Market and Nonmarket Strategies (NMS) in China: Performance Payoffs in Turbulent Environments

  • 3 Accesses


This paper investigates the financial and non-financial performance effects of strategic emphasis during times of market turbulence in China. A survey of 246 middle and upper-level managers in Beijing identified market turbulence as a direct driver of firm performance, a positive moderator of the link between market strategy and financial performance, and a negative moderator of the link between market strategy and non-financial performance. Market turbulence did not moderate links between either market strategy or nonmarket strategy and non-financial performance. These results suggest a performance payoff for leveraging NMS and a performance penalty for emphasizing market strategies during turbulent times.

This is a preview of subscription content, log in to check access.

Access options

Buy single article

Instant unlimited access to the full article PDF.

US$ 39.95

Price includes VAT for USA

Subscribe to journal

Immediate online access to all issues from 2019. Subscription will auto renew annually.

US$ 191

This is the net price. Taxes to be calculated in checkout.

Fig. 1


  1. Arora, A., Arora, A. S., & Sivakumar, K. (2016). Relationships among supply chain strategies, organizational performance, and technological and market turbulences. International Journal of Logistics Management,27(1), 206–232.

  2. Assudani, R. H. (2008). What does it mean to manage ‘knowledge’: Implications for the strategic management of knowledge in firms? International Journal of Management & Decision Making,9(6), 646–659.

  3. Bach, D., & Allen, D. (2010). What every CEO needs to know about nonmarket strategy. MIT Sloan Management Review,51(3), 41–48.

  4. Baines, P. R., & Viney, H. (2010). The unloved relationship? Dynamic capabilities and political-market strategy: A research agenda. Journal of Public Affairs,10(4), 258–264.

  5. Balogun, J., & Johnson, G. (2004). Organizational restructuring and middle manager sensemaking. Academy of Management Journal,47(4), 523–549.

  6. Barney, J. (2014). How marketing scholars might help address issues in resource-based theory. Journal of the Academy of Marketing Science,42(1), 24–26.

  7. Baron, D. P. (1995). Integrated Strategy: Market and nonmarket components. California Management Review,37(2), 47–65.

  8. Boddewyn, J. J. (2016). International business–government relations research 1945–2015: Concepts, typologies, theories and methodologies. Journal of World Business,51(1), 10–22.

  9. Bonardi, J.-P., Hillman, A. J., & Keim, G. D. (2005). The Attractiveness of political markets: Implications for firm strategy. Academy of Management Review,30(2), 397–413.

  10. Bonardi, J.-P., Holburn, G., & Vanden Bergh, R. G. (2006). Nonmarket strategy performance: Evidence from U.S. electric utilities. Academy of Management Journal,49(6), 1209–1228.

  11. Bosse, D. A., Phillips, R. A., & Harrison, J. S. (2009). Stakeholders, reciprocity, and firm performance. Strategic Management Journal,30(4), 447–456.

  12. Buchanan, J. M. (1949). The pure theory of government finance: A suggested approach. Journal of Political Economy,57(6), 495–505.

  13. Buchanan, J. M., & Tullock, G. M. (1962). The calculus of consent: Logical foundations of constitutional democracy. Ann Arbor, MI: University of Michigan Press.

  14. Cavazos, D. E., & Rutherford, M. A. (2012). Bringing regulatory A\agencies into organizational studies: Broadening the lens used to examine the state. Journal of Management Inquiry,21(1), 4–12.

  15. Chambers, D., & Jennings, R. (2002). Excess returns to R&D: Intensive firms. Review of Accounting Studies,7, 133–158.

  16. Chen, K. H., Wang, C. H., Huang, S. Z., & Shen, G. C. (2016). Service innovation and new product performance: The influence of market-linking capabilities and market turbulence. International Journal of Production Economics,172, 54–64.

  17. Chen, S., Shu, Q., & Yang, Y. (2012). The influence of environmental uncertainty on the relationship between strategic change and performance. Systems Engineering,30(9), 1–8.

  18. Choi, J., & Wang, H. (2009). Stakeholder relations and the persistence of corporate financial performance. Strategic Management Journal,30(8), 895–907.

