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Engaging informal institutions through corporate political activity: Capabilities for subnational embeddedness in emerging economies
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Date
2021-09-23
Authors
Mbalyohere, Charles
Lawton, Thomas C.
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier Inc.
Published Version
Abstract
This study examines how multinational enterprises (MNEs) organize internally to enhance subnational institutional fit in new frontier developing economies. We consider how corporate political activity (CPA) can facilitate local embeddedness by engaging informal institutions and nonmarket stakeholders at local community level. We apply an exploratory, qualitative, multi-case study approach to six MNEs in Uganda's electricity generation sector. The findings suggest that in markets like Uganda, MNEs depend on being bridged with subnational informal institutions such as tribal, social, and religious norms and grassroots political networks. Such bridging in turn positions these MNEs to contribute to developmental processes by integrating recognizable informal institutions into grassroots projects. Drawing on institutional theory and an organizational capabilities perspective, we identify the diverse bridging capabilities that enable MNEs to successfully embed locally, thereby simultaneously pursuing business objectives and achieving societal relevance.
Description
Keywords
Bridging capabilities , Corporate political activity , Emerging markets , Informal institutions , Local embeddedness , MNE nonmarket strategy
Citation
Mbalyohere, C. and Lawton, T. C. (2022) 'Engaging informal institutions through corporate political activity: Capabilities for subnational embeddedness in emerging economies', International Business Review, 31(2), 101927 (15pp). doi: 10.1016/j.ibusrev.2021.101927