The Role of Non-market Strategies in Establishing Legitimacy: The Case of Service MNEs in Emerging Economies

Abstract

In this article, we examine the mechanisms of the corporate political activities of service multinational enterprises (SMNEs) operating in an emerging economy. Reporting the findings of qualitative interviews with key decision-makers in Ukraine, the article illuminates how SMNEs operating in turbulent institutional contexts can enact various corporate political strategies, including social responsibility activities, to mitigate market costs and develop legitimacy. The findings elucidate how government agencies and institutions may also invoke corporate social responsibility (CSR) as a strategy. The article makes key contributions; firstly, it underscores the complementary dynamics that exist between CPA and CSR strategies in host markets characterised by weak and incomplete institutions. Secondly, the article contributes to the relatively under-explored nature of service sector MNEs operating in such institutional contexts.