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Political connections, the liability of foreignness, and legitimacy: A business historical analysis of multinationals’ strategies in Chile

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dc.contributor.authorBucheli, Marcelo
dc.contributor.authorSalvaj, Erica
dc.date.accessioned2022-05-31T21:15:42Z
dc.date.available2022-05-31T21:15:42Z
dc.date.issued2018
dc.description.abstractResearch Summary: We conduct a historical analysis of the multinational corporations’ strategy of creating connections with a host country’s elite as a way of legitimizing its operations in contexts characterized by long-term political, social, and economic changes. We argue that the success or failure of these strategies depends on (a) the perceived legitimacy of these connections among a host country’s society during times of change and (b) the capability of the multinational’s political connections to shield it from challenges arising when the host country’s social structure is undergoing deep transformations. We outline and follow a business historical approach that combines the theoretical frameworks of international business, strategy, organizational theory, and political science to analyze multinationals operating in Chile’s energy and telecommunications sectors from 1932 to 1973. Managerial Summary: Western multinationals face hard challenges when trying to legitimize their operations vis-à-vis the host country’s societies in emerging and underdeveloped countries. One strategy developed by multinationals to neutralize potential challenges to their legitimacy has been to establish connections with influential members of the host country’s elites. We study how this strategy fares in host countries that are undergoing dramatic political and economic changes. We first argue that overtly maintaining open connections with an elite that is viewed as a relic of an illegitimate past can become a liability. And, second, that highly visible connections are more likely to become a liability in times of political and social change than less visible ones. We illustrate our arguments with a historical study of the strategies followed by American telecommunications and oil multinationals in Chile.es
dc.description.versionVersión Publicadaes
dc.identifier.citationBucheli, M, Salvaj, E. Political connections, the liability of foreignness, and legitimacy: A business historical analysis of multinationals’ strategies in Chile. Global Strategy Journal. 2018; 8: 399– 420. https://doi.org/10.1002/gsj.1195es
dc.identifier.urihttps://doi.org/10.1002/gsj.1195es
dc.identifier.urihttp://hdl.handle.net/11447/6166
dc.language.isoenes
dc.subjectBusiness historyes
dc.subjectChilees
dc.subjectLegitimacyes
dc.subjectLiability of foreignnesses
dc.subjectMNCses
dc.subjectOiles
dc.subjectPolitical strategieses
dc.subjectTelecommunicationses
dc.titlePolitical connections, the liability of foreignness, and legitimacy: A business historical analysis of multinationals’ strategies in Chilees
dc.typeArticlees
dcterms.sourceGlobal Strategy Journales
dspace.entity.typePublication
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relation.isAuthorOfPublication.latestForDiscoveryb93ce63b-237c-4acc-8cb3-0dcebf0a60cb

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