  19. Congleton, R. D. (2018). Intellectual foundations of public choice, the forest from the trees. Public Choice,175(3/4), 229–244.

  20. Cyert, R., & March, J. G. (1963). Behavioral theory of the firm. Englewood Cliffs, NJ: Prentice-Hall.

  21. Dacin, M. T. (1997). Isomorphism in context: The power and prescription of institutional norms. Academy of Management Journal,40(1), 46–81.

  22. Dahan, N. M., Hadani, M., & Schuler, D. A. (2013). The Governance challenges of corporate political activity. Business & Society,52(3), 365–387.

  23. Dai, W., & Yin, J. (2019). Antecedents of corporate entrepreneurship in private firms of China: A nonmarket strategy perspective. Academy of Management Annual Meeting Proceedings,2019(1), 1–1.

  24. Davis, E. B., Kee, J., & Newcomer, K. (2010). Strategic transformation process: Toward purpose, people, process and power. Organization Management Journal,7(1), 66–80.

  25. Deng, X., Tian, Z., & Abrar, M. (2010). The corporate political strategy and its integration with market strategy in transitional China. Journal of Public Affairs,10(4), 372–382.

  26. Dess, G. G., & Davis, P. S. (1984). Porter's (1980) Generic strategies as determinants of strategic group membership and organizational performance. Academy of Management Journal,27(3), 467–488.

  27. Du, Z., & Zhang, C. (2013). Political capitals of entrepreneurs and business performance: Agency effect of non-market strategies. Paper presented at the Ninth Annual Conference on Soft Science in China, Beijing.

  28. Eaton, S., & Kostka, G. (2017). Central protectionism in China: The “Central SOE Problem” in environmental governance. China Quarterly,231, 685–704.

  29. Fralich, R., & Fan, H. (2018). Legislative political connections and CEO compensation in China. Asian Business & Management,17(2), 112–139.

  30. Froese, F. J., Sutherland, D., Lee, J. Y., Liu, Y., & Pan, Y. (2019). Challenges for foreign companies in China: Implications for research and practice. Asian Business & Management,18(4), 249–262.

  31. Frynas, J. G., Child, J., & Tarba, S. Y. (2017). Non-market Social and Political Strategies – New Integrative Approaches and Interdisciplinary Borrowings. British Journal of Management,28(4), 559–574.

  32. Frynas, J. G., Mellahi, K., & Pigman, G. A. (2006). First mover advantages in international business and firm-specific political resources. Strategic Management Journal,27(4), 321–345.

  33. Fu, Y., & Chen, Z. (2016). A quantitattive analysis of the literature on domestic enterprises’ political behavior. Shandong Social Sciences,3(1), 124–131.

  34. Gilli, M., Li, Y., & Qian, J. (2018). Logrolling under fragmented authoritarianism: Theory and evidence from China. Public Choice,175(1/2), 197–214.

  35. Glynn, M. A., & Abzug, R. (2002). Institutionalizing identity: Symbolic isomorphism and organizational names. Academy of Management Journal,45(1), 267–280.

  36. Grier, K. B., & Tullock, G. M. (1989). An empirical analysis of cross-national economic growth, 1951–1980. Journal of Monetary Economics,24(2), 259–276.

  37. Guerra Pérez, S., Bona Sánchez, C., & Santana Martín, D. J. (2015). Politically connected firms in Spain. BRQ Business Research Quarterly,18(4), 230–245.

  38. Hadani, M., Bonardi, J.-P., & Dahan, N. M. (2017). Corporate political activity, public policy uncertainty, and firm outcomes: A meta-analysis. Strategic Organization,15(3), 338–366.

  39. Hadani, M., Dahan, N. M., & Doh, J. P. (2015). The CEO as chief political officer: Managerial discretion and corporate political activity. Journal of Business Research,68(11), 2330–2337.

  40. Hadani, M., & Schuler, D. A. (2013). In search of El Dorado: The elusive financial returns on corporate political investments. Strategic Management Journal,34(2), 165–181.

