Networks of Influence: Implementing Politically Sustainable Multinational Stakeholder Strategies
Business and society
Business government relations
In a bid to gain stakeholder support for their operations, multinational firms operating in politically uncertain environments often inappropriately apply a rational financial approach to a sociopolitical problem. Using the tools of network theory, I present an alternative sociopolitical approach to gaining stakeholder support by engendering cooperative relations and increasing tie formation while minimizing conflict. This dissertation comprises three paper chapters. The first, theory, paper chapter outlines a theory of influence exploring how the firm's strategic position within the network of stakeholders affords it positional benefits of information and reputation, while also highlighting the costs of exposure to pre-existing conflict and the fostering of conflict through asymmetric relations. The second, empirical, paper chapter explores how firms can best manage altercentric and egocentric uncertainty in the nonmarket environment and compares the efficacy of the ex ante strategies that the firm can use to manage both types of uncertainty. I hypothesize and find that through strategic network positioning that affords it information, the firm can manage its egocentric uncertainty; and, by managing how it is perceived through its associations, the firm can also manage stakeholders' altercentric uncertainty. When both strategies are assessed together, I find greater returns to firms in terms of engendering cooperation, minimizing conflict and forming ties by managing altercentric uncertainty through strategic associations. In the third, also empirical, paper chapter, I use insights from structural balance theory to explore the relationship between dyadic structure and triadic closure among networks of actors in the sociopolitical context. I outline and test hypotheses of four types of structural homophily of the actors in the triad—access to resources, status, likeability and number of ties (popularity)—on the likelihood of the closure of that triad. I find that a link that closes an open directed triad is more likely when the actors of the triad have different access to resources, different status, and similar numbers of ties to other actors. I also find that likeability among actors in the triad has no impact on the likelihood of closing that triad. My empirical papers test the relationships among firms and stakeholders in a novel hand-coded database of 51,754 stakeholder events linking 4,623 unique stakeholders of a population of 19 publicly traded gold mining firms which operate 26 mines in 20 largely emerging economies.