Corporate governance and non-market strategy



Modern era corporate leaders are not only confronted with a host of activities by stakeholder activists seeking to influence their decisions, but also have to deal with an external environment whereby the boundaries between politics and business become increasingly blurred. Indeed, reports about corporate donations to political parties, intense lobbying, or the appointment of politicians to the board have become the norm. It therefore appears that firms increasingly recognize the need to complement their competitive strategies with non-market strategies involving corporate political activities. However, scholarly discourse remains relatively silent on the question how firms simultaneously embed competitive and non-market strategies into their overall governance architecture. The objective of this project is to enhance our theoretical and empirical understanding of how the systematic adoption of non-market strategies shape the governance practices and architectures of firms.


Corporate Governance, Non-market strategy, Stakeholder management, Corporate Political Activities, , Social Movements


Corporate governance is about the organizational architecture, including the structure and identity of the firm’s ownership, through which modern corporations develop and exploit their resources in order to create value for their shareholders and stakeholders. Research in this area has offered a wealth of insights into the antecedents and performance implications of governance structures across space and time, and has been of great practical value for managers, investors, and regulators around the world. 


Although the corporate governance literature has focussed mostly on the question how corporate governance practices and architecture of firms may help to secure return on investment for the liquid and often uninvolved shareholders of publicly listed firms, there has been an increasing appreciation of the insight that firm performance and survival are often critically dependent on the continued support of multiple stakeholder interests, both inside and outside the firm.


One key challenge for firms is that their stakeholders often have conflicting views on the most effective use of organizational resources, implying that firm leadership will have to balance these competing interests when making strategic decisions. Such decisions often require a balancing of economic and social goals. Mergers and acquisitions, for example, may be good for shareholders because of potential synergies between the resources and business models of the firms involved, but may have negative consequences for employees who may lose their jobs and communities that may lose economic activity and tax revenues as a result of the restructuring needed to realize these synergies. 


Strategic decisions become even more complicated when local communities, NGOs, or even governments target the firm with a host of activities seeking to influence firm decisions and their outcomes, or when regulation or public policy stand in the way of firms developing and rolling out their business models across national borders, as the ride hailing company Uber recently experienced in Europe. In such cases, firms will have to develop so-called non-market strategies to complement their commercial and market strategies, involving corporate political activities, such as lobbying for example, or developing plans to enter which market with which product or service based on a careful analysis of the regulation, institutions, politics and stakeholders involved in each market. 


Although research in management has long addressed the antecedents and consequences of specific stakeholder management and lobbying practices, it is mostly silent on how the increasing need to develop non-market strategies and stakeholder management practices shape the governance practices and architectures of firms, and what the antecedents and consequences may be of firms embedding stakeholder management and non-market strategies more firmly into their overall governance architecture. This research project seeks to address this gap in the literature and strives to answer questions like:

• Why do activist stakeholders or NGOs target firms to pursue their objectives, and how does this differ from targeting by shareholder activists, for example?

• How do firms respond to NGO, stakeholder, or social movement targeting, and how does this differ from managerial responses to shareholder activism?  

• What type of stakeholder management and non-market strategy activities do firms engage in, and to what degree are such activities connected to, or embedded in, the overall governance architecture of firms?

• What are the factors driving firms to engage in stakeholder management and non-market strategy activities, and what may explain differences between firms in the degree to which such practices are embedded in their overall governance architecture?

• How does the firm’s governance structure influence non-market strategy (antecedents, approaches, tactics, or outcomes)?

• To what extent can non-market strategies conflict with the interests of other stakeholders? Specifically, under which conditions do corporate political activity and corporate social activity act as complements? When do they act as substitutes?

• How do institutional differences across countries influence the outcomes of non-market strategies? How do multinational corporations govern non-market strategy across institutional contexts? How do activist stakeholders and NGOs coordinate actions against MNCs across institutional contexts?


Although this project could potentially involve qualitative explorative research to build theory and hypotheses to be tested, it will mostly involve large sample quantitative research on archival or primary data using a variety of advanced statistical and econometric techniques.

Literature references

• Bonardi, J.P., Holburn, G.L.F., & Van den Bergh, R.G. (2006). Nonmarket strategy performance: Evidence from the U.S. electric utilities. Academy of Management Journal, 49(6): 1209-1228.

• Dahan, N.M., Hadani, M., & Schuler, D.A. (2013). The governance challenges of corporate political activity. Business & Society, 52(3): 365-387.

• Dorobantu, S., Kaul, A., & Zelner, B. (2017). Nonmarket strategy research through the lens of new institutional economics: An integrative review and future directions. Strategic Management Journal, 38(1): 114-140.

• Hadani, M., Doh, J.P., & Schneider, M.A. (2016). Corporate political activity and regulatory capture: How some companies blunt the knife of socially oriented investor activism? Journal of Management, forthcoming.

• Hillman, A.J., & Hitt, M.A. (1999). Corporate political strategy formulation: A model of approach, participation, and strategy decisions. Academy of Management Review, 24(4): 825-842.

• McDonnell, M.H., King, B.G., & Soule, S.A. (2015). A dynamic process model of private politics: Activist targeting and corporate receptivity to social challenges. American Sociological Review, 80(3): 654-678.

• Oliver, C., & Holzinger, I. (2008). The effectiveness of strategic political management: A dynamic capabilities framework. Academy of Management Review, 33(2): 496-520

Expected output

The project is expected to result in top-ranking publications in journals like the Academy of Management Journal, Strategic Management Journal, Administrative Science Quarterly, Organization Science, or any other top-ranking management journal that may publish research on corporate governance or the non-market strategies of firms. Another important aim is to help the candidate secure an excellent placement at an internationally renowned research university upon completion of the thesis. 


This research will be conducted in cooperation with the Erasmus Centre for Strategic Competiveness Research and will use and contribute to (panel)databases on the largest European firms to be developed within this center.  

Societal relevance

Research findings on corporate governance and the non-market strategies of firms are expected to be of critical importance for modern era managers that have to balance competitive and non-market strategies. While there is a clear business case for strengthening the ties between business and politics in order to influence the political process to their advantage, there is also an increasing public discontent with the link between business and politics. Such discontent, however, is not only voiced by social activities alone, shareholders are also frequently calling for more transparency and disclosure of corporative political activities. This project seeks to offer guidance on how managers can resolve this tension.

Scientific relevance

The candidate is expected to contribute to unveiling several scientific puzzles at the intersection of corporate governance and the non-market strategies of firms. 

PhD candidate profile

The successful candidate:
• Is smart and intrinsically intellectually motivated;
• Has excellent analytical and writing skills;
• Has demonstrated experience in a variety of regression-based analytical techniques, such as panel data analysis, survival analysis, quasi experimental techniques, etc.
• Holds an MPhil or MSc in management or in one management’s mother disciplines (sociology, economics, political science, econometrics, and the like);
• Has achieved an excellent grade point average;
• Has written an interesting MPhil or MSc thesis;
• Meets or exceeds the formal ERIM admission criteria

Contact information

For academic questions only. For procedural questions, contact the Doctoral Office.


Monday, 15 January 2018