Multinational enterprises and Sustainable Development Goals: A foreign subsidiary perspective on tackling wicked problems

Abstract

To address the unique challenge facing multinational enterprises (MNEs) in managing their foreign subsidiaries’ implementation of Sustainable Development Goals (SDGs), we propose a framework based on the foreign subsidiary identity transitions driven by the competing demands of parent and local stakeholders. Our work provides policymakers with a framework to better understand the links between the changes in the institutional level and the MNE’s strategy to attain SDG goals. The separate local identity driven by local stakeholder demands is conducive to the localized implementation of SDGs in the host country, while the subsidiary’s identification with its parent MNEs plays a critical role in achieving SDGs that impact the operations of the company and their business networks like suppliers and customers. By linking subsidiary identity with SDGs, we identify mechanisms that can be adopted by the parent firms and subsidiaries to engage with SDGs in the host country as well as how parent firms can transfer better practices to their subsidiaries. As such, policymakers can identify SDG gaps in the local environment, and as MNEs establish processes engaging with local SDGs, policymakers can encourage MNEs in the policy uptake. Similarly, policymakers can support MNEs align their local context strategies with SDG gaps.