Balancing social and political strategies in emerging markets: Evidence from India

Abstract

This article explores the substitution and complementary effects between political and social strategies on firm performance in the context of an emerging market (EM). Using in‐depth, historical case‐study approach, the article investigates how companies integrate political and social resources in this market. Corporate performance includes traditional measures, such as accounting performance and nonfinancial measures like the ease of doing business. The study finds that social strategies are stronger enablers of firm long‐term performance than political strategies. The latter have a short‐term impact on performance, but their success over time is limited. The main drawback of reliance on political resources in EMs is the lack of political stability, fragmented polity, and weak political coalitions. We identify rather limited evidence of firms using these two strategies as complements. Thus, we suggest that firms should employ both these strategies in the EM.

Political connections and corporate social responsibility: Political incentives in China

“…We contend that conceptualizing CSR strategy as inherently multifaceted explains why firms differ not only in their level of CSR, but also in the specific patterns of CSR strategy (i.e., which dimensions are emphasized). Similar to the results of political CSR research (Gao & Hafsi, 2017; Rao‐Nicholson et al., 2019; Shirodkar et al., 2018), we further confirm that political CSR, such as donations and housing, is indeed more vulnerable to political pressure. However, we also provide an extension by showing that other aspects of CSR will also be driven by political factors but to different extents, thereby expanding the scope of political CSR.…”

“…The inefficient market mechanism expands the power of the government, making the power inequality in the government–business relationship more apparent. Thus, political resources are particularly precious and scarce in less market‐oriented areas (Rao‐Nicholson et al., 2019; Schweizer, Walker, & Zhang, 2019). It is reasonable to expect that political connections would be more likely to bind firms to the government in less market‐oriented cities since firms rely more on the government, and thus, cannot afford the cost of defying government demands in these regions.…”

Does context matter for sustainability disclosure? Institutional factors in Southeast Asia

“…Nevertheless, national institutional environmental influences upon SD, have received much less attention (Jackson & Apostolakou, 2010;Martínez-Ferrero & García-Sánchez, 2017). Although there have been a few studies examining this relationship in recent years (See Mzembe, Melissen, & Novakovic, 2019;Rao-Nicholson, Khan, & Marinova, 2019), majority of these studies have been conducted using a qualitative approach which limits the ability to generalise findings above the studied settings.…”

Conceptualizing data‐deliberation: The starry sky beetle, environmental system risk, and Habermasian CSR in the digital age

“…Thus, PCSR has been broadly “defined as activities where CSR has an intended or unintended political impact, or where intended or unintended political impacts on CSR exist” (Frynas & Stephens, , p. 483). The political impacts of corporations can vary and are informed by different political ideals and political contexts, in which a corporation operates (Mellahi et al, ; Rao‐Nicholson et al, ).…”

“…Corporations can have varying political impacts, which may stem from diverse political ideals and different political contexts in which corporations operate (Frynas & Stephens, ; Mäkinen & Kourula, ; Whelan, ). Two broad streams of PCSR literature (see, e.g., Mellahi et al, ; Rao‐Nicholson, Khan, & Marinova, ) deal with the political understandings of corporations: (a) when it comes to corporate conduct under challenging political conditions, when the government is limited in reach and corporations act political by contributing to, for example, the provision of public goods or avoidance of public bad (Ingenhoff & Marschlich, ; Scherer, ; Westermann‐Behaylo, Rehbein, & Fort, ); and (b) when corporations act politically, by engaging in political processes to seek favorable regulatory outcomes (Anastasiadis, Moon, & Humphreys, ; Lock & Seele, , ).…”