Multinational enterprises and natural disasters: Challenges and opportunities for IB research

Abstract

The purpose of this paper is to encourage and to extend research on natural disasters and international business (IB). More specifically, we review the characteristics of natural disasters and the unique challenges they pose to the business environment and examine how they differ from other types of disasters/crises often researched in the IB literature. Next, we investigate the applicability and challenges of core IB theories to the study of natural disasters. By extending new internalization theory (NIT) to overcome challenges of bounded rationality and reliability, we identify effective strategies for managing the threat of natural disasters through establishing multi-sector partnerships and alternative supply chains. Integrating research on the characteristics of natural disasters and the insights from NIT, we propose natural disaster management strategies for multinational enterprises (MNEs) based on varying degrees of geographic scope of natural disasters and MNEs. This paper concludes with proposing new research opportunities for IB scholars in disaster preparedness, cross-organizational collaborations, and supply chain management.

Strategic human resource management in the era of environmental disruptions

“…First, natural disasters such as tsunamis, earthquakes, and typhoons seriously disrupt the management of the workforce. Natural disasters are often called "acts of God" as they are unsystematic high uncertainties that do not allow organizations to predict and prepare for the occurrence and their consequences (Oh & Oetzel, 2022). Natural disasters may have a profound impact on HRM.…”

“…Due to its unexpectedness and its profound impact on existing arrangements within and across organizations, environmental disruption is a challenging managerial concern. Although management scholars have developed rich discussions on organizational responses to a range of changing business environments, research on disruptive environments is still in an emerging stage (Hällgren et al, 2018; Oh & Oetzel, 2022).…”

A bibliometric analysis and future research opportunities in Multinational Business Review

“…The concept of development in the host nation must expand beyond market-oriented economic goals to include a far broader range of objectives, such as social and environmental goals (Bento and Moreira, 2019; Cave, 2014; Choi and Park, 2014; Kolk and Fortanier, 2013; Sinkovics et al , 2021). MNE strategies facing various challenges for their sustainability should be carefully examined based on the characteristics of uncertainty/risks, and geographic and geopolitical contexts (Carney et al , 2021; Oh and Oetzel, 2022). Extending research beyond economic factors to social, political and environmental concerns would better clarify the consequences of MNE growth.…”

Does Water Matter? The Impact of Water Vulnerability on Corporate Financial Performance

“…Secondly, the natural environment not only reduces the productivity of a company by affecting the productive mood and work behavior of its employees [ 40 , 41 ] but also affects its business efficiency by influencing its trade transactions [ 42 ]. The deterioration of the natural environment also increases the likelihood that companies will experience environmental disasters, thereby increasing the risk of damage to equipment, supply chains, and production [ 15 , 43 , 44 ].…”