Engaging Stakeholders Through Corporate Political Activity: Insights From MNE Nonmarket Strategy in an Emerging African Market

Abstract

As interest increases in the political engagement between multinational enterprises (MNEs) and emerging economy host governments, less is known about wider MNE stakeholder engagement and the development of nonmarket capabilities in institutionally fragile environments. This study investigates how MNEs engage stakeholders through corporate political activity (CPA) during the pro-market reform of Uganda’s electricity generation sector. Data is collected through semi-structured interviews, archival materials and fieldwork notes, and is analyzed using an NVivo-supported grounded analytic method. We find both proactive and reactive leveraging of CPA to manage diverse stakeholders. We argue that the host government remains the most important political stakeholder in the early phases of reform, but changes in institutional and political environments necessitate strategic adaptations as the reform process progresses. These adaptations include the need for local engagement and the accommodation of multi-level stakeholder pressures. Our findings contribute to an understanding of corporate political capabilities in Africa’s emerging markets, and illustrate how these capabilities can be strategically leveraged to effectively manage diverse stakeholders.