Feeling the Squeeze: Nonmarket Institutional Pressures and Firm Nonmarket Strategies

Abstract

This study investigates the drivers of pressures from various institutions in the nonmarket environment and the responses of MNEs to these pressures in a host country. By taking a broad institutional perspective, this study pairs and integrates the economic perspective of new institutionalism and the sociological perspective of neo institutionalism with the corporate political strategy perspective. This research provides a systematic review of the drivers underlying pressures from various types of nonmarket institutions that explain the preference of firms to use a transactional or relational strategy to deal with these pressures. The evidence is based on research involving MNEs in the Netherlands. The nonmarket institutions that exert the greatest pressures at the national level pushing MNEs to use transactional more than relational strategies and tactics are regulatory and standards agencies. The pressures of political institutions, interest groups, and the media, in contrast, trigger MNEs to employ relational rather than transactional strategies and tactics.

Drivers for Sustainable Business Models in Start-Ups: Multiple Case Studies

“…Further research could also extend to other countries. A certain degree of differentiation between start-ups based in other countries might occur due to different normative, cognitive, and regulative pillars influencing CSR [13].…”

The Influence of Governance and Ownership on CSR Practices in Romania

“…This second type of companies is called state owned enterprises or SOE's in this research. Next to these two ownership types, stock companies and SOE's a third dominant structure namely private companies (individual ownership) is visible which is investigated to compare the three different domains of public, semiprivate and private firms in Romania (Voinea & van Kranenburg, 2018;Djankov, 1995). A discussion and a definition of these specific ownership structures will be stated in the following subsections.…”

“…Stock companies and CSR practices Whilst for stock companies in developed countries the state or government is not a dominant stakeholder, CSR practices are implemented by pressures from shareholders and public opinion. Although certain legislation on environmental and labor standards is imposed by the government, these standards are "easily" met and are not a measure for CSR practices driven by the companies themselves (van Kranenburg & Voinea, 2018). Stock companies in general are thus free to initiate CSR practices on all fronts discussed earlier.…”

The Corporate Political Activity of MNCs: Taking Stock and Moving Forward

“…In this focused issue, Liedong and Frynas (2018), Voinea and van Kranenburg (2018) and White et al (2018) draw on institutional theory to explore how specific characteristics of institutional contexts shape firms' political activities and strategy.…”

“…Second, in their paper Feeling the squeeze: Nonmarket institutional pressures and firm nonmarket strategies, Voinea and van Kranenburg (2018) add to our understanding of the drivers of CPA by delineating how the pressures from different non-market institutions translate into specific MNC political strategies. More precisely, the authors integrate new institutional economics and the neo-institutional perspective to conclude that the strategies used by MNCs to manage such institutional pressures depend on the power held by the respective institution.…”