The 4 Cs of MNE Strategic Responses to Global Governance

Abstract

This chapter centers on the global leadership of enterprises and their strategic business decisions as they interact with intergovernmental organizations (IGOs) and nongovernmental organizations (NGOs) in constructing a supranational global governance regime to address complex global issues. As the world faces myriad issues that transcend state borders, negative externalities of globalization, such as climate change and pandemics, are straining the current system and threatening vulnerable populations. To better understand how firms address these challenges, we present a stakeholder framework involving multinational enterprises (MNEs) in a supranational context and examine their relationships with IGOs, international nongovernmental organizations, and NGOs. A typology of firm behavior is introduced to describe four strategic responses to increased pressure for corporate social responsibility that represent the extent to which firms take leadership roles. Case studies illustrate each of the four archetypes, namely the collaborator, the complier, the counteractor, and the combatant. The situational strength of global governance organizations can have an influence on which strategic response MNEs choose, and ultimately on how MNEs decide to engage in socially responsible behaviors. The interrelatedness of MNEs and global governance organizations will continue to grow as humankind grapples with complex global issues that threaten our way of life. The 4 Cs of MNE strategic responses inform how firms may choose to respond to these challenges.