External Influences

The set of external influences impacting firm strategy and performance are numerous and diverse. The reading lists in this section reflect that diversity. The first, External Stakeholder Influence by Witold Henisz takes a broad sweep across these issues looking at how various stakeholders in the institutional environment influence the organization and performance of individual firms. Henisz suggests that the theoretical modeling and empirical analysis of this strategic game of external stakeholder influence is among the most nascent domains in the field of strategy but also, arguably, among the domains with highest potential payoff. Henisz traces the practical origins of this field of study and examines its’ roots in international business, political economy, sociology and strategic communication and highlights recent and ongoing efforts to integrate these diverse perspectives to develop a “strategic decisionmaking process for influence strategy.”

In Public and Private Political Strategy , John De Figueiredo examines some of the same external stakeholder influence activities, but places it in the context of the literature on “non-market strategy,” whereby firms attempt to gain or protect competitive advantage through influencing government policy or interacting with other non-government actors such as the media and activists, domestically or in the international arena.

Juan Alcacer and Joanne Oxley take on a more narrowly focused set of issues in Geography and Agglomeration , exploring the dynamic process underpinning the observed phenomenon that economic activity tends to concentrate geographically, generating localized industry “clusters.” They describe how strategy researchers have built on fundamental insights from economic geography to develop models that recognize heterogeneity in firms’ incentives to agglomerate, and to explore how organizational and social structures may undermine or substitute for agglomeration benefits based on firm location. Reflecting the importance of agglomeration in knowledge-intensive industries, important links can be drawn with themes in Innovation and Organizational Learning ; As a dynamic process, agglomeration is also closely related to issues of Industry Evolution and Sustainability .