Strategic Seminar（2013-08）

Topic：MNC Strategy andSocial Adaptationin Emerging Markets

Speaker:Meng Zhao,Moscow School of Management SKOLKOVO

Time:: Wedsday, 8 January,10:00-11:30am

Location:Room216, Guanghua Building 2

Abstract：

Multinational corporations (MNCs) are often accused of social misdeeds and experience public crises in emerging markets in the new century. It is widely studied how MNCs adapt to the host country’s market and consumer characteristics to improve economic returns, but their adaption to local stakeholder expectations regarding social issues has been understudied. This paper shows that, while the stakeholder environment evolves in emerging markets, adaptation approaches meant to arbitrage national differences but failing to meet local stakeholders’ social expectations tend to incur public crises. This study distinguishes economic adaptation and social adaptation as two sets of knowledge and capabilities, and examines their influence on consumer-rights-related crises experienced by 180 MNCs in China. The results show that MNCs’ early entry into China, reliance on local leadership, and speedy expansion of local employees lead to public crises while social adaptation activities mitigate the crises. The interaction effects further justify that adaptation strategies effectively reducing crisis risks need to coordinate economic and social components of firm activities. We discuss limitations, future research directions and managerial implications.

Your participation is warmly welcomed!