The Advantage of Outsiderness: MNEs’ Responses to Decolonization in Historical Perspective

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    This paper examines the political strategies of two German firms—Siemens’ and I.G. Farben—in interwar India as a way to consider how multinational enterprises (MNEs) deal with political risk. The interwar period was characterized
    by rising political risks throughout the global economy, as conflicts between developed national economies rose in the wake of World War I, as anti-­‐colonial and communist movements gained ground, and international monetary
    instability increased. Yet, far from retrenching from the global economy, German MNEs capitalized on the growing political risks by developing political strategies and cultivating political capabilities that allowed them to successfully pursue international markets in geopolitically turbulent times. Identifying their mechanisms and viewing them longitudinally shows MNEs as political actors, not just adapting and dealing with novel political contexts
    but actively shaping political identities and processes of legitimization. This paper uses this case to argue for a rethink of political risk in international business, to regard it as a source of political opportunities that multinationals
    can capitalize on, and not exclusively as a source of liabilities that need to be managed.
    Original languageEnglish
    Publication date2016
    Number of pages36
    Publication statusPublished - 2016
    EventHarvard Business School, Seminar Strategy Unit - Harvard Business School , Boston, United States
    Duration: 26 Apr 201626 Apr 2016


    SeminarHarvard Business School, Seminar Strategy Unit
    LocationHarvard Business School
    Country/TerritoryUnited States
    Internet address


    • Political risk
    • Multinationals
    • Decolonization

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