The Management Department
Department
Seminar Series
Daniel blake
IE MADRID
Tuesday, February 19th
2019
Room LE
CLUB at 10:00 am
Theme: “Additive
vs adaptive nonmarket strategies: How business associations affect firms’
willingness to outsource”
Abstract: Firms can pursue different forms of
nonmarket strategies in response to institutional challenges. On the one hand
firms can employ adaptive strategies by selecting governance modes that avoid
the market. On the other, they can pursue additive strategies and develop
institutional supplements or substitutes. In this study we investigate whether
or not the pursuit of an additive nonmarket strategy dampens the need for an
adaptive strategy and thereby enables firms to transact more easily in the
market. We argue that when firms do
participate in the additive nonmarket strategy of participating in a business
association, they will be more willing to consent to market governance and
outsource a part of their operations. Through quantitative analysis of firm
survey data from the World Bank, we find that firms that are members of a
business association are more likely to outsource operations and that this
relationship is strongest in contexts where judicial institutions provide weak
enforcement of market agreements.
