Drivers and Consequences of Non-Market Decision-Making: Evidence from Global Corporate Disaster Giving
The goal of this dissertation is to contribute to the understanding of the determinants of non-market strategy and its consequences for the firm and external stakeholders by studying the provision of collective goods in the aftermath of natural disasters. I use an integrative theoretical framework whose cornerstone is the strength of a firm's economic connection with a national market, or economic reliance. I build this construct by drawing on insights from the theory of clubs. In the first chapter, I argue that firms consider the relative importance of a national market’s collective goods for their own operation when they decide to engage in its provision—i.e., to behave pro-socially. Using a model of economic reliance that considers the market standing of the firm, market concentration, and the country’s institutional development, I empirically show that accounting for economic reliance results in a more accurate prediction of corporate pro-social behavior than widely accepted arguments in the extant literature. In the second chapter, I study the performance consequences of disaster giving by complementing the effect of economic reliance with insights from the literature on sensemaking. I argue that the firm’s financial reward or loss associated with non-market decisions made under high informational and time constraints are often socially constructed and not strongly associated with the physical characteristics of the firm, its donation, or stakeholder needs. This occurs because firms and external stakeholders follow different prominent and easy to collect signals not associated with the focal decision (i.e., cognitive referents) to decide about the contextual appropriateness of organizational decisions and spur action. While stakeholders rely on pre-disaster media reputation, firms focus on financial performance. In the concluding chapter, I study the effect of corporate disaster giving on the magnitude and speed of national recovery from natural disasters. I draw on the dynamic capabilities literature to argue that firms economically reliant to the affected country are better-equipped than other entities to sense areas of need following a disaster, seize response opportunities, and reconfigure resources for efficient relief efforts. The evidence shows that nations benefit greatly from the intervention of economically-reliant firms when disasters strike.
Ballesteros, Luis, "Drivers and Consequences of Non-Market Decision-Making: Evidence from Global Corporate Disaster Giving" (2017). Dissertations available from ProQuest. AAI10272000.