  41. Hair, J. F., Sarstedt, M., Pieper, T. M., & Ringle, C. M. (2012). The use of partial least squares structural equation modeling in strategic management research: A review of past practices and recommendations for future applications. Long Range Planning,45(5–6), 320.

  42. Harris, P. J., & Mongiello, M. (2001). Key performance indicators in European hotel properties: General managers' choices and company profiles. International Journal of Contemporary Hospitality Management,13(3), 120–127.

  43. Harrison, J. S., Bosse, D. A., & Phillips, R. A. (2010). Managing for stakeholders, stakeholder utility functions, and competitive advantage. Strategic Management Journal,31(1), 58–74.

  44. Harrison, J. S., & Wicks, A. C. (2013). Stakeholder theory, value, and firm performance. Business Ethics Quarterly,23(1), 97–124.

  45. He, Q., Tian, Z., & Chen, Y. (2008). Relationship among environmental uncertainty, top manager’s social capital and firm performance: An empirical examination. Chinese Journal of Management,5(3), 423–429.

  46. He, Y., Tian, Z., & Chen, Y. (2007). Performance implications of nonmarket strategy in China. Asia Pacific Journal of Management,24(2), 151–169.

  47. Henisz, W. J. (2000). The institutional environment for economic growth. Economics & Politics,12(1), 1–31.

  48. Henisz, W. J., & Zelner, B. A. (2012). Strategy and competition in the market and nonmarket arenas. Academy of Management Perspectives,26(3), 40–51.

  49. 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.

  50. Hillman, A. J., & Keim, G. D. (2001). Shareholder value, stakeholder management, and social issues: What’s the bottom line? Strategic Management Journal,22(2), 125–139.

  51. Huang, X. (2017). Market strategy and nonmarket strategy: Substitution or complementation based on empirical study of Chinese enterprises. Ph.D. Thesis, Nanjing University, Nanjing, China.

  52. Hult, G. T. M., Hair, J. F., Proksch, D., Sarstedt, M., Pinkwart, A., & Ringle, C. M. (2018). Addressing endogeneity ininternational marketing applications of partial least squares structural equation modeling. Journal of International Marketing,26(3), 1–21.

  53. Iriyama, A., Kishore, R., & Talukdar, D. (2016). Playing dirty or building capability? Corruption and HR training as competitive actions to threats from informal and foreign firm rivals. Strategic Management Journal,37(10), 2152–2173.

  54. Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: Antecedents and consequences. Journal of Marketing,57(3), 53–70.

  55. Ji-Yub, K., Jerayr, H., & Finkelstein, S. (2011). When firms are desperate to grow via acquisition: The effect of growth patterns and acquisition experience on acquisition premiums. Administrative Science Quarterly,56(1), 26–60.

  56. Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard—measures that drive performance. Harvard Business Review,69(1), 71–79.

  57. Kaplan, R. S., & Norton, D. P. (1996). Linking the balanced scorecard to strategy. California Management Review,39(1), 53–79.

  58. Kaplan, R. S., & Norton, D. P. (2001). Transforming the balanced scorecard from performance measurement to strategic management: Part I. Accounting Horizons,15(1), 87–104.

  59. Kaplan, R. S., & Norton, D. P. (2004). How strategy maps frame an organization's objectives. Financial Executive,20(2), 40–45.

  60. Kingsley, A. F., Bergh, R. G. V., & Bonardi, J.-P. (2012). Political Markets and Regulatory Uncertainty: Insights and Implications for Integrated Strategy. Academy of Management Perspectives,26(3), 52–67.

  61. Kobrin, S. J. (2015). Is a global nonmarket strategy possible? Economic integration in a multipolar world order. Journal of World Business,50(2), 262–272.

  62. Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of e-Collaboration,11(4), 1–10.

  63. Kraus, S., Rigtering, J. C., Hughes, M., & Hosman, V. (2012). Entrepreneurial orientation and the business performance of SMEs: a quantitative study from the Netherlands. Review of Managerial Science,6(2), 161–182.

  64. Laitinen, E. K. (2004). Nonfinancial factors as predictors of value creation: Finnish evidence. Review of Accounting & Finance,3(3), 84–130.

