Varieties of populism

Abstract

Research Summary The recent electoral popularity of populism suggests our understanding of global and domestic institutions and their impact and relevance to international business may require adjustment. In particular, the literature may be omitting key variables as to what the political environment entails. We propose a framework for understanding the differing varieties of populism. We examine what channels populist thought operates through and how various strains of populism concentrate on different facets of society. We articulate an operational definition for international strategy based upon prior research in economics, political science, and history. This framework is incorporated into current research on institutional theory as applied in international business, with the goal of proposing a more nuanced and foundational view of institutional environments and how they impact global strategy. Managerial Summary The surge of populism globally—but especially in developed economies—has highlighted new perils for business strategy. Our current models of strategic thinking have not yet caught up to the reality of populism's moment, nor have they accurately captured what are increasingly important facets of a political system, such as traits of specific leaders. This paper examines the need to incorporate new perspectives on institutions into global strategy. In particular, we highlight the various varieties of populism—whether it focuses on economic, social, or political ends—and how each approach can impact a business in a different manner. In doing so, we provide some clarity and guidance for managers faced with political turbulence.

International entrepreneurship in the post Covid world

“…However, these institutions have come under attack as favoring more advanced countries, allowing them to grow richer at the expense of the poor. Some populist leaders have also come to see these institutions as a means of hegemony that undermine national sovereignty, calling for their reform or abandonment ( Devinney & Hartwell, 2020 ; Zahra, 2020 ). Covid has taken hold globally at a time of great political turmoil, further highlighting the vulnerabilities of international institutions as countries have closed their borders and competed with each other to procure medical supplies needed to take care of their citizens.…”

“…Calls for “in shoring” production have long preceded Covid. Populist movements have highlighted the risk of dependence on foreign companies to undertake production of essential goods and services, engaging in trade wars that have further intensified these nationalist sentiments ( Ancarani, Mauro, & Mascali, 2019 ; Dachs, Kinkel, & Jager, 2019 ; Devinney & Hartwell, 2020 ). Research has also highlighted the downside effects of outsourcing, especially hollowing firms’ competence bases and weakening their investments in proprietary and tacit knowledge and skills that build and sustain their capabilities ( Bettis, Bradley, & Hamel, 1992 ).…”

“…Well before the arrival of Covid-19 (Covid), a debate waged on the future of globalization and the place of new firms in the emerging world order. Populist, nationalist and anti-globalization movements—with varying ideological agendas—have raised serious questions about the role of international institutions as well as who benefits from internationalization ( Devinney & Hartwell, 2020 ; Rodrik, 2018 ). Against this backdrop of political turmoil, the arrival of Covid has only made things worse, fueling concerns about the future of world business and the role of multinational firms, large and small.…”

The local co-evolution of firms and governments in the Information Age

“…Beginning with the financial crisis and its aftermath, the global economy has witnessed multiple shocks, which have intensified anti-globalization populism on both the political left and right (Devinney & Hartwell, 2020 ; Rodrik, 2018 ). In manufacturing industries, skill-biased technological change has resulted in low to medium-skilled jobs being either automated or offshored to emerging markets.…”

“…While intrafirm trade (internalized transactions across borders within the MNE) continues to play an important role in world trade, both global merchandise trade and trade in commercial services actually shrunk in 2015–2016, although both recovered past their earlier levels prior to the onset of the COVID-19 pandemic. 1 At the same time, while MNEs have taken advantage of the opportunities offered by the ‘fine-slicing’ of the value chain, the past decade has been marked by a rise in both left- and right-wing populist politics and politicians, at least some of whom are hostile to an open global economy and the flows of capital and people this entails (Devinney & Hartwell, 2020 ; Rodrik, 2018 ).…”