Navigating turbulent waters: A literature review of socio-political risks and multinational enterprises’ nonmarket strategies

Amidst an increasingly turbulent global environment, multinational enterprises (MNEs) face a wide range of socio-political risks (SPRs) that are complex and multifaceted, e.g. geopolitical conflicts, rising protectionism or anti-globalization sentiment. They must respond strategically to remain competitive. In this systematic literature review, we propose a novel way to analyse risks, along geographical and temporal dimensions. We synthesize findings from 111 empirical peer-reviewed articles to identify how and why MNEs adopt nonmarket strategies (NMS) in contexts where risks prevail. Our findings show MNEs combine adaptive, additive and transformative strategies to address ongoing risks, but focus on adaptive approaches when faced with abrupt challenges. The distinction applies across geographic dimensions, with a tendency for firms to adopt embedded-oriented NMS for within-country SPRs, and cross-border balancing-oriented NMS to respond to cross-country SPRs. We contribute to the literature by enhancing conceptualization of SPRs and offering a comprehensive understanding on the types and effectiveness of NMS used by firms to address political and social risks. Our review enhances theory by proposing an integrated conceptual framework and directions to guide future research.