Hostname: page-component-586b7cd67f-tf8b9 Total loading time: 0 Render date: 2024-12-07T13:00:20.089Z Has data issue: false hasContentIssue false
  • English
  • Français

The multinational firm and geopolitics: Europe, Russian energy, and power

Published online by Cambridge University Press:  20 January 2017

Rawi Abdelal
Get access Rights & Permissions [Opens in a new window]

Abstract

Multinational firms unavoidably exert influence over politics through power that is generated by both structure and process. While both political economy and management scholars address international firms, neither field has an adequate understanding of the reciprocal relationship between multinational firms and geopolitical systems. The links between multinational firms form a distinct type of international system for the private sector – one that is simultaneously enmeshed in geopolitics and international markets even as it is also autonomous from them. The scholarly literature on the power of business in politics has demonstrated how influence derives from instrumental agency as well as structural influence, but it has taken an unnecessarily restrictive view of politics and an overly materialist theory of power. Politics are about much more than government policies. In this paper I propose an analytical framework for understanding the multinational firm as a set of relationships. I then apply one key element of that approach – the relationships among firms as a direct source of geopolitical outcomes – to the natural gas trade of Eurasia in three eras that span nearly 40 years. I conclude that the influence of business on a broader understanding of politics – and not just policies – should be central to the study of international and comparative political economy.

Type
Research articles
Information
Business and Politics , Volume 17 , Issue 3: Special Issue: Structural Power and the Study of Business: Guest Editor: Pepper D. Culpepper , October 2015 , pp. 553 - 576
Copyright
Copyright © V.K. Aggarwal 2015 and published under exclusive license to Cambridge University Press 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abdelal, Rawi. 2001. National Purpose in the World Economy: Post-Soviet States in Comparative Perspective. Ithaca, NY: Cornell University Press.Google Scholar
Abdelal, Rawi. 2013. “The Profits of Power: Commerce and Realpolitik in Eurasia.” Review of International Political Economy 20 (3): 421–456.CrossRefGoogle Scholar
Abdelal, Rawi, Tarontsi, Sogomon, and Jorov, Alexander. 2008a. Gazprom (A): Energy and Strategy in Russian History. Harvard Business School Case Study, 709–008.Google Scholar
Abdelal, Rawi, Tarontsi, Sogomon, and Jorov, Alexander. 2008b. Gazprom (B): Energy and Strategy in a New Era. Harvard Business School Case Study, 709–009.Google Scholar
Abdelal, Rawi, Tarontsi, Sogomon, and Jorov, Alexander. 2008c. Gazprom (C): The Ukrainian Crisis and its Aftermath. Harvard Business School Case Study, 709–010.Google Scholar
Abdelal, Rawi, Blyth, Mark, and Parsons, Craig. 2010. “Introduction: Constructing the International Economy.” In Constructing the International Economy, edited by Abdelal, Rawi, Blyth, Mark, and Parsons, Craig. Ithaca, NY: Cornell University Press.Google Scholar
Abdelal, Rawi, and Tarontsi, Sogomon. 2011a. Energy Security in Europe (A): Nord Stream. Harvard Business School Case Study, 711–026.Google Scholar
Abdelal, Rawi, and Tarontsi, Sogomon. 2011b. Energy Security in Europe (B): The Southern Corridor. Harvard Business School Case Study, 711–033.Google Scholar
Abdelal, Rawi, Maugeri, Leonardo, and Tarontsi, Sogomon. 2014. Europe, Russia, and the Age of Gas Revolution. Harvard Business School Case Study, 715–006.Google Scholar
Abdelal, Rawi, Çekin, Esel, and Çelik, Cigdem. 2015. Turkey and the Southern Corridor. Harvard Business School Case Study, 715–042.Google Scholar
Adamkus, Valdas, et al. 2009. An Open Letter to the Obama Administration from Central and Eastern Europe. Gazeta Wyborcza, 16 July.Google Scholar
Beckert, Jens. 1996. “What is Sociological about Economic Sociology?” Theory and Society 25 (6): 803–840.Google Scholar
