Multinational Corporations (MNC’s) legitimation within Multi-stakeholder Initiatives (MSI)
: an investigation into Oil MNC’s in the Nigerian Extractive Industries Transparency Initiative

  • Olubukola Aluko

Student thesis: Doctoral Thesis

Abstract

This study investigates the management of multinational corporations' (MNCs) legitimacy in the host countries in which they operate. Building on previous research on the pluralistic context of organizational legitimacy, the study seeks to understand this from the perspective of MNCs. For MNCs, legitimacy provides a means by which they can access resources necessary for their profitability and survival, rather than being a tangible resource in and of itself (Zaheer and Mosakowski, 1997). In this context, the study focuses on the factors that drive MNC legitimacy management and how they result in MNC legitimation. MNCs operate in a variety of diverse country contexts, and as such, an understanding of legitimacy must consider that factors may differ across these host nations' contexts.

In operating within host environments, MNCs are subject to a variety of institutional environments, including arrangements, policies, and national requirements that govern the way business is conducted and impact MNCs' ability to comply with these conditions, which is crucial to their ability to manage their legitimacy (Kostova and Zaheer, 1999; Makino et al., 2004; Rosenzweig and Singh, 1991; Westney, 1993; Zaheer and Zaheer, 1997: 78). As the responses MNCs offer to the institutional landscapes of their host environments are crucial "determinants of success and failure..." (Henisz & Swaninatham, 2008: 539).

To achieve its objectives, this study included a literature review on MNCs' interactions with legitimacy and its use in the complex environments in which they operate, introducing the concept of multi-stakeholder initiatives (MSIs) as sources of diverse stakeholders with competing demands that often characterize an actor's management of legitimacy. The study employed a qualitative research methodology, including in-depth interviews with key stakeholders of a selected MSI (NEITI), comprising both private and public actors. Analysis of the data, using coding and building of a data structure as supported by Gioia et al., (2013) and further presented the findings on the MNCs' legitimation process using a combination of temporal and narrative strategies (Langley, 1999).

The findings support the importance of compliance in legitimation as a key strategy for legitimacy management in this context (Deephouse, 1996; Fombrun and Shanley, 1990). Oliver argues that compliance may be used to "demonstrate the organization's worthiness and acceptability" (Oliver, 1991: 158). The study also extends Oliver's concept of Compliance by introducing the idea of selective compliance as a response by MNCs that can also result in acquiescence, depending on the specific context in which it is applied. The findings on MNCs' strategic responses and the manner in which they emerge contribute to our understanding of MNCs' legitimation processes within MSIs.
Date of Award5 Dec 2024
Original languageEnglish
SupervisorEshani Beddewela (Co-Supervisor) & Lianghui Lei (Co-Supervisor)

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