Multinational Enterprises and Sustainable Development

Creating competitive advantage by serving marginalised communities: UK multinationals and inclusive development in Latin America

A collage of images from a Brazilian favelo

Lead Academic: Professor Pervez Ghauri (Professor of International Business)

Project Summary

Professor Pervez Ghauri has secured a major ESRC-FAPESP grant worth around £1 million for the following project: “Creating competitive advantage by serving marginlaised communities: UK multinationals and inclusive development in Latin America.

Pervez Ghauri
E-SDGs-Poster

The purpose of this study is to explore how multinationals from advanced markets can contribute towards the achievement of the United Nations' Sustainable Development Goals (SDGs) by addressing the needs of underserved populations and marginalised communities in emerging markets, while also providing expectations of long-term economic return to their shareholders. Considering the increased awareness of doing good while doing well, MNEs are beginning to realise that profit maximization is not the only route to success. They need to improve their image and demonstrate that their existence is beneficial for the society in general, that is a more long-term route to achieve a competitive advantage.

The research intends to uncover the mechanisms and actions required by these companies to serve marginalised communities and to create a positive image in the society. Building on stakeholder theory, social entrepreneurship and value creation literature, it will offer a qualitative cross-country study in Latin America. The focus is specifically on the experiences of UK/EU multinationals in Brazil and Colombia. 

Key investigators are well-known international business scholars and experts with numerous relevant high-level publications. The UK team will contribute with theoretical framing, sharing research and training skills with local researchers, taking the lead in the analysis of data, producing actionable documents for stakeholders, and drafting academic publications. The Brazilian team will provide in depth knowledge of the research context, drawing on wider networks with businesses locally and close engagement with local societies while collecting data. The project will provide guidelines for multinationals and other stakeholders as to how inclusive development can be achieved.

The Project

The aim of this study is to explore how multinational enterprises from the United Kingdom can generate profit whilst creating value for marginalised communities and reduce inequalities. Our project is particularly relevant, given that it has been argued that most of the business and entrepreneurial initiatives targeted at disadvantaged communities have been undertaken by NGOs or by local small and medium enterprises; although some local large companies have successfully served poorer consumers, it is rare to find multinationals from advanced markets actively engaging with poorer communities. Yet, a good opportunity for companies to satisfy both their quest for economic performance and to make a contribution towards sustainable development lies in addressing the relatively untapped needs of underserved populations in emerging markets.

To date, there has been little research conducted on how multinationals from advanced markets engage with local stakeholders in Latin American countries, although it has been emphasized by United Nations that collaborative efforts by businesses, society and governments are necessary to achieve sustainable development goals. The specific research questions addressed are:

  1. How can multinationals from advanced markets contribute to the achievement of SDGs by creatively serving disadvantaged populations in emerging markets, and create competitive advantage at the same time?
  2. What are the actions, mechanisms and strategies employed by these companies to orchestrate resources and coordinate multi-actor perspectives to address the needs of underserved populations and include these segments in the social and economic ecosystem?

We aim to build on stakeholder theory, social entrepreneurship, and value creation literatures to create a framework, before collecting primary data to uncover the mechanisms and actions required and employed by multinationals to serve disadvantaged populations, and the role of multiple stakeholders (e.g., NGOs, policy makers, local businesses, and consumers) in this process, with a cross-country comparison between Brazil and Colombia. The project thus seeks to contribute with an integrated theory by uncovering ways by which MNEs can achieve the following objectives:

  • Contributing to sustainable development and achievement of the SDGs.
  • Value creation for the fulfilment of needs of underserved consumers and empowerment of local communities.
  • Value capture through (long-term) economic return to tackle inequalities in the society and to achieve a sustainable competitive advantage for companies involved. 

Project Partners

This is a joint project between University of Birmingham, Manchester University and FGV in Brazil. Professor Ghauri, is the lead partner (PI) for the overall project.

Axele GiroudProfessor Axele Giroud
Jorge CarneiroAssociate Professor Jorge Carniero

 

Publications

The results of this project will be published in top level journals and a book. However, members of the project group have been working on this topic for several years and have published extensively around this topic. Some of the publications are as follows:

Books

Ghauri, P., Fu, X., & Vataanen, J. (2018), Multinational Enterprises and Sustainable Development,  London: Emerald.

Hadjikhani, A., Elg, U. & Ghauri, P. (2012), Business, Society and Politics: Multinationals in Emerging Markets, Bingley: Emerald, 2012

Journal articles

Azevedo, G., Carneiro, J., Rodriguez, C., & Gonzalez-Perez, M. A. (2020). Rebalancing society: Learning from the experience of Latin American progressive leaders. Journal of Business Research, 119: 511-521. (ISSN = 0148-2963, https://doi.org/10.1016/j.jbusres.2020.08.007

Carneiro, J., Matos, N. & Husted, B. (2015). Free markets and social inclusion: Toward a common goal. Journal of Business Research, 68(2), 173-176, 10.1016/j.jbusres.2014.09.025

Elg, U., Ghauri, P. & Schaumann, J. (2015), “Internationalization through socio-political relationships: MNEs in India”, Long Range Planning, 48/5: 334 - 345.  

Fu, X., Ghauri, P. & Fu, M. (2022), Platform based business model and entrepreneurs from base of the pyramid”, Technovation, January, 102451.

Gentile-Lüdecke Simona and Giroud Axèle (2012), ‘Knowledge transfer from TNCs and upgrading of domestic firms: A study from the Polish automotive sector’, World DevelopmentVol 40(4), 796–807, http://dx.doi.org/10.1016/j.worlddev.2011.09.024  

Ghauri, P. & Wang, F. (2018), “The Impact of Multinational Enterprises on Sustainable Development and Poverty Reduction: A Research Framework”, in Ghauri, Fu and Vataanen (editors), Multinational Enterprises and Sustainable Development, Bingley: Emerald, pp. 13-40.

