A Study On Integrative Interactions Of Corporate Non-market Strategy And Market Strategy

Based on theoretical and empirical researches including case study and structured content analysis, this paper explore the strategic management mode of integration of corporate market and nonmarket strategies in China's transition, as well as the behavior mode of interaction of market and nonmarket strategies.A growing body of management literature asserts that social and political environment is of increasing importance to the strategic management of business firms. Firms have been confronted by an organized, activist, and concerned set of stakeholders clamoring for improved corporate performance on a wide range of issues in social and political environment. Indeed, for many firms, market success depends not just on their products and services, the efficiency of their operations and the organization of their supply chains and distribution channels. Success also depends on how effectively they deal with governments, interest groups, activists, and the public. These social and political stakeholders that are labeled as the nonmarket forces by Baron (1995b)'s study can unlock markets, reduce regulation, handicap rivals, and generate competitive advantage (Meznar & Nigh, 1993) . Nonmarket is as important as market which has the significant effect on the success of firms in the business environment. However, firms not only comply with these influences, but do actively attempt to set or change the external environment by nonmarket activities (e.g., corporate social responsibilities or political activities). How can the nonmarket strategies be integrated into the strategic management process? What might be the new explanations of the strategic management when considering nonmarket component in China's transition? Thus, the integration of nonmarket and market strategies will enrich the classical strategic management theory which is the new trend of the field of strategic management.Firstly, based on the case study, this paper emphasized the need for organizations to view nonmarket issues management as providing the basis for an overall strategic orientation in transitional environment. The nonmarket environment should be incorporated with the formal analysis of external environment. Yet, it is identified as three types of nonmarket issues with different natures in China's transition. Then, the results suggest 12 nonmarket strategies and 69 tactics named as issues-oriented corporate nonmarket strategies in this study. Finally, based on the resource-based theory, institutional theory and strategic choice theory, this paper proposes an integrated mode of strategic management with the integration in three levels: definition of corporate mission and strategic objectives, decision of strategies and implementation of strategies.Secondly, based on the content analysis method, this paper integrate the corporate nonmarket behaviors (such as social, legal, and political activities of firms) into the previous research of competitive interaction that has generally only focused on market behaviors and expand an existing model of competitive interaction that includes nonmarket actions as sources of sustainable competition. The results indicate: (1) an expanded competitive interaction model includes market and nonmarket components must involved the expanded competitive scope, behaviors and relationships; (2) the related arguments in previous literature of competitive interaction were also the suitable explanations for the market and nonmarket behaviors in product and customer-oriented scope. However, due to the level of magnitude, competence and resource- dependent of a firm, the market and nonmarket behaviors in resource-oriented scope have different situation. This paper develops an available research model to expand previous study of competitive interaction that includes corporate nonmarket behaviors and provides real estate cases in Chinese transitional environment by the historical data.Lastly, based on the 'structured content analysis' of the longitudinal data from a journal of Chinese real estate industry during last eleven years, this paper studies the nature of public issue life cycle and corresponding issues-oriented corporate nonmarket strategies in a transitional economy. This paper finds out that in a transitional economy like China: (1) a new stage called 'policy trial' and double-steps of policy introduction were found in the public issue life cycle; (2) the possible outcomes of Chinese public issues are partially consistent with Tombari (1984)'s arguments; (3) the evolution of corresponding issues-oriented corporate nonmarket strategies takes a more complex and different path compared with that in the West. In general, this paper provides an available research perspective (the public issue life cycle model) for firms to manage and monitor their external political environment by effectively developing corresponding issues-oriented corporate nonmarket strategies in a transitional economy.