Business Ethics: A European Review | 2019
Balancing social and political strategies in emerging markets: Evidence from India
Abstract
This article explores the substitution and complementary effects between political and social \nstrategies on firm performance in the context of an emerging market (EM). Using in-depth, \nhistorical case-study approach, the article investigates how companies integrate political and \nsocial resources in this market. Corporate performance includes traditional measures such as \naccounting performance and nonfinancial measures like the ease of doing business. The study \nfinds that social strategies are stronger enablers of firm long-term performance than political \nstrategies. The latter have a short-term impact on performance, but their success over time is \nlimited. The main drawback of reliance on political resources in EMs is the lack of political \nstability, fragmented polity, and weak political coalitions. We identify rather limited evidence \nof firms using these two strategies as complements. Thus, we suggest that firms should \nemploy both these strategies in the EM.