Caught in the crossfire: Multinational enterprises in the era of geopolitical tensions

PurposeThis paper aims to draw on international relations (IR) literature to analyze, from a critical standpoint, recent developments in international business (IB) and international management (IM) in the USA, and the emerging debate between mainstream and critical researchers in Anglo‐American literature. It also aims to show that these important undertakings overshadow the political role of international disciplines and constrain the development of a critical perspective in IB from Latin America.Design/methodology/approachBased on an interdisciplinary approach, this paper addresses the main debates on IR regarding the “international” and the control of international fields of knowledge by the great powers to foster a critical perspective in IB from Latin America.FindingsCritique from a universal perspective which does not differentiate IB and IM in the Anglo‐American literature is important, but constrains the appraisal of specific national and regional issues that are of vital importance to the development of a critical perspective in IB from Latin America.Practical implicationsThis critical perspective moves beyond disciplinary boundaries and raises implications for research and teaching of IB and IM in Latin America.Originality/valueThis paper problematizes, from a perspective focused on the political economy of knowledge, the overlooking of debates about the “international” and of specific conditions that both enable and constrain the development of fields of knowledge from a less asymmetrical standpoint.

Managing the Embedded Multinational: A Business Network View, Mats Forsgren, Ulf Holm, Jan Johansson, Edward Elgar, Cheltenham, 2005

The field of international business is constantly evolving, and there is much debate about what exactly constitutes international business and how its definition influences theorizing. Traditionally international business has focused on cross-border activities of multinational enterprises, including foreign direct investment, multinational enterprises’ strategies, and organization, along with the understanding of the process of internationalization. Changes in the global environment have necessitated a broader, multidisciplinary approach to international business theorizing. This paper explores how international business emerged as a field of inquiry and how the interrelated fields such as international management, international entrepreneurship, and international strategy can inform international business theorizing. A more complementary approach would be beneficial rather than treating these fields as distinct ones. Moreover, this paper recognizes the complex nature of the global environment and highlights the myriad of challenges and opportunities it presents for businesses operating internationally. It proposes a future research agenda that considers this intricate global context, and challenges international business scholars to adopt a holistic and multidisciplinary approach to develop comprehensive theories that capture the dynamic and interconnected nature of the complex global business environment.

This book focuses on the cultural challenges often faced by international managers and global business operations. In the last few decades, the world has witnessed unprecedented economic turmoil, volatility, and uncertainty which has altered the political dynamics and sociocultural landscape around the globe and directly or indirectly affected international business activities. Further, new markets have opened up in every corner of the world. Brazil, Russia, India, and China, collectively known as BRIC, are strong emerging economic powers similar to the once captivated ‘Asian Tigers’ such as Hong Kong, Singapore, South Korea and Taiwan which rose decades ago. The emergence of these markets has heightened both the opportunities and challenges for national and international businesses. Multinational firms are gradually expanding in the emerging markets and are expected to become giants in the foreseeable future. As they expand, they also need to assume increasing social responsibilities in a global context, and it is important that the ways business is conducted are developed accordingly. As such, understanding the practices, challenges, and strategies that companies have developed is critical to global firm’s success. Against this background, the book highlights the importance of understanding cultural elements when managing multicultural human behaviors in the workplace. Based on conceptual and empirical work, it pushes the frontiers of knowledge of this emerging field in international business setup and management, and explores how globalization is changing the way in which multinational firms formulate their business strategies.

