Research On The Relationship Between Non - Market Resources, Strategic Capability And Firm Performance

Resources and capacity are the two vital variables in explaining business performance differences, while uncertainty of the circumstance influences the relations between performance and resources along with capacity significantly. The continuous dramatic turmoil in China’s economic transition provides a typical context to the researches of this nature.How to improve performance, obtain and maintain competitive advantages for businesses is a core subject in strategic management researches, on which abundant theories are available. Among those theories,"Resource-based Theories" argues that businesses are constituted of tangible material resources and intangible rule resources. To enhance business performance and competitive edge, on one hand, it relies on market resources such as product and service, internal organizational structure, supply chain, distribution channel and allied network; on the other, it depends on non-market resources including effective interaction with the government, media, the public and other interest groups and etc. Non-market resources present features of utility, scarcity, inimitability and irreparability. The classic structure of "resources-strategy-performance" is applied in researches at the market level but is rarely applied in researches at the non-market level. Therefore, this structure can be a research framework in the theoretical and practical sense.From the perspective of capacity, organizational Capacity Theory indicates that the capacity embedded in these resources is essential to businesses. The strategic capacity refers to the dynamic ability of a business to use resources, especially in reorganizing, restructuring, obtaining and giving up resources to match or even initiate market changes and to improve business performances. The dynamic capacity is the organizational innovative ability to match with the environment based on dynamic practices, which reflects and realizes current and potential capacities of businesses. It is a worthy subject to study approaches to transform resources to performance through reorganization of resources and development of strategy.Environment-strategy-performance research is a classic pattern from the perspective of contextual uncertainty and business performances, revealing the links between organizational environment and organizational strategy as well as performances. External environment is a combination of market and non-market context, so contextual uncertainty is generated from both hostility of market environment and complexity of non-market environment. As a result, non-market performance is considered as a crucial supplement to market and financial performances for overall performance measurements.In this study, the thesis is to probe how non-market resources of businesses can affect business performances in various contexts. This study holds that non-market resources at both organizational and senior managerial levels jointly influence the enhancement of strategic capacity and further impact improvement in market and non-market performances, while two non-market resources influence performances in various manners. Based on this, these study targets businesses and middle and senior managers in businesses as subjects via three research methods of Normative, in-depth interview and quantitative verification. First of all, through diversified discussion and relevant analysis, effort is made to discover influences of non-market resources at organizational and senior managerial levels on market and non-market performances of businesses; and to probe the adjective effects of environmental variables including contextual hostility and complexity to the link between non-market resources and business performances. Secondly, in the structural equation model, study is done to discuss the role of reorganizing resources and strategic development capacities as agents between non-market resources at organizational and senior managerial level and market and non-market performances of businesses. This study discovers that (1) Non-market resources at organizational and senior managerial level have positive influence on performances of various types of businesses.(2) Non-market resources at organizational and senior managerial level have significant positive influences on strategic capacity.(3) Strategic capacity has significant positive influence on various businesses.(4) Capacities of strategic implementation and reorganizing resources can be agents in various non-market resources and businesses.(5) Environmental features can be different with varied balance of hostility and complexity, in which non-market resources at organizational and senior managerial level can influence business performances with differentiation.Compared with past literatures, innovation and contribution of this study may include:(1) this research involves many in-depth interviews with businesses, government and associations as large samples, to answer following questions in a comprehensive manner:how do businesses obtain non-market resources? How do non-market resources influences performances of businesses? And how do government, associations and businesses understand non-market behaviours? Besides, the in-depth interviews are helpful in designing the questionnaire and implementing the survey;(2) non-market resources of businesses are categorized into those at organizational level and senior managerial level, according to resource-based theory, social network theory and analysis of explorative factors;(3)business performances are categorized into market and non-market performances based on growth theory and analysis of explorative factors;(4) two scopes of strategic capacity are defined and the agent role of strategic capacity between non-market capitals and performances of businesses;(5) different effect of non-market capitals on business performances are discussed under four environments featuring various balance of complexity and hostility.The practical significance of this research lies in two tiers. To start with, by understanding non-market resources at different levels can influence business performances in various environments, businesses can get a strategic guidance in choosing between organizational and managerial non-market resources to influence their own performances in accordance with the environmental changes. In addition, the issue of non-market performances as discussed in this study is a crucial component in business performances. Therefore, in the practice, businesses should obtain sustainable market advantages through improving non-market resources at organizational level and hence enhancing capacity to handle the government, associations, the public and other stakeholders, which can influence market strategy and performances to some extent.