The effect of institutional turbulence on multinational enterprises' strategies in resource-intensive host markets

Firms have the ability to be influenced by their institutions and in turn have to capability to influence them. This relationship can become deeply complicated and nuanced in emerging economies where the quality of institutions is low and is worsened when the country is experiencing extreme turbulence in the form of conflict. This dissertation intends to discuss how firms may be impacted by institutions in resource intensive host markets, as well as their effect on fragile conflict dynamic ecosystems that existed prior to their arrival. Mozambique is used as a case study. The northern province, where internationalisation of foreign oil firms has occurred, has been impacted by a violent insurgency, causing the firms to declare force majeure (FM). The study aims to theoretically add to conflict dynamics in international business literature, through demonstrating the overall impact of MNEs in fragile ecosystems. The development and quality of institutions is what creates an ecosystem within a country. Therefore, focus will also be placed on the role of institutions in global strategy, and specifically how they played a significant part in determining the impact of an MNEs impact on the conflict ecosystem within Mozambique. The study concludes that the relationships in the business ecosystem are put under strain due to the unique insurgency in Mozambique, resulting in a collapse of business operations. This research is an inductive, exploratory, qualitative study, using multiple case studies of extractive multinational enterprises (MNEs) that have been operational in the northern province of Mozambique, and have been so since the discovery of gas in the area. The findings presented in this study were based on thirteen interviews, with participants being from either the MNEs in the area, the government or experts on the matter. There are many areas in which this research can make a significant contribution: the main are conflict dynamics, internationalisation into emerging economies, institutions within global strategy

Grantor

Graduate School of Business (GSB)

Year dc:date.issued

2023

Author dc:creator

• Butcher, Francis Hope

Advisor dc:contributor.advisor

• Luiz, John

• International Management

Handle dc:identifier.uri

http://hdl.handle.net/11427/39741

OAI identifier oai:identifier

oai:open.uct.ac.za:11427/39741