Inter-state war, institutions and multinationals: insights from the Russian-Ukraine war

Abstract

PurposeWars, and violent conflicts generally, can generate significant institutional dynamics and new legitimacy pressures for multinational enterprises (MNEs). The purpose of this paper is to understand the nature or source of institutional pressures facing MNEs in war and to examine how MNEs respond and navigate these institutional pressures.Design/methodology/approachThis is a conceptual paper.FindingsThrough the theoretical lens of institutional theory and drawing on insights from the devastating Russian–Ukrainian war in Europe, the study provides a framework that explains the nature of institutional pressures impacting MNEs in a major war conflict and how MNEs respond to these pressures. Central to the framework is the impact of formal and informal institutions on MNEs during war. As a result of regulatory and social pressures, MNEs have to make important strategic decisions either to protect their legitimacy or to defend their economic objectives against institutional demands.Originality/valueAs the paper situates the pressures of war for MNEs in a formal and informal institutional context, this offers a new approach to understanding the costs and pressures of war on MNEs.