Original Research

Size matters: The market–non-market strategy nexus and firm performance in South Africa

John A. Parnell, Michael L. Troilo, Thomas Dobbelstein
South African Journal of Business Management | Vol 55, No 1 | a4273 | DOI: https://doi.org/10.4102/sajbm.v55i1.4273 | © 2024 John A. Parnell, Michael L. Troilo, Thomas Dobbelstein | This work is licensed under CC Attribution 4.0
Submitted: 26 September 2023 | Published: 22 February 2024

About the author(s)

John A. Parnell, Department of Management and Marketing, Sanders College of Business and Technology, University of North Alabama, Florence, United States
Michael L. Troilo, Department of Marketing and International Business, Collins College of Business, The University of Tulsa, Tulsa, United States
Thomas Dobbelstein, Faculty of Management Sciences, Durban University of Technology, Durban, South Africa; and Department of International Business, Faculty of Business Baden-Württemberg Cooperative State University, Ravensburg, Germany

Abstract

Purpose: This study seeks to discover how a firm’s size and its use of both market and non-market strategies (MS and NMS) impact firm performance in South Africa.

Design/methodology/approach: We used the Prolific platform to gather survey data from 247 executives and managers across the country representing a variety of firm sizes and industries. Cronbach’s alpha, analysis of variance (ANOVA) and structural equation modelling via partial least squares (PLS-SEM) were then employed to test constructs and hypotheses. Configuration theory and social exchange theory (SET) are the conceptual foundations for this study.

Findings/results: Firm size is a driver of the market strategy of differentiation, but not cost leadership. Larger firms are also more likely to pursue both political and social NMS. Differentiation and social NMS positively impact firm performance, but cost leadership and political NMS do not.

Practical implications: Managers should emphasise differentiating their products and services rather than being a low-cost provider. When considering various non-market strategies, they should emphasise social NMS. Although large firms are more likely than small firms to pursue political NMS, they do not appear to accrue any benefit.

Originality/value: This study fills gaps in the strategy-performance literature by directly linking firm size to strategic choices and by analysing the effects of different types of MS and NMS on firm performance. As such, it is valuable to both academics and practitioners. This study also advances our understanding of MS and NMS in South Africa.


Keywords

Non-market strategy; market strategy; business strategy; Africa; South Africa; firm size; firm performance; SmartPLS.

JEL Codes

M14: Corporate Culture • Diversity • Social Responsibility; M16: International Business Administration; M19: Other

Sustainable Development Goal

Goal 9: Industry, innovation and infrastructure

Metrics

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