  65. Lawton, T., McGuire, S., & Rajwani, T. (2013). Corporate political activity: A literature review and research agenda. International Journal of Management Reviews,15(1), 86–105.

  66. Li, P. (2011). Dissertation on entrepreneur social capital: A study of non-market strategy and firm performane. Dissertation.

  67. Liedong, T. A., Ghobadian, A., Rajwani, T., & O'Regan, N. (2015). Toward a view of complementarity: Trust and policy influence effects of corporate social responsibility and corporate political activity. Group & Organization Management,40(3), 405.

  68. Lin, Y.-H., Chen, C.-J., & Lin, B.-W. (2014). The roles of political and business ties in new ventures: Evidence from China. Asian Business & Management,13(5), 411–440.

  69. Liu, C., Maslach, D., Desai, V., & Madsen, P. (2015). The first 50 years and the next 50 years of a behavioral theory of the firm: An interview with James G. March. Journal of Management Inquiry,24(2), 149–155.

  70. Liu, T.-C., & Chen, Y.-J. (2015). Strategy orientation, product innovativeness, and new product performance. Journal of Management and Organization,21(1), 2–16.

  71. Luo, Y., & Zhao, H. (2004). Corporate link and competitive strategy in multinational enterprises: A perspective from subsidiaries seeking host market penetration. Journal of International Management,10(1), 77.

  72. Macher, J. T., & Mayo, J. W. (2015). Influencing public policymaking: Firm-, industry-, and country-level determinants. Strategic Management Journal,36(13), 2021–2038.

  73. Madanoglu, M., Okumus, F., & Avci, U. (2014). Building a case against strategic equifinality. Management Decision,52(6), 1174–1193.

  74. Marquis, C., Glynn, M. A., & Davis, G. F. (2007). Community isomorphism and corporate social action. Academy of Management Review,32(3), 925–945.

  75. Mellahi, K., Frynas, J. G., Sun, P., & Siegel, D. (2016). A Review of the nonmarket strategy literature: Toward a multi-theoretical integration. Journal of Management,42(1), 143–173.

  76. Miller, D. (1988). Relating Porter's business strategies to environment and structure: Analysis and performance implications. Academy of Management Journal,31(2), 280–308.

  77. Morsing, M., & Roepstorff, A. (2015). CSR as corporate political activity: Observations on IKEA's CSR identify image dynamics. Journal of Business Ethics,128(2), 395–409.

  78. Murphy, K. M., & Vishny, R. W. (1993). Why is rent-seeking so costly to growth? American Economic Review,83(2), 9–14.

  79. Nayyar, P. R. (1993). On the measurement of competitive strategy: Evidence from a large multiproduct U.S. firm. Academy of Management Journal,36(6), 1652–1669.

  80. Néron, P.-Y. (2016). Rethinking the ethics of corporate political activities in a post-Citizens United era: Political equality, corporate citizenship, and market failures. Journal of Business Ethics,136(4), 715–728.

  81. Norreklit, H. (2000). The balance on the balanced scorecard - A critical analysis of some of its assumptions. Management Accounting Research,11(1), 65–88.

  82. Okhmatovskiy, I. (2010). Performance implications of ties to the government and SOEs: A political embeddedness perspective. Journal of Management Studies,47(6), 1020–1047.

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

  84. Olson, E. M., Slater, S. F., & Hult, G. T. M. (2005). The Performance implications of fit among business strategy, marketing organization structure, and strategic behavior. Journal of Marketing,69(3), 49–65.

  85. Parnell, J. A. (2015). Strategic political emphasis, strategic capabilities and uncertainty. Journal of Strategy and Management,8(1), 41–63.

  86. Parnell, J. A. (2018). Nonmarket and market strategies, strategic uncertainty and strategic capabilities: Evidence from the USA. Management Research Review,41(2), 252–274.

  87. Parnell, J. A., & Brady, M. (2019). Capability bundles underpinning market and nonmarket strategy and performance: Evidence from the United Kingdom. British Journal of Management,12(1), 153–172.

  88. Parnell, J. A., Lester, D. L., Zhang, L., & Köseoglu, M. A. (2012). How environmental uncertainty affects the link between business strategy and performance in SMEs. Management Decision,50(4), 546–568.