PurposeThis paper aims to apply the Legitimacy-Based View (LBV) of political risk to the experience of the Hongkong and Shanghai Banking Corporation (HSBC) in the First World War. The paper shows that HSBC’s ability to survive this conflict was due, in part, to its ability to manage political risk by maintaining legitimacy in the eyes of stakeholders in its home market(s), Hong Kong and the UK.Design/methodology/approachThis case study is based on the surviving internal correspondence from this period in the HSBC Group archives in London and other primary sources.FindingsThis paper suggests that maintaining legitimacy in the home market is crucial to firm survival and profitability. Managers’ efforts to bolster firm legitimacy should ensure that individuals in all of the relevant government departments continue to regard the multinational enterprise (MNE) as legitimate.Research limitations/implicationsThis paper shows that the LBV is a potentially powerful analytical tool, but it also argues that the LBV must be modified so as to incorporate insights from the theoretical literature on ethnic and national identities, particularly the insight that such identities are culturally constructed and malleable.Practical implicationsWarfare tends to increase the degree to which a MNE’s stakeholders feel emotional bonds to their respective nations. HSBC’s experience in the First World War suggests that continued profitability in wartime may depend on the firm’s ability to shed its peacetime “world citizen” identity in favour of one that is more closely aligned with that of its home nation. Preserving political capital in wartime may require the ruthless termination of relationships with clients and employees who are associated with the enemy nation. Another lesson that MNE managers can derive from this paper is that preserving legitimacy in the home country may require the head office to exert more control over overseas managers, than would be the case in peace. A MNE in wartime that is concerned about the loss of legitimacy in the home country should consider adopting an organizational architecture that temporarily reduces subsidiary autonomy.Originality/valueBuckley (2009) called for the re-integration of business history in International Business research. This paper is part of the ongoing historic turn in International Business and other management disciplines. This paper also argues that International Business scholars need to consider the impact of past wars on contemporary multinationals as we may witness the re-emergence of Great Power rivalries similar to those that led to the First World War. This paper proceeds on the assumption the probabilities of a war between two major capitalist economies are non-trivial and that additional investigation of the impact of major interstate warfare on MNEs is therefore merited. Historical research can help us to think about what a war between capitalist countries would mean for today’s MNEs.

Research Summary Although rising geopolitical tension is critically affecting multinational enterprises (MNEs), our understanding of geopolitics and its effects on corporate strategy is surprisingly limited. This study sheds light on this underexplored topic by examining the environmental, social, and governance (ESG) strategy of foreign MNEs amid tension between their home and host countries. We argue that the media plays a critical role in shaping host‐country public perceptions of such tension. As media‐reported tension increases, foreign MNEs enhance their subsidiaries' ESG performance to alleviate potential institutional pressure from the host‐country public. We further show that historical conflicts positively moderate this relationship, whereas ongoing conflicts serve as a scope condition that diminishes this relationship. This manifests that MNEs attempt to maximize ESG's insurance‐like benefits in coping with geopolitics. Managerial Summary Rising geopolitical tension leading to a less stable global business environment highlights the growing importance of geopolitics and strategic responses of firms. This study explores how host‐country media coverage of geopolitical tension affects foreign MNEs. If host‐country news media reports more tense interactions between MNE's home and host countries, the MNE ex ante is likely to experience heightened pressure from the host‐country public. Thus, we argue and show that MNEs subject to pressure from the host‐country public intensify their ESG efforts to enjoy the insurance‐like benefits of ESG's prosocial initiatives. Our study also shows that both past and ongoing conflicts between home and host countries differentially influence MNE's ESG efforts because the anticipated effectiveness of their strategy is heterogeneous.

This essay revisits my 2014 JIBS article about the potential for integrating international business internalization theory with a strategic management capabilities perspective. It recaps the capabilities framework with an emphasis on the learning required of emerging market multinationals and illustrates this with the case of Hyundai Motor Company’s internationalization and growth. It also discusses two aspects of the global economy that have become more prominent since 2014 in shaping international business: geopolitical uncertainty and digitalization. A rise in geopolitical tensions appears to be rebalancing the relationships between multinationals and home/host governments. Digitalization facilitates international business; but it adds new vulnerabilities by (further) accelerating competition, enabling new rivals, and introducing systemic risks into digital supply chains. Implications for managers, board members, and international business scholars are drawn.

In this essay, I discuss the implications of the debate over offshoring for our collective understanding of international business and management theories. I review several core theories in international business expansion and management strategy to assess which elements of these theories may need to be re‐specified in light of the offshoring phenomenon and which aspects remain relevant. I then present normative implications and recommendations for public policy and corporate strategy, drawing from emerging insights regarding the global responsibilities of corporations. I suggest that international labour and environmental standards and corporate codes of conduct could mitigate some of the most intense concerns raised about offshoring but conclude that offshoring is likely to present challenges to societies, corporations, and stakeholders for many decades.

