The Organization of Non-market Strategy

The purpose of this paper is to explore how firms organize to engage in non-market strategy. To achieve this end, we explore the organization of non-market strategy via a formal model of the firm. The model is motivated by a qualitative study of the organization of non-market strategy of 25 large, U.S. firms. We found that firms either integrate non-market strategy activities throughout the firm or create stand-alone business units that specialize in non-market strategy activities. We find that the advantage of integration over specialization is U-shaped in the importance of non-market strategy to the firm's market strategy. We identify several other factors that predict the advantage (and disadvantage) of integration over specialization. The value of this paper is that it is (to the best of our knowledge) the first to identify the factors that should cause a firm to either integrate or specialize the organization of its non-market strategy. It also develops an original typology of the organization of non-market strategy