First mover advantages in international business and firm-specific political resources

Frynas, Jędrzej George; Mellahi, Kamel; Pigman, Geoffrey Allen

doi:10.1002/smj.519

Cited by 350 publications

(295 citation statements)

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“…However, such a stance denies the reality that (1) multinational companies already intervene in the political process to attain corporate objectives (e.g. lobbying for new legislation) (Shaffer and Hillman 2000;Frynas, Mellahi, and Pigman 2006); (2) corporate activities such as tax avoidance and lobbying may be contributing to governance failures (Utting 2007;Henriques 2007); and (3) under certain circumstances, multinational companies may benefit commercially from governance failures in developing countries (e.g. non-enforcement of certain government regulations or the ability of companies to negotiate more profitable agreements with governments) (Frynas 1998).…”

Section: Undermining Governance Through Corporate Activitymentioning

confidence: 99%

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Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas Sector

Frynas

2010

J Bus Ethics

Self Cite

111

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Copyright and moral rights to this thesis/research project are retained by the author and/or other copyright owners. The work is supplied on the understanding that any use for commercial gain is strictly forbidden. A copy may be downloaded for personal, non-commercial, research or study without prior permission and without charge. Any use of the thesis/research project for private study or research must be properly acknowledged with reference to the work's full bibliographic details.This thesis/research project may not be reproduced in any format or medium, or extensive quotations taken from it, or its content changed in any way, without first obtaining permission in writing from the copyright holder(s).If you believe that any material held in the repository infringes copyright law, please contact the Repository Team at Middlesex University via the following email address:eprints@mdx.ac.ukThe item will be removed from the repository while any claim is being investigated. Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas SectorProfessor Jędrzej George Frynas Middlesex University Business SchoolThe Burroughs London NW4 4BT United Kingdom AbstractThis article evaluates the potential of the current Corporate Social Responsibility (CSR) agenda for addressing issues related to societal governance. The investigation focuses on the experience of the oil and gas sector, which has been among the leading industry sectors in championing CSR. In particular, the article analyses the issue of revenue transparency, which has been the principal governance challenge addressed by multinational oil and gas companies. The article suggests that (1) tackling governance challenges is crucial to addressing the impact of corporate activities; (2) current CSR and policy initiatives are entirely insufficient in addressing governance challenges; and (3) corporate activities may be contributing to governance failures. To be cited as:Frynas, Jedrzej George

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Section: Undermining Governance Through Corporate Activitymentioning

confidence: 99%

“…Previous research by the author points to the competitive advantages that oil companies can strategically draw from the political process (Frynas 1998;Frynas, Mellahi, and Pigman 2006).…”

Section: Undermining Governance Through Corporate Activitymentioning

confidence: 99%

Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas Sector

Frynas

2010

J Bus Ethics

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111

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“…The political ties literature further suggests that advantages of having political ties could be better performance (e.g., Hillman, 2005;Peng & Luo, 2000), first-mover advantages (Frynas, Mellahi, & Pigman, 2006), higher chances of a government bailout (Faccio, Masulis, & McConnell, 2006), or lower costs of capital (Boubakri, Guedhami, Mishra, & Saffar, 2012). Yet, we also know that political ties can derail firm strategy in various ways (e.g., Fan et al, 2007;Siegel, 2007).…”

Section: Political Ties and Appropriationmentioning

confidence: 99%

How powerful political ties appropriate resources and how weaker organizations protect themselves: A case study from Indonesia

