Buffering activities

Bloody brilliant article by Mellahi et al.!!

Consistent with the literature on organizational boundary spanning (Fennell & Alexander, 1987; Meznar & Nigh, 1995), we group the mechanisms related to the external nonmarket environments into the buffering and bridging activities, which are not mutually exclusive. Firms bridge with the external environment by seeking “to adapt organizational activities so that they conform with external expectations” (Meznar & Nigh, 1995: 976). In contrast, a firm resorts to a buffering strategy to protect itself from the external environment. To this end, the firm is “trying to keep the environment from interfering with internal operations and trying to influence the external environment” (Meznar and Nigh, 1995: 976; italics added). This classification is widely used in the nonmarket literature (Dieleman & Boddewyn, 2012; Zheng et al., 2015).
(Mellahi et al. 2016:150)


Buffering mechanisms involve both defensive and proactive activities on the part of focal organizations to gain influence and control over their external nonmarket environments. These include lobbying, campaign contributions, public relations campaigns, and building personal and organizational ties to sociopolitical institutions and actors (Sun et al., 2012). Our literature review suggests that scholars draw primarily on RBV and RDT to examine the buffering mechanisms. From an RBV lens, defensive strategies can help companies establish a strategic advantage through firm-specific environmental scanning and predictive capabilities (Aragón-Correa & Sharma, 2003), while proactive strategies can provide a firm with an advantage by utilizing firm-specific resources and capabilities to shape the nonmarket environment to its advantage by, for instance, forestalling or manipulating additional regulation and raising rivals’ costs (McWilliams et al., 2002; Oliver & Holzinger, 2008).
(Mellahi et al. 2016:155)


As another example, Zheng and colleagues (2015) examined how the buffering roles of political ties predicted by RDT might vary in accordance with firm-level heterogeneity, such as prior performance and types of ties, underscored by the RBV logic.
(Mellahi et al. 2016:157)


For example, political and regulatory shocks and evolutionary changes can erode the effectiveness of the buffering mechanisms (J. Siegel, 2007; Sun et al., 2010), powerful politicians and stakeholders may appropriate the rents once created from the buffering mechanisms (Dieleman & Boddewyn, 2012), and agency considerations, rather than organizational-rent-generation motives, may drive the buffering activities (Hadani & Schuler, 2013). In short, we still have very limited knowledge about how the process in which the rent-generating buffering activities predicted by RBV and RDT interacts with subsequent rent appropriation to impact on performance across different institutional contexts (Coff, 1999; Sun et al., in press).
(Mellahi et al. 2016:163)

Mellahi, K. Frynas, J. Sun, P. and Siegel, D. 2016. A Review of Nonmarket Strategy Literature: Toward a Multi-Theoretical Integration. Journal of Management, Vol. 42, (1), pp.143-713.

The citations are

Dieleman, M., & Boddewyn, J. J. 2012. Using organization structure to buffer political ties in emerging markets: A case study. Organization Studies, 33: 71-95.

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

Sun, P., Hu, H. W., & Hillman, A. J. in press. The dark side of board political capital: Enabling blockholder rent appropriation. Academy of Management Journal.

Zheng, W., Singh, K., & Mitchell, W. 2015. Buffering and enabling: The impact of interlocking political ties on firm survival and sales growth. Strategic Management Journal, 36: 1615-1636.


see also bridging activities

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