  89. Parnell, J. A., O'Regan, N., & Ghobadian, A. (2006). Measuring performance in competitive strategy research. International Journal of Management & Decision Making,7(4), 408–417.

  90. Pei, S., Mellahi, K., & Wright, M. (2012). The contingent value of corporate political ties. Academy of Management Perspectives,26(3), 68–82.

  91. Pfeffer, J., & Salancik, G. R. (2003). The external control of organization: A resource dependence perspective. Social Science Electronic Publishing,23(2), 122–133.

  92. Phillips, P. A. (1999). Hotel performance and competitive advantage: A contingency approach. International Journal of Contemporary Hospitality Management,11(7), 359–365.

  93. Phillips, P. A., & Moutinho, L. (1999). Measuring strategic planning effectiveness in hotels. International Journal of Contemporary Hospitality Management,11(7), 349–358.

  94. Qian, L., Yang, P., & Li, Y. (2016). Does guanxi in China always produce value? The contingency effects of contract enforcement and market turbulence. Journal of Business & Industrial Marketing,31(7), 861–876.

  95. Raes, A. M. L., Heijltjes, M. G., Glunk, U., & Roe, R. A. (2011). The interface of the top management team and middle managers: A process model. Academy of Management Review,36(1), 102–126.

  96. Rowley, C., & Andrews, T. G. (2017). Business and management corruption in the Asia Pacific: Corrupting and corruptors in and around organizations. Asia Pacific Business Review,23(4), 621–624.

  97. Sarstedt, M., Ringle, C. M., Cheah, J.-H., Ting, H., Moisescu, O. I., & Radomir, L. (2019). Structural model robustness checks in PLS-SEM. Tourism Economics.

  98. Scherer, A. G. (2017). Theory assessment and agenda setting in political CSR: A critical theory perspective. International Journal of Management Reviews,19, 1–24.

  99. Scherer, A. G., & Palazzo, G. (2011). The New political role of business in a globalized world: A review of a new perspective on csr and its implications for the firm, governance, and democracy. Journal of Management Studies,48(4), 899–931.

  100. Scherer, A. G., Palazzo, G., & Baumann, D. (2006). Global rules and private actors: Toward a new role of the transnational corporation in global governance. Business Ethics Quarterly,16(4), 505–532.

  101. Scherer, A. G., Rasche, A., Palazzo, G., & Spicer, A. (2016). Managing for political corporate social responsibility: New challenges and directions for PCSR 2.0. Journal of Management Studies,53(3), 273–298.

  102. Schneider, A., & Scherer, A. G. (2016). Government beyond the shadow of hierarchy - The case of the CSR policies of the European Union. Academy of Management Annual Meeting Proceedings.

  103. Sheng, S., Zhou, K. Z., & Li, J. J. (2011). The effects of business and political ties on firm performance: Evidence from China. Journal of Marketing,75(1), 1–15.

  104. Shirodkar, V., Konara, P., & McGuire, S. (2017). Home-institutional imprinting and lobbying expenditure of foreign firms: Moderating effects of experience and technological intensity. British Journal of Management,28(4), 589–608.

  105. Singer, A. E. (2013). Corporate political activity, social responsibility, and competitive strategy: An integrative model. Business Ethics,22(3), 308–324.

  106. Statistica. (2018). China: Share of exports in gross domestic product (GDP) from 2007 to 2017. Retrieved from

  107. Sun, H., & Wang, H. (2017). Government subsidies, R&D investment and enterprise innovation performance: An empirical study of high-tech enterprises in GEM. Scientific Management Research,12, 111–116.

  108. Sun, P., Mellahi, K., & Wright, M. (2012). The contingent value of corporate political ties. Academy of Management Perspectives,26(3), 68–82.

  109. Tian, L., & Chen, T. (2015). Internal control, social responsibility and corporate performance. Journal of Chongqing University,21(2), 75–81.

  110. Tsai, K.-H., & Yang, S.-Y. (2013). Firm innovativeness and business performance: The joint moderating effects of market turbulence and competition. Industrial Marketing Management,42(8), 1279–1294.