Ghauri, P. & Yamin, M. (2009), “Revisiting the Impact of Multinational Enterprises on Economic Development”, Journal of World Business44(2), pp. 105-107.

Ghauri, P., Fu, X. & Vataanen, J. (2018), “Multinational Enterprises, Sustainable Development and Poverty Reduction: Past, Present and Future, in Ghauri, Fu and Vataanen (Editors), Multinational Enterprises and Sustainable Development, Bingley, Emerald, pp.196-225

Ghauri, P., Fu, X., & Vataanen, J. (2018), Multinational Enterprises and Sustainable Development,  London: Emerald.

Ghauri, P., Hadjikhani, A. & Elg, U. (2012), “The Three Pillars: Business, State and Society: MNCs in Emerging Markets”, in Hadjikhani, Elg and Ghauri (editors), Business, Society and Politics: Multinationals in Emerging markets, Bingley: Emerald, pp. 3 – 16.

Ghauri, P., Tasavori, M. & Zaefarian, R. (2014), “Internationalization of Service Firms Through Corporate Social Entrepreneurship and Networking”, International Marketing Review, 31(6) 576-600.

Giroud Axèle (2012), ‘Linkages studies as support for Spillover studies’, The European Journal of Development ResearchVol 24(1), 20-25, http://dx.doi.org/10.1057/ejdr.2011.48

Giroud Axèle and Ivarsson Inge (2020) ‘World Investment report 2020: International Production Beyond the Pandemic.’ Journal of International Business PolicyVol. 3(4). http://dx.doi.org/10.1057/s42214-020-00078-2-

Giroud Axèle and Jacqueline Salguero-Huaman (2019) ‘Investment in Agriculture and Gender Equality: Corporate Strategies and Policies in Developing Countries’, Transnational Corporations26(3), 89-114.

Giroud Axèle, Jindra Björn and Philipp Marek (2012) ‘Heterogeneous FDI in Transition Economies - A novel approach to assess the developmental impact of backward linkages’, World DevelopmentVol 40(11), 2206-2220,  http://dx.doi.org/10.1016/j.worlddev.2012.03.018 

Jindra Björn, Giroud Axèle and Joanna Scott-Kennel (2009), ‘Foreign subsidiaries’ roles and vertical linkages: The missing link? A study of MNEs in Eastern Europe’. Journal of World Business, Vol 44 (2), pp. 167-179

Park, B-I., & Ghauri, P. (2013), “Doing right investing right: socially responsible investing and shareholder activism in the financial sector”, Business Horizon, 56/6: 703-714

Park, B-I., & Ghauri, P. (2015), “Determinants influencing CSR practices in small and medium sized MNEs subsidiaries: A stakeholder perspective”, Journal of World Business 2: 192 – 204

Tasavori, M., Ghauri, P. & Zaefarian, R. (2016), “Entering the Base of the Pyramid Market in India: A Corporate Social Entrepreneurship Perspective”, International Marketing Review,  33(4) 555-579

Tasavori, M., Ghauri, P., Zaefarian, R. (2015), “The creation view of opportunities at the base of the pyramid”, Entrepreneurship and Regional Development”, 27/1-2: 106 -126

Zaefarian, R. Ghauri, P. & Tasavori, M. (2015),  “A Corporate Social Entrepreneurship Approach to Market-Based Poverty Reduction”, Emerging Markets Finance and Trade, 51:2, 320-334

Book chapters

Azevedo-Rezende, Lígia & Carneiro, Jorge (2021). Responsabilidade Social Corporativa e os Objetivos de Desenvolvimento Sustentável: O Papel dos Conselhos [Corporate Social Responsibility and the Sustainable Development Goals: The Role of Boards]. In Yoshida, Consuelo; Vianna, Marcelo & Kishi, Sandra (coords.). Finanças Sustentáveis: ESG, Compliance, Gestão de Riscos e ODS [Sustainable Finance: ESG, Compliance, Risk Management and SDGs]. ABRAMPA, pp. 24-41, ISBN 978-65-991329-2-6.

Ghauri, P., Fu, X. & Vataanen, J. (2018), “Multinational Enterprises, Sustainable Development and Poverty Reduction: Past, Present and Future, in Ghauri, Fu and Vataanen (Editors), Multinational Enterprises and Sustainable Development, Bingley, Emerald, pp.196-225

Ghauri, P. & Wang, F. (2018), “The Impact of Multinational Enterprises on Sustainable Development and Poverty Reduction: A Research Framework”, in Ghauri, Fu and Vataanen (editors), Multinational Enterprises and Sustainable Development, Bingley: Emerald, pp. 13-40

Ghauri, P., Hadjikhani, A. & Elg, U. (2012), “The Three Pillars: Business, State and Society: MNCs in Emerging Markets”, in Hadjikhani, Elg and Ghauri (editors), Business, Society and Politics: Multinationals in Emerging markets, Bingley: Emerald, pp. 3 – 16

Contributions to Reports by International Organisations

World Bank (2017) The Impact of Larger-Scale Agricultural Investment on local Communities: Updated Voices from the Field, Washington, U.S., with William Speller, Hafiz Mirza, Jacqueline Salguero-Huaman, Grahame Dixie and Asuka Okumura

UNCTAD (2014) Investment by TNCs and Gender: Preliminary Assessment and Way Forward, Geneva, Switzerland. UNCTAD/WEB/DIAE/IA/2014/1

 

Events


6 April 2022

MNEDEVELOP Project - Birmingham Workshop     View the workshop programme
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