Beckert, Jens. 2003. “Economic Sociology and Embeddedness: How Shall We Conceptualize Economic Action?” Journal of Economic Issues 37 (3): 769–787.Google Scholar
Bell, Stephen. 2012. “The Power of Ideas: The Ideational Shaping of the Structural Power of Business.” International Studies Quarterly 56 (4): 661–673.Google Scholar
Boddewyn, Jean J., and Brewer, Thomas L. 1994. “International-Business Political Behavior: New Theoretical Directions.” Academy of Management Review 19 (1): 119–143.Google Scholar
Brandenburger, Adam M., and Nalebuff, Barry J. 1996. Co-opetition. New York: Currency Doubleday.Google Scholar
Chandler, Alfred D. 1977. The Visible Hand: The Managerial Revolution in American Business. Cambridge, MA: Harvard University Press.Google Scholar
Chandler, Alfred D. 1992. “What is a Firm? A Historical Perspective.” European Economic Review 36 (2–3): 483–492.Google Scholar
Culpepper, Pepper D. 2011. Quiet Politics and Business Power: Corporate Control in Europe and Japan. Cambridge: Cambridge University Press.Google Scholar
Culpepper, Pepper D., & Reinke, Raphael 2014. “Structural Power and Bank Bailouts in the United Kingdom and the United States.” Politics and Society 42 (4): 427–454.Google Scholar
Cyert, Richard, and March, James. 1963. A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
Davis, Gerald F. 2005. “Firms and Environments.” In The Handbook of Economic Sociology, edited by Smelser, Neil J. and Swedberg, Richard. 2nd ed. Princeton, NJ: Princeton University Press; New York: Russell Sage Foundation.Google Scholar
DiMaggio, Paul J., and Powell, Walter W. 1983. “The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields.” American Sociological Review 48 (2): 147–260.Google Scholar
Dobbin, Frank. 2004. “The Sociological View of the Economy.” In The New Economic Sociology, edited by Dobbin, Frank. Princeton, NJ: Princeton University Press.Google Scholar
Doremus, Paul N., Keller, William W., Pauly, Louis W., and Reich, Simon. 1998. The Myth of the Global Corporation. Princeton, NJ: Princeton University Press.Google Scholar
ENI. 2013. The European Gas Market: Past, Present, and Future. White Paper.Google Scholar
Fairfield, Tasha. 2015. Private Wealth and Public Revenue. Cambridge Cambridge University Press.Google Scholar
Farrell, Henry. 2009. The Political Economy of Trust: Institutions, Interests, and Inter-Firm Cooperation in Italy and Germany. Cambridge: Cambridge University Press.Google Scholar
Forsgren, Mats. 2008. Theories of the Multinational Firm. London: Edward Elgar.Google Scholar
Ghoshal, Sumantra, and Bartlett, Christopher A. 1990. “The Multinational Corporation as an Interorganizational Network.” Academy of Management Review 15 (4): 603–625.Google Scholar
Ghoshal, Sumantra, and Eleanor Westney, D., eds. 2005. Organization Theory and the Multinational Corporation. London: Palgrave Macmillan.Google Scholar
Gilpin, Robert. 1975. US Power and the Multinational Corporation. New York: Basic.Google Scholar
Granovetter, Mark. 1985. “Economic Action and Social Structure: The Problem of Embeddedness.” American Journal of Sociology 91 (3): 481–510.Google Scholar
Guillén, Mauro F. 2013. Understanding and Managing the Multinational Firm. Wharton School of the University of Pennsylvania.Google Scholar
Gulati, Ranjay. 1998. “Alliances and Networks.” Strategic Management Journal 19 (4): 293–317.Google Scholar
Gulati, Ranjay, and Gargiulo, Martin. 1999. “Where do Interorganizational Networks Come From?” American Journal of Sociology 104 (5): 1439–1493.Google Scholar
Gulati, Ranjay, Nohria, Nitin, and Zaheer, Akbar. 2000. “Strategic Networks.” Strategic Management Journal 21 (3): 203–215.Google Scholar
Hadjikhani, Amjad, Lee, Joong-Woo, and Ghauri, Pervez N. 2008. “Network View of MNCs’ Socio-Political Behavior.” Journal of Business Research 61 (9): 912–924.Google Scholar
Haggard, Stephan. 1990. Pathways from the Periphery: The Politics of Growth in the Newly Industrializing Countries. Ithaca, NY: Cornell University Press.Google Scholar