Purpose This article aims to explore the implications of geopolitical tensions for internationally scaling businesses. It is suggested that internationally scaling firms may have a disproportionate exposure to the risks arising from geopolitical tensions and phenomena like techno-nationalism and trade protectionism due to their lack of resources and resilience compared to matured multinational enterprises. This article also examines the conditions under which scaling businesses may emerge as relevant political actors, either as agents or as instruments of the state. Design/methodology/approach This article draws on international relations theory, especially the logics of cooperation and conflict, which provide complementary insights into how geopolitical disruptions may influence cross-border scaling. It highlights how geopolitical tensions impact critical aspects of international scaling, including the ability to replicate business models, manage the speed and scope of their rapid growth, secure critical inputs, and leverage digitalization. Findings Both cooperation and conflict logics in international relations underscore the adverse effects of geopolitical disruptions on international scaling. Geopolitical tensions introduce significant risks and uncertainties that affect the unique dynamics of international scaling, leading to heightened vulnerabilities. The authors identify key mechanisms through which these tensions impact cross-border scaling. They also examine how scaling businesses engage with geopolitics in two distinct roles, acting as agents shaping the geopolitical environment and as instruments advancing state-driven objectives. Originality/value International business scholarship pays increasing attention to how firms can navigate rising geopolitical tensions and manage associate risks. This paper offers a context-sensitive view by examining internationally scaling firms and suggests areas for future research.

Purpose In this viewpoint, the author critically aims to examine the papers by Sinkovics and Archie-Acheampong (2019, this issue) “The social value creation of MNEs – a literature review across multiple academic fields” and by Rygh (2019, this issue) “Social value creation by multinational enterprises: the next “big question” for international business research?” and offer an appraisal of the papers’ merits as well as thoughts for further development of research on social value creation, critical international business and work that can conceivably contribute to scholarship on global grand challenges. Design/methodology/approach The author’s approach is a reflexive review of two papers in the Critical Perspectives on International Business special issue “social value creation of MNEs.” The underpinning tenet is that by shifting the domain of international business (IB) research from an exclusive focus on the MNEs’ economic success or failure to the role and responsibility of MNEs in global communities, IB’s contributions can be strengthened. Findings A reorientation of the IB disciplinary focus toward global grand challenges will contribute by improving the engagement with other allied disciplines such as political science, sociology and international relations and exchanging ideas and insights with those disciplines, providing a platform to speak to not just business communities but also policy and civil society communities and bring a sophisticated knowledge base to those discussions, and connecting some of our personal interests, beliefs and values with those of our disciplinary research. Research limitations/implications The papers covered in this special issue on social value creation underscore the diversity, plurality and richness of IB. In the early days of IB, scholars such as Hymer (1960), Vernon (1971) and others naturally position IBs and MNEs within a broader societal context and were open to exploring the various interactions and cross currents between and among business, government and civil society in the global environment. Against this background, this special issue and its papers thus widen the scope of our field again. Practical implications IB scholars may be able to broaden their contributions to include values-based and even normative judgements into their research process. Social implications If assumptions and biases are made explicit, critical and normative issues may suitably be incorporated in IB work and thus contribute to tackling grand societal challenges. Originality/value The papers discussed in this viewpoint and the “social value creation” special issue more broadly offer contemporary contributions regarding the role and responsibilities of business in the global commons. This is of significant value for further conceptual and empirical work that is critically and societally engaged.

PurposeModern slavery is a problem that international business (IB) research can no longer ignore. Multinational enterprises (MNEs) are often contributors to the persistence of modern slavery, by virtue of the regulatory challenge they pose to states and their insufficient oversight of supply chains. The purpose of this paper is to show that governance inadequacies with respect to modern slavery will be lessened if IB scholars give more attention to MNEs’ governing role within and beyond global value chains.Design/methodology/approachA set of arguments is presented in support of intensified effort in IB research with respect to studying the role of MNEs in transnational labour governance. The paper draws inspiration from IB theory and the conceptualisation of the MNE in neighbouring disciplines that regard it as a bearer of duties toward labour, consistent with its role in multilevel governance. Insights from the literature on global and multi-level governance are utilised.FindingsThe paper construes modern slavery as a multi-level governance challenge and argues that MNE capabilities and responsibilities with respect to labour governance and the deterrence of slavery exceed those identified on the margins of IB literature. MNEs are underappreciated as governors within the multilevel transnational labour governance system. The IB discipline is in a strong position to develop our understanding of the MNE’s different roles in governance and thereby contribute to the reduced incidence of modern slavery.Originality/valueThis paper represents an attempt to mobilise the IB academy to help eliminate slavery from workplaces that rely on MNE patronage or where labour rights abuses are made possible by MNE diversion of governance resources. It places particular emphasis on the use and abuse of MNEs’ governance capabilities in the sphere of international relations and calls attention to over-simplification of the MNE, IB’s primary unit of analysis.

