de Figueiredo co-edits book on non-market business strategy
John de Figueiredo, the Edward and Ellen Marie Schwarzman Professor of Law and Professor of Strategy and Economics, has co-edited a new volume of innovative scholarship on the non-market strategies corporations use to enhance their performance and value.
Articles in the collection, titled Strategy Beyond Markets, focus on corporate interactions with entities other than the competitors, customers, and investors that constitute their primary market stakeholders. These “beyond-market” or non-market players include non-governmental organizations, environmental activists, communities, regulators, politicians, and the courts.
Firms’ beyond-market strategies fall into two general categories, explained de Figueiredo, who helped create the field of study in the 1990s: public non-market strategies — “public politics” — involving domestic and international policymakers, legislators, rulemakers, and the courts; and private non-market strategies — “private politics” — involving such special-interest groups as media, activists, and NGOs. Corporate strategy in the first category might include lobbying and litigating, and in the second, negotiating, self-regulating, or mounting public relations campaigns, he said. The collection organizes scholarship around those two broad areas as well as a hybrid “integrated political strategy” that bridges non-market and market-based competitive strategies.
In the volume’s first article, by Professor David Baron of the Stanford Graduate School of Business, three cases illustrate the three approaches: how Uber uses lobbying to influence regulators in the pursuit of market expansion, how Citigroup used negotiation and self-regulation to quell a campaign against its investments in developing countries by environmental activists, and how McDonald’s might respond to a campaign to raise workers’ wages.
A central goal of the book is to create a launchpad for future scholarship in the field of non-market strategy, the editors write in their introduction. While corporate managers have been crafting non-market responses to regulatory and interest-group pressures to address such matters as environmental, health, and social issues since the 1960s, scholarly research into how those strategies relate to firm performance and profitability has lagged.
“We hope that this book will set the cornerstone for establishing strategy beyond markets or non-market strategy as a mainstream branch of strategic management scholarship and will help to identify paths for future contributions to our understanding of corporate behavior and competitive strategy,” said de Figueiredo, who teaches Business Strategy for Lawyers at Duke Law. He will host a conference on the subject at the Law School next May.
Strategy Beyond Markets is a special issue in the “Advances in Strategic Management” series published by Emerald Group Publishing. de Figueiredo’s co-editors are Michael Lenox of the Darden School of Business at the University of Virginia, Felix Oberholzer-Gee of Harvard Business School, and Richard G. Vanden Bergh of the School of Business Administration at the University of Vermont.