Multinational Enterprises, Risk Management, and the Business and Economics of Peace

Multinational Business Review, Vol. 25, Issue 4, pp. 307-327 (2017)

18 Pages Posted: 18 Feb 2018

See all articles by Jennifer Oetzel

Jennifer Oetzel

American University

Jason Miklian

International Peace Research Institute, Oslo (PRIO); University of Oslo - Centre for Development and the Environment

Date Written: December 7, 2017

Abstract

Purpose – The purpose of this paper is to reconceptualize how managers of multinational enterprises (MNEs) manage risk, particularly in fragile and/or conflict-affected areas of operation. The authors suggest that MNEs consider reducing risk at its source rather than trying to avoid or react to risks as they occur. By incorporating peacebuilding strategies, managers may not only reduce investment risk but also contribute to stability and prosperity in the communities where they operate, and gain a competitive advantage in doing so.

Design/methodology/approach – The authors show how firms can take a more holistic approach to working in conflict-affected areas. They do so by overlaying conceptualizations of risk with those of peacebuilding and then use case examples to illustrate how such actions work in practice.

Findings – Using a series of examples, the authors find that MNEs that incorporate peacebuilding frameworks in their risk calculations in complex settings tend to have a better understanding of local environments and how they affect firm operations and profitability. These same MNEs may hold a long-term advantage over international competitors that do not share the same understanding.

Originality/value – The authors argue that the study of relationships between international businesses and society in conflict-affected or fragile areas of operation is under-developed and tends to focus on negative (risk-aversion) aspects as opposed to positive (value-added) opportunities. This paper offers new ways in which these relationships can be reconceptualized. The authors’ main takeaway is that a peacebuilding approach does not require corporations to be arbitrators of peace at the expense of profit. Rather, it is instead a broader way to conceptualize and weigh risk when working in the world’s most challenging regions. This approach is more likely to be in the long-term interest of both the firm and the local society where the firm operates.

Keywords: CSR, Risk mitigation, Corporate sustainability, Peacebuilding, Business for peace

JEL Classification: O12, O17, O19, F35, F50, F43, F60, F63

Suggested Citation

Oetzel, Jennifer and Miklian, Jason, Multinational Enterprises, Risk Management, and the Business and Economics of Peace (December 7, 2017). Multinational Business Review, Vol. 25, Issue 4, pp. 307-327 (2017), Available at SSRN: https://ssrn.com/abstract=3120150

Jennifer Oetzel

American University ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States

Jason Miklian (Contact Author)

International Peace Research Institute, Oslo (PRIO) ( email )

Oslo
N-0260 Oslo
Norway

University of Oslo - Centre for Development and the Environment ( email )

P.O. Box 1116 Blindern
K1A 0G9
0317 Oslo
Norway

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