Causal factors at the firm and institutional level that result in the development of non-market strategies: the findings of a systematic review

Purpose: nowadays, we observe that corporations are increasingly embracing Corporate Political Activity (CPA) and Corporate Social Responsibility (CSR). It is observed that some organizations have established an independent unit, labeled as the political, social responsibility, or non-market unit. However, the impact of non-market actions on corporate performance has not always been positively reported in the literature. When looking for a way to explain the strategic orientation of non-market activities in the literature, it is observed that how to distinguish strategic non-market activities from stand-alone ones is ambiguous. Even worse, it is unclear from this literature which factors result in the development of non-market strategies. Reffering to these facts, this research aims to identify factors result in the development of non-market activities in order to propose a pattern to explain the strategic orientation of non-market activities.



Methodology: this research is a systematic review that utilizes a configurational approach. In this research, we aim to present a new configuration of current knowledge to understand the factors result in the development of non-market strategies by identifying clues from previous studies and combining them into a cohesive whole. This means that we conduct a detective investigation in this research. We select 101 articles that can provide clues about the research problem in broad, multi-dimensional, and immature non-market literature. We then extract these clues by leveraging retroduction/abduction logic. The method of extracting codes related to firm and institutional-level factors involves a qualitative content analysis that utilizes thematic analysis. Thematic analysis begins by coding the content of articles openly and ends by identifying and introducing broader themes and meta-themes for a set of related themes.



Findings: the key findings of this research are the categorization of issues at the firm and institutional levels that are potentially candidates for developing non-market strategies. Pivotal themes of firm-level issues that are candidates for non-market strategy development are: the lack of competitiveness, complementing competitive advantage, national competitive advantage, institutional risk management, management of external stakeholders (legitimacy), organizational mission and values, and agency problem. All of these factors are encompassed by the broadest theme, which is “institutional costs of the transaction”. Similarly, pivotal themes of institutional-level issues that are candidates for non-market strategy development are: rent seeking, market failure, government failure, political risk, and ethics. All of these factors are encompassed by the broadest theme, which is the “management of institutional context”.



Conclusion: based on the findings, this research criticizes the hegemony of institutional theories of sociology in the non-market institutional discourse and stresses the need to centralize institutional theories of economics in this discourse. Also, this research develops a typology of transaction costs and explain it by leveraging the meta-theme "institutional costs of the transaction". In the following and by leveraging this typology, it proposes a pattern for integrated market and non-market strategy at the level of macro orientations of the firm. This pattern can also be used to explain the strategic orientation of non-market activities. This means that this research develops scientific discourse of non-market through the identification of causal factors result in the development of non-market strategy at the firm and institutional level, as well as through the creation a basis for explaining the strategic orientation of non-market activity in the form of an integrated strategy.