Strategy integration, sustainable drivers of firm internationalization performance—Moderated by environmental uncertainty and firm capabilities

Abstract The global environmental uncertainty and the need for an organization to maximize profit and satisfy the interest of wider nonmarket groups/stakeholders in the host market propel and reinforce the need for strategic integration to achieve sustainable internationalization performance. The interest of this article is to examine the relative impact of market, nonmarket strategy, and strategy integration on the performance of medium and large organizations in Portugal. Furthermore, environmental uncertainty and firm capabilities were used as moderation to evaluate the performance implication of these strategy configurations on firm market advantage in the host country. Given the need to examine the relationship between the latent and measured variables in this study, structural equation models were used to test the stated hypotheses, while confirmatory factor analyses were used to assess the fitness of our model. Our findings revealed that strategy integration provides a more sustainable competitive performance than either market or nonmarket strategy when used separately, especially in highly regulated and standardized business contexts such as Portugal. Furthermore, our findings show that organization needs to design market-oriented strategies and select the types of nonmarket practices (lobbying, campaign contributions, etc.) that best fit and align with their overall corporate objectives without neglecting the host market environmental culture. Research on market and nonmarket integrations have long been overdue given its extensive proposition to firm sustainable performance in a foreign country. Our research shed light on the importance of strategy integration to combat the ever-changing dynamism of the business environment and the negative sentiment surrounding globalization and how a firm can successfully compete in an uncertain, highly regulated, and standardized market context.