Strategic Management and Organizational Transformation in Emerging Economies: Leadership, Innovation, and Institutional Performance

Abstract

Organizations in emerging economies pursue strategy under conditions that differ in kind, and not merely in degree, from those assumed in mainstream strategic management theory: formal market-supporting institutions are incomplete, informal institutions carry much of the coordinating load, and the rules themselves are in transition. This article reviews scholarship published up to 2019 on how strategic management, leadership and innovation combine to produce organizational transformation and institutional performance in such settings. Drawing on the institution-based view, the resource-based and dynamic capabilities perspectives, upper echelons and transformational leadership theory, and research on public-sector capability, the review advances three arguments. First, strategy in emerging economies is best understood as the joint management of market position, internal capability and institutional context. Second, leadership is the mechanism through which institutional constraints are interpreted, negotiated and occasionally reshaped, which makes it the pivotal antecedent of transformation. Third, innovation in these economies is predominantly capability-building, frugal and managerial rather than frontier-technological, and its performance effects depend on complementary management practices and governance. The article integrates these arguments in a conceptual framework that links institutional context, strategic leadership, innovation capability, transformation and multidimensional performance, states four propositions for empirical testing, and sets out implications for executives, policymakers and researchers.