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International strategy for the nonmarket context: stakeholders, issues, networks, and geography

Published online by Cambridge University Press:  20 January 2017

Rafael Lucea  and
Jonathan Doh
Jonathan Doh
Affiliation:
Villanova University, Bartley Hall Rm 2079, Management, 800 Lancaster Avenue, Villanova, PA 19085, USA
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Abstract

Multinational companies (MNCs) shape their nonmarket strategies in response to the social and political context in which they operate. Empirical evidence shows that these strategies frequently fall into one of two categories: they either consist of a disparate portfolio of disconnected country-level social and political programs or are composed of standardized corporate policies that are applied uniformly across geographies. The former type of strategy implies that MNC managers view their firm's context as extremely fragmented across country borders, while the latter reflects the perception of a highly homogeneous international environment. Yet, most industries and firms operate in a semi-globalized socio-political context. In this paper we propose that producing strategies that truly fit with the specific characteristics of an MNC's nonmarket context requires that this context be defined along four dimensions: stakeholders, issues, networks, and geography. Conceptualizing an MNC socio-political context in this way broadens dramatically the strategic choices of MNC managers. We illustrate the use of our model by describing four socio-political contexts frequently encountered by MNCs, and showing how alternative nonmarket strategies seem a better option than the standard “one-size-fits-all” or “every-country-a-different-strategy” approaches of today.

Type
Corporate Responsibility, Multinational Corporations, and Nation States
Information
Business and Politics , Volume 14 , Issue 3: Special Issue: Corporate Responsibility, Multinational Corporations, and Nation States , October 2012 , pp. 1 - 30
Copyright
Copyright © V.K. Aggarwal 2012 and published under exclusive license to Cambridge University Press 

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