Avoid, acquiesce … or engage? New insights from sub‐Saharan Africa on MNE strategies for managing corruption

Charles E. Stevens and Aloysius Newenham‐Kahindi

Strategic Management Journal, 2021, vol. 42, issue 2, 273-301

Abstract: Research summary Many questions remain about how MNEs manage corruption. Moreover, what is known derives largely from the perspective and experiences of developed country MNEs. To address this limitation, we compare developed country and developing country MNEs' approaches for managing corruption in sub‐Saharan Africa. Through an inductive, qualitative research design, we discover how and why firms engage in “avoidance” and “acquiescence” strategies. We also uncover a novel “engagement” strategy pioneered by developing country firms that involves such tactics as finding innovative substitutes for corrupt activities, leveraging partnerships with governments and other firms, and forming deeper, long‐term relationships in the host country. These findings suggest that MNEs have more room for active agency and more proactive strategies for managing corruption than has typically been assumed in the literature. Managerial summary Multinational firms face challenges in host countries where corruption is common, due to concerns that they will need to engage in corrupt acts in order to survive. Some respond by simply not operating in these countries, while others fall into the trap of engaging in illicit activities. We consider an alternative perspective: that firms may use deeper positive engagement with the host country to reduce pressures to engage in corruption, by building their popular acceptance and strengthening their bargaining power. Although we find that this “engagement” approach was first used by developing country firms, developed country firms have also begun using this strategy. The logic underlying this approach can help managers succeed abroad while reducing the need to get their hands dirty in the process.

Date: 2021
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