Beware the puppeteers: the role of geopolitics in the bargaining dynamics between a Russian politically connected MNC and the country of Montenegro

Abstract

PurposeThis paper aims to use the obsolescing bargaining power (OBP) Model (Vernon, 1977, 1998) to analyze the case of United Company Rusal, a Russian politically connected multinational companies (MNCs) that was one of the world’s largest aluminum companies between 2005 and 2014, having acquired and, ultimately, sold the Montenegrin aluminum smelter company Kombinat aluminijuma Podgorica.The authors did so with the aim of answering the following question: How do geopolitics affect the bargaining balance of power between a Russian MNC and a host country? Design/methodology/approachThe authors used the discourse analysis methodology to identify the key players in the bargaining process and illustrate the evolving bargaining process.FindingsThe authors demonstrated that, over time, the shift in power from the Russian MNC to the host government had not merely been the result of the increase in committed MNC assets in the host country but, rather, of a geopolitical chess game involving the Russian Government, North Atlantic treaty organization (NATO) and the European Union (EU). By extending the OBP model with geopolitics, the authors found that a political agenda can influence the outcome of a bargaining process.Originality/valueThe authors extended the OBP model to illustrate the complex interaction between an emerging market MNC and an emerging host country government, indirectly influenced by two supranational organizations – the EU and NATO.