Abstract
Building on a business network perspective, the aim of this paper is to present a theoretical view for studying service MNEs in ICT (information communication technology) projects centred on the improvement of public services. The four interrelated concepts of cooperation, legitimacy, commitment and knowledge are applied in the analysis of two projects. Defining the projects as object-based services, the study manifests how service MNEs manage three types of actors (business, political and social) having their legitimacy in different systems. The cases illustrate cross-border activities where MNEs from Sweden, Spain and China join forces in Brazil with local business, social and political actors and cooperate to strengthen their competitive market position. The study concludes that successful cooperation is partially explained by the management’s ability to incorporate business resources into the needs of the socio-political actors. Furthermore, in object-based services, which are not similar to long-term business relationships, the three involved parties advance different types of relationships within a loose network structure. A key implication is that extensive public–private relationships are needed even when MNEs enjoy an established position in a foreign market.
Highlights
Fierce competition in foreign markets has encouraged multinational enterprises (MNEs) to engage in solving social problems since this can leverage business profits and, at the same time, increase MNEs’ legitimate position to non-business actors
Our research question is: How do established international service firms cooperate with business and non-business actors to expand in the local foreign market? Building on empirical data from Brazil, the purpose of the paper is to present a theoretical view for studying service MNEs in international projects, and hereby contribute with further understanding of the interaction between the three actors— MNEs, society and political
The theoretical view developed in this paper shows how actors who belong to different systems and have different legitimate grounds, can cooperate to achieve mutual gains
Summary
Fierce competition in foreign markets has encouraged multinational enterprises (MNEs) to engage in solving social problems since this can leverage business profits and, at the same time, increase MNEs’ legitimate position to non-business actors. Despite the increasing role of pure service or services connected to products, research on how these MNEs manage their social and political environment has remained almost non-existent (Ghauri et al 2012). Disregarding whether those in question are industrial or service firms, researchers like Polonsky and Jevons (2009), Hadjikhani et al (2012) and Marquina and Morales (2012) have a general consensus that the management of social and political environments is the key marketing strategy that influences competition, market image and success in entry and expansion into foreign markets (Ghauri et al 2012). The management of socio-political relationships has been recognised as an important strategic tool to help MNEs build legitimacy at home and in host markets (Hadjikhani et al 2008), the interaction between business, policy makers and society remains underexamined in international service marketing, at least in comparison to the traditional networks of industrial firms
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