Dieleman

Widjaja

2018

Asia Pac J Manag

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We advance the resource dependence literature on appropriation of organizational resources by powerful partners, focusing on political ties. Using a unique emerging market case of a venture with political ties, we advance theory by unpacking how political connections can hurt the organization by increasing the permeability of organizational boundaries. Our extensions highlight the crucial role of control mechanisms for politically connected organizations.Keywords Organizational boundary . Resource dependence . Political ties . PermeabilityOrganizations commonly seek to create linkages with external parties to access key resources and opportunities (Hitt, Ahlstrom, Dacin, Levitas, & Svobodina, 2004), especially in emerging economies (Ahlstrom, Young, Nair, & Law, 2003). Yet these linkages also carry some costs and risks (Lin & Si, 2010). Researchers employing resource dependence theory (RDT) in particular have shown that risks are prevalent when there is a power imbalance, as powerful partners may appropriate organizational resources (Casciaro & Piskorski, 2005;Emerson, 1962;Gulati & Singh, 1998;Pfeffer & Salancik, 1978). Although considerable research has advanced our knowledge of the conditions under which organizations seek partnerships (e.g., Hillman, Withers, & Collins, 2009;Katila, Rosenberger, & Eisenhardt, 2008), we know much less about the mechanisms by which powerful partners appropriate resources (Mellahi, Frynas, Sun, & Siegel, 2016;Xia, 2011) and, in turn, how weaker organizations can seek to protect themselves (Katila et al., 2008). This is important as smaller firms increasingly enter new markets and must partner with larger (and sometimes) state linked partners creating relationships that need to be carefully managed (Young, Ahlstrom, Bruton, & Rubanik, 2011). How companies can protect themselves against appropriation is a relatively recent but important research topic within RDT, especially in the context of powerful political ties, an area where capture by powerful partners is particularly acute. Political ties link the organization to the government with potentially beneficial effects (Hillman, 2005), but they cannot be fully controlled and may create their own problems such the extraction of rents or derailing strategy (Fan, Wong, & Li, 2007;Lin & Si, 2010;Shleifer & Vishny, 1994;Siegel, 2007;Sun, Hu, & Hillman, 2016;Sun, Mellahi, & Wright, 2012). A new generation of RDT research suggests this problem is particularly salient in emerging economies, where new ventures often need powerful political ties to acquire resources such as licenses to operate and build legitimacy, but this can yield a power imbalance that may stimulate appropriation of firm resources (Mellahi et al., 2016).A few recent studies address the question how appropriation works. For instance, Sun et al. (2016) detailed how substantial shareholders colluded with political ties to expropriate minority shareholders, but they focus mostly on well-established publicly listed companies. Dieleman and Boddewyn (2012) investig...

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“…Given that firm resources and capabilities are developed in response to institutional environments, we propose a categorization of political capabilities that differs from the usual distinctions between firm-level/internal and collective/external (Zhang et al, 2016;Oliver & Holzinger, 2008), or physical-, human, and organizational resources (Frynas et al, 2006). We distinguish three categories of capabilities that account for the key distinction between relationship-versus transactional/rule-based institutional systems (Peng, 2003): Transactional, organizational, and relational.…”

Section: Cpa and Political Capabilitiesmentioning

confidence: 99%

“…The extant literature conceives of CPA as strategies and behaviors that build on combinations of firm-level resources and capabilities (Oliver and Holzinger, 2008;Frynas et al, 2006). Institutional capabilities -including political capabilities -are developed over time and sometimes over very long periods (Carney et al, 2016;also Johanson & Vahlne 2009).…”

Section: Introductionmentioning

confidence: 99%

Coping with Autocracy: Corporate Political Activity, Institutional Duality, and MNE Local Firm Rivalry During 'Institutional Backsliding'

Sallai

Schnyder

2017

SSRN Journal

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This study contributes to the corporate political activities (CPA) and the "institutional duality" literature by investigating how MNE subsidiaries and local firms develop their CPA in an increasingly politicised environment in an emerging market (EMs). Our longitudinal case study, based on interviews with top-level managers in Hungary, supports the view that institutional duality is not just a constraint for MNEs, but allows even firms from institutionally distant economies to successfully transfer political capabilities to the host context, providing them with competitive advantage over local firms. However, we also find that the value of these capabilities changes as institutional change progresses in our post-socialist case. Therefore institutional duality needs to be understood as a time-dependent phenomenon. Year: 2017No: GPERC #53 GREENWICH POLITICAL ECONOMY RESEARCH CENTRE (GPERC)2

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First mover advantages in international business and firm-specific political resources

Cited by 350 publications

References 55 publications

Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas Sector

Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas Sector

How powerful political ties appropriate resources and how weaker organizations protect themselves: A case study from Indonesia

Coping with Autocracy: Corporate Political Activity, Institutional Duality, and MNE Local Firm Rivalry During 'Institutional Backsliding'

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