Toward a strategic management perspective on local content in African extractives: MNC procurement strategies between local responsiveness and global integration

Abstract

ABSTRACTLocal content requirements – i.e. government backed requirements that extractive MNCs must procure inputs locally – are fast becoming a major issue in MNC-host country bargaining in Africa. As a result of increasingly stringent local content requirements, extractive MNCs operating in Africa are facing a rapidly evolving strategic field, the management of which may have huge implications for their profitability and efficiency. While a vibrant and dynamic literature on local content in Africa is emerging, this literature is predominantly informed by economic and political perspectives, and strategic management perspectives are virtually absent. Hence, the aim of the paper is to characterize and develop the strategic management perspective on local content. Based on the classical local responsiveness-global integration grid, a framework is developed for, how MNCs may strategize on local content. The paper contributes to research by providing a conceptual framework that can inspire future strategic management research on MNC local content practices in Africa. Moreover, by providing a theory-based understanding of the strategic opportunities and challenges that face MNCs in relation to local content requirements, the paper may inform policymakers on how to better align local content interventions with MNC strategies and interests thus rendering them more effective.