Haggard, Stephan, Maxfield, Sylvia, and Schneider, Ben Ross. 1997. “Theories of Business and Business-State Relations.” In Business and the State in Developing Countries, edited by Maxfield, Sylvia and Schneider, Ben Ross. Ithaca, NY: Cornell University Press.Google Scholar
Hart, Oliver. 1993. Firms, Contracts, and Financial Structure. Oxford: Oxford University Press.Google Scholar
Heidenreich, Martin. 2012. “The Social Embeddedness of Multinational Companies.” Socio-Economic Review 10 (3): 549–579.Google Scholar
Herrigel, Gary. 2010. Manufacturing Possibilities: Creative Action and Industrial Recomposition in the United States, Germany, and Japan. Oxford: Oxford University Press.Google Scholar
Herriott, Scott R., Levinthal, Daniel, March, and James G. 1985. “Learning from Experience in Organizations.” American Economic Review 75 (2): 298–302.Google Scholar
Högselius, Per. 2013. Red Gas: Russia and the Origins of European Energy Dependence. New York: Palgrave Macmillan.Google Scholar
Jentleson, Bruce W. 1986. Pipeline Politics: The Complex Political Economy of East-West Energy Trade. Ithaca, NY: Cornell University Press.Google Scholar
Jones, Geoffrey. 1996. The Evolution of International Business. London: Routledge.Google Scholar
Jones, S. R. H. 1997. “Transaction Costs and the Theory of the Firm.” Business History 39 (4): 9–25.Google Scholar
Katzenstein, Peter J., ed. 1978. Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States. Madison: University of Wisconsin Press.Google Scholar
Katzenstein, Peter J., and Nelson, Stephen C. 2013. “Worlds in Collision: Uncertainty and Risk in Hard Times.” In Politics in the New Hard Times, edited by Kahler, Miles, and Lake, David A. Ithaca, NY: Cornell University Press.Google Scholar
Katzenstein, Peter J., and Nelson, Stephen C. 2014. “Uncertainty, Risk, and the Financial Crisis of 2008.” International Organization 68 (2): 361–392.Google Scholar
Knight, Frank H. 1921. Risk, Uncertainty, and Profit. New York: Houghton Mifflin.Google Scholar
Kogut, Bruce. 1988. “Joint Ventures: Theoretical and Empirical Perspectives.” Strategic Management Journal 9 (4): 319–332.Google Scholar
Komlev, Sergei. 2012. Are Oil Linked Contracts a Thing of the Past? A View from Gazprom Export. Presented at the FLAME Conference, Amsterdam, 19 April.Google Scholar
Kostova, Tatiana, Roth, Kendall, and Tina Dacin, M. 2008. “Institutional Theory in the Study of Multinational Corporations: A Critique and New Directions.” Academy of Management Review 33 (4): 994–1006.Google Scholar
Krasner, Stephen D. 1978. Defending the National Interest. Princeton, NJ: Princeton University Press.Google Scholar
Levitt, Barbara, and March, James G. 1988. “Organizational Learning.” Annual Review of Sociology 14: 319–338.Google Scholar
Lindblom, Charles E. 1977. Politics and Markets. New York: Basic.Google Scholar
March, James G. 1962. “The Business Firm as a Political Coalition.” Journal of Politics 24 (4): 662–678.Google Scholar
March, James G., and Olsen, Johan P. 1975. “The Uncertainty of the Past: Organizational Learning under Ambiguity.” European Journal of Political Research 3 (2): 147–171.Google Scholar
March, James G., and Shapira, Zur. 1987. “Managerial Perspectives on Risk and Risk-Taking.” Management Science 33 (11): 1404–1418.CrossRefGoogle Scholar
March, James G., and Sevon, Guje. 1988. “Behavioral Perspectives on Theories of the Firm.” In Handbook of Economic Psychology, edited by Fred van Raaij, W., van Veldhoven, Gery M., and Wärneryd, Karl-Erik. Dordrecht, Netherlands: Kluwer.Google Scholar
Moran, Theodore H. 1974. Multinational Corporations and the Politics of Dependence: Copper in Chile. Princeton, NJ: Princeton University Press.Google Scholar
Morgan, Glenn. 2001. “The Multinational Firm: Organizing across Institutional and National Divides.” In The Multinational Firm: Organizing across Institutional and National Divides, edited by Morgan, Glenn, Hull Kristensen, Peer, and Whitley, Richard. Oxford: Oxford University Press.Google Scholar
Musacchio, Aldo, and Lazzarini, Sergio G. 2014. Reinventing State Capitalism. Cambridge, MA: Harvard University Press.Google Scholar
Pauly, Louis W., and Reich, Simon. 1997. “National Structures and Multinational Corporate Behavior.” International Organization 51 (1): 1–30.Google Scholar
