Nonmarket Strategy

Nonmarket strategy refers to the tactical repertoire that firms draw on to manage and influence uncertain or contentious institutional environments. This includes firms’ efforts to exert influence over their regulatory (formal) and social (informal) environments. Nonmarket strategy is keenly related to corporate reputation in two primary ways. First, corporate and industry reputations play a role in whether firms recognize uncertainty within their environment as a threat that warrants a strategic response. Thus, reputations predict when firms will draw on nonmarket strategies to defensively respond to institution-level threats. Second, more reputable firms are likely to be able to draw from a wider range of nonmarket strategies—and to deploy them with more success—than less reputable firms. Thus, reputations determine firms’ choices about which nonmarket strategies to deploy, ...