Nonmarket environments can be defined as a set of concerns that cannot be managed or controlled through market-based interactions by either an individual or organization (Funk " Hirschman, 2017). Nonmarket issue lifecycle means the stage of development of a matter and its effects on an organization and its management. This progression of the issue can be understood in forms of a life cycle that involves five steps namely; issue identification, interest group formation, legislation, administration and finally the enforcement (Funk " Hirschman, 2017). Progression of an issue from the first stage to the last one have unique impacts on a firm and its management.
According to Baron (2013), the cycle begins with an issue identification which is the unit of analysis in the nonmarket environment. At this phase, the issue impact on the organization is almost negligible. The emergence of the issue will then result in the formation of the interests group whose objective is to try and provide a solution (Baron,2013). The organization's influence during formation of interested groups is still substantial and can shape the ideas of the firm's stakeholders. Afterwards, the interested groups formed might champion for a resolution through legislation and consequently administration which is the fourth phase of the cycle (Baron,2013). After passing through the four stages, the final step is the enforcement of nonmarket issue. Sometimes, not all the issues will go through the entire cycle (Funk " Hirschman, 2017). Moreover, as the issue goes through these phases, the firm’s impact tends to decline gradually.
Conclusively, nonmarket environment over time has grown significantly in its complexity as well as its importance and calls for more managerial attention. Nonmarket issues affect firm's development and strategies that an organization applies to the business environment and sustainability (Baron,2013). Efficient management of the nonmarket environment is a necessity in improving organization's performance.
References
Baron, D. P. (2013). Business and its environment. Boston: Pearson.
Funk, R. J., " Hirschman, D. (2017). Beyond nonmarket strategy: Market actions as corporate political activity. Academy of Management Review, 42(1), 32-52.
