Balancing to Utopia: Multinationals in Oligarchies

In S. McGuire, R. Strange, & V. Shirodkar (Eds.), Non-market Strategies in International Business (pp. 41-73). Cham: Palgrave Macmillan. doi:10.1007/978-3-030-35074-1_3

The University of Auckland Business School Research Paper Series

Posted: 14 Nov 2021

See all articles by Camilla Jensen

Camilla Jensen

Roskilde University

Peter Zamborsky

University of Auckland Business School

Date Written: 2020

Abstract

This chapter extends the obsolescing bargaining model (OBM) (associated with international joint ventures in authoritarian states) to show how it is relevant to multinational companies (MNCs) operating in evolving non-democratic oligarchic regimes. Using four critical cases from international businesses in Turkey and Russia, the chapter demonstrates how the economic and attempted political transitions lead up to an international environment of heightened political risk. The heightened risk can be explained by the embeddedness of the original OBM in a triadic relationship between the MNC, the host government, and a local (private) business partner. This increased complexity in the foundational nature of the OBM is what exposes international businesses to many more threat points. These could be increasing with democratization, making the business environment less predictable and thus more uncertain for managers to navigate in. ‘Balancing to utopia’ or maintaining stable positive relations in the triad (MNC–host government–local business partner) as prescribed by network theory may be the best strategy in oligarchies towards reducing political risk.
Full article (chapter) available at doi:10.1007/978-3-030-35074-1_3

Suggested Citation

Jensen, Camilla and Zamborsky, Peter, Balancing to Utopia: Multinationals in Oligarchies (2020). In S. McGuire, R. Strange, & V. Shirodkar (Eds.), Non-market Strategies in International Business (pp. 41-73). Cham: Palgrave Macmillan. doi:10.1007/978-3-030-35074-1_3 , The University of Auckland Business School Research Paper Series, Available at SSRN: https://ssrn.com/abstract=3961737

Camilla Jensen (Contact Author)

Roskilde University ( email )

Universitetsvej 1
P.O. Box 260
Roskilde, DK-4000
Denmark
+4530141200 (Phone)

HOME PAGE: http://https://forskning.ruc.dk/da/persons/camje

Peter Zamborsky

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

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