Implementing firm strategy in the informal economy

The activities of firms operating in the informal economy are considered technically illegal and yet remain legitimate to large groups in society. Strategy implementation in the informal economy diverges significantly from conventional approaches. Therefore, these firms strategically navigate legal boundaries to subsist and grow. This paper examines firms’ unique approaches to implementing their strategies in the informal economy. We distinguish between general informal economy activities (i.e., primarily subsistence-oriented activities that engage in tax avoidance, skirt business license and registration requirements, etc.) and transformative informal economy activities (e.g., firms like Uber, Airbnb, and Aereo leveraging technological advancements that have outpaced changes in laws and regulations). We contrast the strategy implementation of general versus transformative informal economy activities. We describe how firms work to conceal or openly challenge regulations and leverage relational mechanisms for resource acquisition and execution.