and firm performance were adopted from or based on previous work. Hypotheses were tested via SmartPLS. Findings - Emphasis on NMS was linked to high marketing capability, high competitive uncertainty and high technology uncertainty. Cost leaders were more likely than differentiators to emphasize on NMS, although all three strategies were positive drivers of performance. NMS appears to be viewed as a part of an integrated strategic approach by managers in many organizations. Research limitations/implications - The sample included mangers in multiple industries. Self-typing scales were used to assess strategic emphasis and firm performance. Practical implications - Emphasis on NMS can promote firm performance, but the relationship is complex. Strategic managers should align the NMS with organizational capabilities and a market-oriented strategy appropriate for the firm. Originality/value - This paper provides empirical support for a model linking select strategic uncertainties, capabilities, market strategy and NMS and firm performance. It supports NMS as a key performance driver, but with links to uncertainties and capabilities that differ from those of market strategies.

Suggested Citation

  • John A. Parnell, 2018. "Nonmarket and market strategies, strategic uncertainty and strategic capabilities," Management Research Review, Emerald Group Publishing Limited, vol. 41(2), pages 252-274, March.
    • Handle: RePEc:eme:mrrpps:mrr-05-2017-0151
    DOI: 10.1108/MRR-05-2017-0151
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    Citations

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    Cited by:

    1. Krammer, Sorin & Jimenez, Alfredo, 2019. "Do political connections matter for firm innovation? Evidence from emerging markets in Central Asia and Eastern Europe," MPRA Paper 94942, University Library of Munich, Germany.
    2. Long Zhang & John A. Parnell & Chuanhui Xiong, 2021. "Market and Nonmarket Strategies (NMS) in China: Performance Payoffs in Turbulent Environments," Asian Business & Management, Palgrave Macmillan, vol. 20(5), pages 644-665, November.
    3. Gaygysyz Ashyrov & Oliver Lukason, 2022. "Political Connectedness and Financial Performance of SMEs," JRFM, MDPI, vol. 15(12), pages 1-17, December.
    4. Rafal Matwiejczuk & Agnieszka Tluczak & Liliana Hawrysz, 2020. "Dynamic Capabilities Revisited: Lessons from Logistics," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 979-996.
    5. Krammer, Sorin M.S. & Jiménez, Alfredo, 2020. "Do political connections matter for firm innovation? Evidence from emerging markets in Central Asia and Eastern Europe," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    6. Parnell, John A., 2021. "An Ounce of Prevention: What Promotes Crisis Readiness and How Does It Drive Firm Performance?," American Business Review, Pompea College of Business, University of New Haven, vol. 24(1), pages 90-113, May.

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