An institutional logics approach to liability of foreignness: The case of mining MNEs in Sub-Saharan Africa

Newenham‐Kahindi, Aloysius; Stevens, Charles E.

doi:10.1057/s41267-017-0111-y

Cited by 75 publications

(85 citation statements)

References 66 publications

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“…Also, a weak host country institutional framework might result in adaptations to the MNE's operational and local collaboration strategies to respond to these institutional voids and uncertainties (Doh, Rodrigues, Saka-Helmhout, & Makhija, 2017;Santangelo & Meyer, 2011;Santangelo, Meyer, & Jindra, 2016). Alternatively, MNEs may engage in the co-creation of a new institutional logic and encourage local employees embedded in the competing institutional logics to become key intermediaries (Newenham-Kahindi & Stevens, 2017). In the context of work in this area, we propose the relevance of the subsidiary autonomy as an organizational strategy used by the MNEs against the inefficiencies and risks inherent in weak institutional contexts such those with higher tolerance of corruption.…”

Section: Discussionmentioning

confidence: 99%

Host country corruption and the organization of HQ–subsidiary relationships

Rabbiosi

Santangelo

2018

J Int Bus Stud

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Section: Discussionmentioning

confidence: 99%

Host country corruption and the organization of HQ–subsidiary relationships

Rabbiosi

Santangelo

2018

J Int Bus Stud

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“…Yet, the ambiguity our expatriate informants perceived around acts such as gift giving indicates the need for further exploration into what types of activities are or are not perceived as consistent with accepted norms and expectations. Likewise, our informants indicated that foreign MNEs tended to be held to different, and often higher, standards than local actors (Cantwell, Dunning, & Lundan, 2010;Edman, 2016;Newenham-Kahindi & Stevens, 2018), suggesting the need for a more nuanced understanding of the legitimacy or illegitimacy of specific acts, and of the actors engaging in them.…”

Section: Discussionmentioning

confidence: 86%

“…If engaging in corrupt acts is not required for MNEs to gain legitimacy, the pressures firms face to engage in such actions may be less rigid than has been traditionally assumed. In other words, MNEs seeking an engagement strategy have the active agency to treat the environment not as fixed, but negotiable (Newenham‐Kahindi & Stevens, 2018; Regnér & Edman, 2014; Saka‐Helmhout, 2020); they have the opportunity to gain legitimacy through noncorrupt means even in host countries where corruption is pervasive. As our findings indicate, doing so reduces the motivation of government officials to demand bribes and increases the firm's popular support in the host country, decreasing the firm's need to pay bribes or engage in other corrupt activities.…”

Section: Conceptual Developmentmentioning

confidence: 99%

Avoid, acquiesce … or engage? New insights from sub‐Saharan Africa on MNE strategies for managing corruption

Stevens

Newenham‐Kahindi

2020

Strategic Management Journal

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Research summary Many questions remain about how MNEs manage corruption. Moreover, what is known derives largely from the perspective and experiences of developed country MNEs. To address this limitation, we compare developed country and developing country MNEs' approaches for managing corruption in sub‐Saharan Africa. Through an inductive, qualitative research design, we discover how and why firms engage in “avoidance” and “acquiescence” strategies. We also uncover a novel “engagement” strategy pioneered by developing country firms that involves such tactics as finding innovative substitutes for corrupt activities, leveraging partnerships with governments and other firms, and forming deeper, long‐term relationships in the host country. These findings suggest that MNEs have more room for active agency and more proactive strategies for managing corruption than has typically been assumed in the literature. Managerial summary Multinational firms face challenges in host countries where corruption is common, due to concerns that they will need to engage in corrupt acts in order to survive. Some respond by simply not operating in these countries, while others fall into the trap of engaging in illicit activities. We consider an alternative perspective: that firms may use deeper positive engagement with the host country to reduce pressures to engage in corruption, by building their popular acceptance and strengthening their bargaining power. Although we find that this “engagement” approach was first used by developing country firms, developed country firms have also begun using this strategy. The logic underlying this approach can help managers succeed abroad while reducing the need to get their hands dirty in the process.

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“…However, lack of market mechanisms, low-quality infrastructure and underdeveloped factor markets are still prevalent (Hoskisson et al , 2013). Previous studies showed that mainstream theories and findings only partially explain how institutions influence firm strategy and performance in this context (Acquaah, 2007; Newenham-Kahindi and Stevens, 2018; Ofori-Dankwa and Julian, 2011). They described the unique nature of institutional voids and firm dynamics in Africa and called for more research to test international business and strategic management theories (Beamish and Lupton, 2016; Luo et al , 2019).…”

Section: Introductionmentioning

confidence: 93%

Ways to win: strategic choices, institutions and performance in sub-Saharan Africa

Choe

Kang

2021

MBR

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Purpose The purpose of this study is to analyse the effects of market-based and nonmarket-based strategies on firm performance in African countries. This study also investigates host country institutions' effect on the relationship between firm strategies and performance in these countries. Design/methodology/approach Data of 1,276 firms in five African countries were obtained from two different sources: The World Bank Enterprise Database and The Global Competitiveness Report. Two-stage least squares regression was applied. Findings Both market-based strategies and corporate political activity (CPA)improve firm performance in the African countries included in the analysis. Institutional development also has a direct positive impact on firm performance. However, the effect of CPA weakens as the host country shifts towards more efficient, market-oriented institutions. Furthermore, the results show that local African firms benefit more from institutional development than foreign firms. Originality/value The paper confirms and extends our understanding of the dynamic fit between institutions and strategy by highlighting the moderating role of institutional development on CPA and market-based strategies in enhancing firm performance.

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An institutional logics approach to liability of foreignness: The case of mining MNEs in Sub-Saharan Africa

Cited by 75 publications

References 66 publications

Host country corruption and the organization of HQ–subsidiary relationships

Host country corruption and the organization of HQ–subsidiary relationships

Avoid, acquiesce … or engage? New insights from sub‐Saharan Africa on MNE strategies for managing corruption

Ways to win: strategic choices, institutions and performance in sub-Saharan Africa

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