  111. Unsal, O., Hassan, M. K., & Zirek, D. (2016). Corporate lobbying, CEO political ideology and firm performance. Journal of Corporate Finance,38, 126–149.

  112. Valente, M., & Crane, A. (2010). Public responsibility and private enterprise in developing countries. California Management Review,52(3), 52–78.

  113. van Kranenburg, H., & Voinea, C. L. (2017). Nonmarket strategies predictors for foreign firms. Scandinavian Journal of Management,33(2), 82–92.

  114. Venkatraman, N., & Ramanujam, V. (1986). Measurement of business performance in strategy research: A comparison of approaches. Academy of Management Review,11(4), 801–814.

  115. Wang, G., Dou, W., Zhu, W., & Zhou, N. (2015). The effects of firm capabilities on external collaboration and performance: The moderating role of market turbulence. Journal of Business Research,68(9), 1928–1936.

  116. Wang, Y. (2016). A study on the influence of entrepreneurs’ social capital for enterprise performance—based on the nonmarket strategy. Ph.D. Thesis, East China Jiaotong University, Nanchang.

  117. Wei, W. (2008). The interaction of non-market and market resource strategy and performance. China Industrial Economics,240(3), 23–31.

  118. Wei, W. (2009). The Influence of nonmarket and market actions and their competitive characteristics on firm performance. Nankai Business Review,12(2), 37–51.

  119. Wei, W., Zhao, X., Li, M., & Warner, M. (2016). Integrating nonmarket and market resources, strategy and performance in Chinese enterprises: a review of the field and a resource-based empirical study. Asia Pacific Business Review,22(2), 220–237.

  120. Wickert, C. (2016). “Political” corporate social responsibility in small- and medium-sized enterprises. Business & Society,55(6), 792–824.

  121. Wilden, R., & Gudergan, S. P. (2015). The impact of dynamic capabilities on operational marketing and technological capabilities: Investigating the role of environmental turbulence. Journal of the Academy of Marketing Science,43(2), 181–199.

  122. Wood, G., & Frynas, J. G. (2006). The institutional basis of economic failure: Anatomy of the segmented business system. Socio-Economic Review,4(2), 239–271.

  123. Wrona, T., & Sinzig, C. (2018). Nonmarket strategy research: Systematic literature review and future directions. Zeitschrift Für Betriebswirtschaft,88(2), 253–317.

  124. Xie, P., He, X., & Yan, H. (2010). Nonmarket strategy theoretical system of enterprises and the internal leading system. Chinese Journal of Management,2, 7.

  125. Xu, D., Li, G., Sun, L., & Zhao, L. (2012). The Relationships among environmental uncertainty, supply chain integration and firm performance. Scientific Management Research,33(12), 42–51.

  126. Yin, J., Singhapakdi, A., & Du, Y. (2016). Causes and moderators of corporate social responsibility in China: The influence of personal values and institutional logics. Asian Business & Management,15(3), 226–254.

  127. Zahra, S. A., & Covin, J. G. (1993). Business strategy, technology policy and firm performance. Strategic Management Journal,14(6), 451–478.

  128. Zhai, S., Zhang, J., Yang, J. Y., & Cao, X. (2015). Environmental uncertainty, strategic emerging enterprise business model and innovation investment performance. Science & Technology Progress and Policy,32(18), 68–74.

  129. Zhang, C., & Li, S. (2012). The influence of firm scale and high-level cognition on nonmarket strategy based on Vanke and Agile’s case study. Value Engineering,13(1), 105–116.

  130. Zhang, Y. (2012). China's evolution toward an authoritarian market economy—a predator–prey evolutionary model with intelligent design. Public Choice,151(1/2), 271–287.

Download references


This paper was funded in part by a grant from the Charles Koch Foundation.

Author information

Correspondence to Long Zhang.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Zhang, L., Parnell, J.A. & Xiong, C. Market and Nonmarket Strategies (NMS) in China: Performance Payoffs in Turbulent Environments. Asian Bus Manage (2020).

Download citation


  • China
  • Nonmarket
  • Firm performance
  • Strategy
  • Turbulence