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Nongovernmental organizations as institutional actors in international business: theory and implications

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  • Doh, Jonathan P.
  • Teegen, Hildy
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    Abstract

    Nongovernmental organizations (NGOs) have emerged as major actors in international business. NGOs have assumed a particularly prominent role in influencing the interaction between business and governments over the terms of international business rules, norms, and practices, especially the conditions applied to international investment projects. In this paper, we argue that the rise of NGOs as important institutional actors requires new perspectives on state-firm interactions in an era of increasing globalization. Host governments and multinational corporations (MNCs) must now critically assess the potential impact of nongovernmental actors on investment plans and projects. Drawing from institutional, agency, and stakeholder theory, we develop a model to help organizations evaluate and assess the relative importance of NGOs to the stability and longevity of international investment projects and the emergent impact of NGOs on investment projects at different stages of the investment cycle. We use the specific circumstance of infrastructure privatization and state-owned enterprise restructuring to demonstrate the potential value of this perspective to MNCs and host governments. We suggest this approach is also useful in evaluating classes of other stakeholders, and in examining other situations in which governments, companies, and NGOs negotiate over the terms of international business exchanges.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 11 (2002)
    Issue (Month): 6 (December)
    Pages: 665-684

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    Handle: RePEc:eee:iburev:v:11:y:2002:i:6:p:665-684

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    Keywords: Institutions Nongovernmental organizations Stakeholder Agency Multinational corporation Privatization Business-government relations;

    References

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    2. Hahn, Rüdiger & Gold, Stefan, 2014. "Resources and governance in “base of the pyramid”-partnerships: Assessing collaborations between businesses and non-business actors," Journal of Business Research, Elsevier, vol. 67(7), pages 1321-1333.
    3. Matthew Walker & Bob Heere & Milena Parent & Dan Drane, 2010. "Social Responsibility and the Olympic Games: The Mediating Role of Consumer Attributions," Journal of Business Ethics, Springer, vol. 95(4), pages 659-680, September.
    4. Chizema, Amon & Buck, Trevor, 2006. "Neo-institutional theory and institutional change: Towards empirical tests on the "Americanization" of German executive pay," International Business Review, Elsevier, vol. 15(5), pages 488-504, October.
    5. Brendan O'Dwyer & Jeffrey Unerman, 2007. "From functional to social accountability: Transforming the accountability relationship between funders and non-governmental development organisations," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 20(3), pages 446-471, April.
    6. Y. Fassin, 2011. "A dynamic perspective in Freeman’s stakeholder model," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/727, Ghent University, Faculty of Economics and Business Administration.
    7. Vachani, Sushil & Doh, Jonathan P. & Teegen, Hildy, 2009. "NGOs' influence on MNEs' social development strategies in varying institutional contexts: A transaction cost perspective," International Business Review, Elsevier, vol. 18(5), pages 446-456, October.
    8. Wu, Jun & Li, Shaomin & Samsell, Darryl, 2012. "Why some countries trade more, some trade less, some trade almost nothing: The effect of the governance environment on trade flows," International Business Review, Elsevier, vol. 21(2), pages 225-238.
    9. Aloysius Newenham-Kahindi, 2011. "A Global Mining Corporation and Local Communities in the Lake Victoria Zone: The Case of Barrick Gold Multinational in Tanzania," Journal of Business Ethics, Springer, vol. 99(2), pages 253-282, March.
    10. Drogendijk, H.J., 2005. "The Development of Network Relations of MNC Subsidiaries: How Internal MNC and External (Local) Relations Evolve," Discussion Paper 2005-128, Tilburg University, Center for Economic Research.
    11. Rivera-Santos, Miguel & Rufín, Carlos & Kolk, Ans, 2012. "Bridging the institutional divide: Partnerships in subsistence markets," Journal of Business Research, Elsevier, vol. 65(12), pages 1721-1727.
    12. Yves Fassin, 2012. "Stakeholder Management, Reciprocity and Stakeholder Responsibility," Journal of Business Ethics, Springer, vol. 109(1), pages 83-96, August.
    13. Jeffrey Unerman & Brendan O'Dwyer, 2006. "On James Bond and the importance of NGO accountability," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 19(3), pages 305-318, April.
    14. Y. Fassin, 2009. "Inconsistencies in Activists’ Behaviours and the Ethics of NGOs," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/576, Ghent University, Faculty of Economics and Business Administration.
    15. Maria Seitanidi & Dimitrios Koufopoulos & Paul Palmer, 2010. "Partnership Formation for Change: Indicators for Transformative Potential in Cross Sector Social Partnerships," Journal of Business Ethics, Springer, vol. 94(1), pages 139-161, July.
    16. Kourula, Arno, 2010. "Corporate engagement with non-governmental organizations in different institutional contexts--A case study of a forest products company," Journal of World Business, Elsevier, vol. 45(4), pages 395-404, October.
    17. Yves Fassin, 2010. "A Dynamic Perspective in Freeman’s Stakeholder Model," Journal of Business Ethics, Springer, vol. 96(1), pages 39-49, August.
    18. Stephen Chen & Petra Bouvain, 2009. "Is Corporate Responsibility Converging? A Comparison of Corporate Responsibility Reporting in the USA, UK, Australia, and Germany," Journal of Business Ethics, Springer, vol. 87(1), pages 299-317, April.
    19. Sakarya, Sema & Bodur, Muzaffer & Yildirim-Öktem, Özlem & Selekler-Göksen, Nisan, 2012. "Social alliances: Business and social enterprise collaboration for social transformation," Journal of Business Research, Elsevier, vol. 65(12), pages 1710-1720.
    20. Yves Fassin, 2009. "Inconsistencies in Activists’ Behaviours and the Ethics of NGOs," Journal of Business Ethics, Springer, vol. 90(4), pages 503-521, December.
    21. Daejoong Kim & Yoonjae Nam, 2012. "Corporate Relations with Environmental Organizations Represented by Hyperlinks on the Fortune Global 500 Companies’ Websites," Journal of Business Ethics, Springer, vol. 105(4), pages 475-487, February.
    22. Daniel Arenas & Pablo Sanchez & Matthew Murphy, 2013. "Different Paths to Collaboration Between Businesses and Civil Society and the Role of Third Parties," Journal of Business Ethics, Springer, vol. 115(4), pages 723-739, July.

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