Document Type : Original Article
Authors
1
PhD Candidate in Finance, Majoring in Financial Engineering and Risk Management, Kish International Campus, University of Tehran, Tehran, Iran.
2
tehran
3
Associate Professor, Faculty of Economics, Kharazmi University, Tehran, Iran.
Abstract
The primary objective of this paper is to empirically investigate the interrelationships among social and non-market strategy, market strategy, organizational resilience, organizational commitment, corporate reputation, shareholder performance, and financial performance within small and medium-sized enterprises (SMEs) situated in the Shamsabad Industrial Town, Tehran. To this end, data derived from 433 validated questionnaires were analyzed utilizing partial least squares structural equation modeling (PLS-SEM).
The most pivotal finding of this research is that social and non-market strategy exerts a positive and significant effect on market strategy, organizational resilience, organizational commitment, corporate reputation, and shareholder performance; however, its direct influence on corporate financial performance is negative and statistically significant. This finding bears considerable managerial significance, as it indicates that the implementation of social and non-market strategies imposes immediate costs upon the firm—such as social responsibility expenditures, maintaining external institutional relations, stakeholder engagement, and legitimizing actions—which, while generating no direct financial returns in the short term, directly erode profitability.
Consequently, the genuine value of social and non-market strategies lies not in their immediate financial payoffs, but rather in their capacity to cultivate organizational capabilities, foster intangible assets, and secure sustainable competitive advantage, which ultimately translate into enhanced shareholder and financial performance. In sum, while social and non-market strategy exhibits a direct negative effect on financial performance, its total effect is positive; this is attributable to the fact that the initial outlays are progressively offset by superior reputation, heightened resilience, strengthened organizational commitment, refined market strategy, and elevated shareholder performance.
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