Based on insights from the spillover, international business, and knowledge management literatures, we study factors that enhance multinational enterprise (MNE) scaling and growth. Viewing MNEs and their employees as potentially rich knowledge sources, we draw attention to MNE-to-MNE knowledge spillover which fuel MNE scaling throughout organizations and employ panel data spanning 44,256 foreign and 21,246 domestic MNEs during 2004-2017. Our results show that (a) foreign MNEs benefit from depth and breadth of organizational knowledge spillover available in a geographic region, (b) domestic MNEs benefit from the depth of human capital knowledge spillover, and surprisingly, (c) domestic ownership hampers MNE scaling.

The transition to a circular economy (CE) requires multinational enterprises (MNEs) to engage with diverse social actors involved in production, reuse, and recycling across global value chains (GVCs). Existing research often adopts a static, economics-based perspective that privileges MNEs while overlooking the dynamic interactions between MNEs and other social actors, as well as their varying interests, which shape the emergence of CE policies and practices in global supply chains. This study applies the concepts of transnational social spaces (TSSs) and transnational communities (TCs) to examine CE transitions in Bangladesh’s garment industry. Drawing on interviews with various social actors embedded in two interlinked cases, we develop a contextualized view of MNEs and their evolving relationships.1 We explore three emergent properties – shared purpose, shared cognition and logic, and symbolic change and transformation – that drive structured interactions within TSSs, fostering TCs that facilitate the transition to a CE in MNEs’ global supply chains. We highlight how shared objectives emerge from social actors’ interactions, promoting a TC with shared cognition that instigates symbolic changes across multiple actors and institutional contexts. At the same time, differences and tensions persist among these actors. By emphasizing the emergent and dynamic nature of TSSs and TCs – both of which reflect and enable the CE transition – this study contributes to research on sustainability transitions, international business (IB) management, and GVCs.

Cultural factors have long been known to influence the communication and success potential of competition. Cultural awareness shapes how business firms behave in cross-culturally reflected international markets. It is broadly recognized that cultural factors act as invisible barriers in international business communications. Understanding cultural differences is one of the most significant skills for firms to develop in order to have a competitive advantage in international business. This paper probes some key elements of cross-cultural issues in international business communication and provides a framework for creating competitive advantage for firms engaged in international business. Culture affects many aspects of international business communication. It impacts free trade policies, localization and standardization strategy decisions, advertising, brand effectiveness, business relationships, international business management, international marketing, international negotiation, and consumer behavior. Seven themes are suggested as guidelines for further research: Cultural impacts of markets, international versus domestic business communication, standardization versus adaptation in cross-cultural communication; cross-cultural dimensions of business communication research, cross-cultural aspects of the business communication mix (advertising, promotion, sales, public relations, trade shows, and commercials), cross-cultural aspects of business communication in the service sector, cross-cultural communication implications of the aftermarket and cross-cultural business communication education and professional training. The paper concludes with a suggestion that business anthropology should be adapted as a tool for the understanding of the effect of cultural differences on international business. Key words: Cross-cultural communication, business anthropology, business communication, international business.

Purpose Despite heightened geopolitical tensions in the current global business environment, a comprehensive understanding of geopolitical risk has remained understudied in international business literature. Accordingly, the purpose of this paper is to synthesize and analyse existing research on the interface of geopolitical risk and international business activities, aiming to identify theoretical/methodological gaps and areas of future research. Design/methodology/approach Through a systematic literature review method, this study critically evaluates 138 peer-reviewed articles published in a sample of 29 leading journals between 1990 and 2025. Findings This review paper provides novel research avenues around three key themes. First, it highlights the complexity and implications of competing geo-economic blocs and multi-polar geo-strategies for multinational enterprises’ (MNEs) activities. Second, it emphasizes the importance of non-market strategies as tools of mitigating geopolitical risk and multi-actor global threats. Third, the paper explores how the extraction and international trade of natural resources turn into seminal factors of growing geopolitical tensions. Practical implications This study suggests a variety of methodological tools to assist IB researchers and policymakers in identifying ways to mitigate emerging risks stemming from shifting geographies and international political conflicts. Originality/value Moving beyond home-host conflict unit of analysis, this study considers MNEs’ activities in an emerging and dynamic geo-economic context of competing and collaborative geo-economic groups, supply chains and trade corridors. Accordingly, the findings advance both theoretical and practical understandings of international business practices in a fragmented business environment.