Abstract:

The United Nations Sustainable Development Goals (SDGs) are changing the way multinational
enterprises (MNEs) engage with host governments. SDGs present a unique opportunity for MNEs to build
influence by assisting governments in attaining the social needs of a host country. However, we lack a
clear understanding of how MNE subsidiaries convert their social responsibility activities into political
influence in politically uncertain countries—i.e., where the priorities of political actors frequently diverge.
Using a multiple case study of four mature Western European MNE subsidiaries in Indonesia, we uncover
SDG-directed investments as the primary mechanism by which MNEs translate the increasing global
focus on corporate social responsibility into more effective host country nonmarket strategies. Our study
elucidates three types of SDG-directed nonmarket strategies— SDG-directed cross-sector partnership,
SDG-directed conflict management, and SDG-directed constituency building—that speak to the
idiosyncratic, often conflicting priorities of district and central governments. We also advance the microfoundations
of nonmarket strategy literature by explaining how key actors within the MNE subsidiary
convert SDG-directed investments into political dividends.

Please choose your submission type: Full Paper

Primary Track: International Business and International Management

Keywords: Internationalization: strategy,Internationalization: headquarters, subsidiaries,International: business,International: management

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Dr. Felix Arndt