Penrose, Edith T. 1960. “The Growth of the Firm – A Case Study: The Hercules Powder Company.” Business History Review 34 (1): 1–23.Google Scholar
Penrose, Edith T. 1968. The Large International Firm in Developing Countries. Cambridge, Mass.: MIT Press.Google Scholar
Polanyi, Karl. 1944. The Great Transformation. New York: Farrar & Rinehart.Google Scholar
Porter, Michael E. 1996. “What is Strategy?” Harvard Business Review 74 (6): 1–20.Google Scholar
Powell, Walter W. 1990. “Neither Market nor Hierarchy: Network Forms of Organization.” Research in Organizational Behavior 12: 295–336.Google Scholar
Richardson, G. B. 1972. “The Organization of Industry.” Economic Journal 82 (327): 883–896.Google Scholar
Robertson, D. H. 1928. The Control of Industry. London: Nisbet & Co.Google Scholar
Sako, Mari. 2008. Price, Quality, and Trust. Cambridge: Cambridge University Press.Google Scholar
Sally, Razeen. 1994. “Multinational Enterprises, Political Economy, and Institutional Theory: Domestic Embeddedness in the Context of Internationalization.” Review of International Political Economy 1 (1): 161–192.Google Scholar
Skalamera, Morena. 2014. Booming Synergies in Sino-Russian Natural Gas Partnership. White Paper. Cambridge, MA: Harvard Kennedy School.Google Scholar
Smith-Doerr, Laurel, and Powell, Walter W. 2005. “Networks and Economic Life.” In The Handbook of Economic Sociology, 2nd ed., edited by Smelser, Neil J., and Swedberg, Richard. Princeton, NJ: Princeton University Press; New York: Russell Sage Foundation.Google Scholar
Stern, Jonathan. 2012. “The Pricing of Gas in International Trade – An Historical Survey.” In The Pricing of Internationally Traded Gas, edited by Stern, Jonathan. Oxford: Oxford University Press.Google Scholar
Stern, Jonathan, and Rogers, Howard. 2012. “The Transition to Hub-Based Gas Pricing in Continental Europe.” In The Pricing of Internationally Traded Gas, edited by Stern, Jonathan. Oxford: Oxford University Press.Google Scholar
Stern, Jonathan, and Rogers, Howard. 2013. The Transition to Hub-Based Pricing in Continental Europe: A Response to Sergei Komlev of Gazprom Export. Oxford: Oxford Institute for Energy Studies.Google Scholar
Stopford, John, and Strange, Susan. 1991. Rival States, Rival Firms. Cambridge: Cambridge University Press.Google Scholar
Swedberg, Richard. 2003. Principles of Economic Sociology. Princeton, NJ: Princeton University Press.Google Scholar
Thorelli, Hans. 1986. “Networks: Between Markets and Hierarchies.” Strategic Management Journal 7 (1): 37–51.Google Scholar
Uzzi, Brian. 1996. “The Sources and Consequences of Embeddedness for the Economic Performance of Organizations: The Network Effect.” American Sociological Review 61 (4): 674–698.Google Scholar
Vernon, Raymond. 1971. Sovereignty at Bay. New York: Basic Books.Google Scholar
Vernon, Raymond. 1972. “Multinational Enterprise and National Security.” In The Economic and Political Consequences of Multinational Enterprise, edited by Vernon, Raymond. Boston: Division of Research, Graduate School of Business Administration, Harvard University.Google Scholar
Vernon, Raymond. 1974. “Enterprise and Government in Western Europe.” In Big Business and the State, edited by Vernon, Raymond. Cambridge, MA: Harvard University Press.Google Scholar
Westney, D. Eleanor. 2005. “Institutional Theory and the Multinational Corporation.” In Organization Theory and the Multinational Corporation. 2nd ed., edited by Ghoshal, Sumantra, and Eleanor Westney, D. New York: Palgrave Macmillan.Google Scholar
Wilkins, Mira. 1970. The Emergence of Multinational Enterprise. Cambridge, MA: Harvard University Press.Google Scholar
Wilkins, Mira. 1974. The Maturing of Multinational Enterprise. Cambridge, MA: Harvard University Press.Google Scholar
Wilkins, Mira. 1986. “Defining a Firm: Theory and History.” In Multinationals: Theory and History, edited by Hertner, Peter, and Jones, Geoffrey. Aldershot: Edward Elgar.Google Scholar
Woll, Cornelia. 2008. Firm Interests: How Governments Shape Business Lobbying on Global Trade. Ithaca, NY: Cornell University Press.Google Scholar