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

Abstract

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.

Can blockchain-technology fight corruption in MNEs’ operations in emerging markets?

“…Hence, blockchain implementation requires concerted effort where actors collectively commit to the incremental implementation of blockchain technology. In line with Stevens and Newenham‐Kahindi (2021), a diverse set of collaborators offers benefits at a scale and scope that can permeate industrial sectors, decreasing the ability of government officials to interfere in MNEs’ local market collaborations. The implementation of blockchain technology is an ongoing process that, particularly for permissionless blockchains, requires broad participation.…”

“…Despite the growing body of research that has identified the risks and negative consequences of corruption for MNEs operating in EMs, researchers have pointed out that studies elucidating how MNEs can manage corruption remains scarce (Rodriguez et al, 2006;Cuervo-Cazurra, 2016;Stevens and Newenham-Kahindi, 2021). Rodriguez et al (2006, p. 739) state: "Scholars have not had much to say regarding strategies for avoiding or managing corruption [.…”

Environmental, social and governance (ESG) performance in the context of multinational business research

“…This leads to an increasing interest to incorporate a wider ESG lens into procurement decisions. Various IB scholars have already proposed that research needs to pay greater attention to MNEs' governing role within and beyond global supply chains to lessen governance inadequaciesfor instance, concerning modern slavery, human rights and working conditions (Caruana et al, 2021;Burmester et al, 2019;Stringer and Michailova, 2018), but also issues such as corruption (Stevens and Newenham-Kahindi, 2021). This will have a direct impact on the availability of data and frameworks for the ESG context as well.…”

Trevino and Doh’s discourse-based view: Do we need a new theory of internationalization?

“…Some IB scholars have observed that the field can gain the benefits of new insights, with less risk of fragmentation, by recombining existing ideas in novel ways, rather than through the introduction of completely new ideas (Stevens & Newenham-Kahindi, 2021). Thus, in addition to benchmarking new ideas against existing theories, a second question to ask before integrating new concepts into our community is whether a recombination of paradigms that already exist can be adapted to address the new situation.…”

“…Thus, in addition to benchmarking new ideas against existing theories, a second question to ask before integrating new concepts into our community is whether a recombination of paradigms that already exist can be adapted to address the new situation. To illustrate, we draw on our study of MNE strategy and corruption in developing countries (Stevens & Newenham-Kahindi, 2021). Despite the new context, we discovered that we did not need to introduce new theory to understand how MNEs manage corruption.…”