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Adapting and sustaining operations in weak institutional environments: A business ecosystem assessment of a Chinese MNE in Central Africa

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Abstract

Multinational enterprises (MNEs) sometimes pursue opportunities in largely uncharted, distinctive institutional environments. How do these firms sustain operations in such settings? We explore how MNEs tailor and maintain operations in institutionally weak, precarious, and challenging host-country environments, such as those devastated by conflicts. We draw on the business ecosystem framework and analyze a qualitative longitudinal case study of a Chinese state-owned MNE that entered and developed its operations in the Democratic Republic of Congo (DRC) in Central Africa. Our findings indicate that after entry, the MNE sustained its operations in the DRC by engaging in collective actions and coevolving with key stakeholders within its business ecosystem. These stakeholders included the home and host governments, state-owned enterprises, privately owned enterprises, and local communities. Our qualitative data further suggest that the MNE’s business ecosystem evolved through three stages—exploring, establishing, and embedding—and that within this ecosystem, the key stakeholders also coevolved with the MNE by adopting new roles over time.

Résumé

Les entreprises multinationales (EMN) recherchent parfois des opportunités dans des environnements institutionnels largement inexplorés et particuliers. Comment ces entreprises soutiennent-elles leurs opérations dans de tels contextes ? Nous explorons comment les EMN adaptent et maintiennent des opérations dans des environnements institutionnels de pays d’accueil faibles, précaires et difficiles, comme ceux dévastés par des conflits. Nous nous appuyons sur le modèle de l’écosystème d’affaires et analysons une étude de cas longitudinale qualitative d’une EMN d’État chinoise qui est entrée et a développé ses opérations en République démocratique du Congo (RDC) en Afrique centrale. Nos résultats indiquent qu’après son entrée sur le marché, l’EMN a maintenu ses opérations en RDC en s’engageant dans des actions collectives et en co-évoluant avec les principales parties prenantes au sein de son écosystème d’affaires. Ces parties prenantes comprenaient les gouvernements d’origine et d’accueil, des entreprises d’État, des entreprises privées et des communautés locales. Nos données qualitatives suggèrent en outre que l’écosystème d’affaires de l’EMN a évolué en trois étapes - exploration, établissement et intégration - et que, au sein de cet écosystème, les principales parties prenantes ont également co-évolué avec l’entreprise multinationale en adoptant de nouveaux rôles au fil du temps.

Resumen

Las empresas multinacionales (EMN) a veces buscan oportunidades en entornos institucionales particulares en gran parte inexplorados. ¿Cómo estas empresas mantienen operaciones en dichos entornos? Exploramos como las EMN adaptan y mantienen operaciones en entornos de país institucionalmente débiles, precarios y desafiantes, como los devastados por conflictos. Nos basamos en el marco del ecosistema empresarial y analizamos un caso de estudio longitudinal cualitativo de una empresa multinacional china de propiedad estatal que entró y desarrolló sus operaciones en la República Democrática del Congo en África Central. Nuestros hallazgos indican que después de la entrada, la empresa multinacional mantiene tus operaciones en la República Democrática del Congo participando en acciones colectivas y co-evolucionado con los grupos de interés clave dentro de su ecosistema empresarial. Estos grupos de interés incluyen los gobiernos del país de origen y del anfitrión, las empresas estatales, las empresas privadas, y las comunidades locales. Nuestros datos cualitativos además sugieren que el ecosistema empresarial de la empresa multinacional evolucionó mediante tres etapas – exploración, establecimiento e integración- y que dentro de este eco-sistema, los grupos de interés clave también co-evolucionaron con la empresa multinacional al adoptar nuevas funciones a lo largo del tiempo.

Resumo

Empresas multinacionais (MNEs) por vezes buscam oportunidades em ambientes institucionais distintos e em grande parte desconhecidos. Como essas empresas mantêm operações nesses ambientes? Exploramos como MNEs adaptam e mantêm operações em países de destino cujos ambientes institucionais são fracos, precários e desafiadores, como aqueles devastados por conflitos. Nós nos baseamos no modelo de ecossistema de negócios e analisamos um estudo de caso qualitativo longitudinal de uma empresa multinacional chinesa de propriedade estatal que entrou e desenvolveu suas operações na República Democrática do Congo (DRC) na África Central. Nossas descobertas indicam que, após a entrada, a MNE manteve suas operações na DRC pelo envolvimento em ações coletivas e coevolução com as principais partes interessadas em seu ecossistema de negócios. Essas partes interessadas incluíam os governos de origem e de destino, empresas estatais, empresas privadas e comunidades locais. Nossos dados qualitativos ainda sugerem que o ecossistema de negócios da MNE evoluiu por meio de três estágios - exploração, estabelecimento e incorporação - e que dentro desse ecossistema, os principais interessados também coevoluíram com a MNE adotando novos papéis ao longo do tempo.

摘要

跨国公司(MNEs)有时会在很大程度上在未知的、独特的制度环境中寻求机会。这些公司如何在这样的环境中持续运营呢?我们探讨跨国公司如何在体制薄弱、不稳定和具有挑战性的, 例如那些被冲突破坏了的东道国环境里, 定制和维持公司运营。我们利用商业生态系统框架, 用一家中国国有跨国公司的定性纵向案例研究进行了分析, 该公司进入中非刚果民主共和国(DRC)并开发了相关业务。我们的研究结果表明, 进入后, 该跨国公司通过参与集体行动并与其商业生态系统内的主要利益相关者共同发展, 在刚果民主共和国持续运营发展。这些利益相关者包括本国和东道国政府、国有企业、私营企业和当地社区。我们的定性数据进一步表明, 跨国公司的商业生态系统经历了三个阶段的演变 — 探索, 建立和嵌入 — 并在这个生态系统中, 主要利益相关者也通过随着时间的推移采纳新角色而与该跨国公司共同发展。

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Acknowledgements

We thank Alain Verbeke, Editor-in-Chief, Mary Teagarden, Action Editor, Anne Hoekman, Managing Editor, and the two anonymous reviewers for their insightful feedback and guidance throughout the review process. We also thank Weihai International Economic and Technical Cooperative Co., Ltd and its business ecosystem partners for providing us with data. This research is also supported by the National Natural Science Foundation of China (Grant no. 71872098, 71402051), the research project (No. 2018THUISOE07) of the institute for state-owned enterprises, Tsinghua University and the Beijing Excellent Talent training Program. In addition, we thank Florida International University College of Business and FGV-Ebape for their support to this research project.

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Authors and Affiliations

  1. College of Business, Florida International University and FGV-Ebape, 11200 SW 8th Street, MANGO #437, Miami, FL, 33199, USA

    Ronaldo Parente

  2. Institute of Economics, School of Social Sciences, Tsinghua University, Beijing, 100084, China

    Ke Rong

  3. Institute for State-Owned Enterprises Tsinghua University, Beijing, 100084, China

    Ke Rong

  4. Management Department, College of Business, University of Massachusetts Lowell, 1 University Avenue, Lowell, MA, 01854, USA

    José-Mauricio G. Geleilate

  5. Management and International Business Department, College of Business, Florida International University, 11200 SW 8th Street, MANGO Building, Miami, FL, 33199, USA

    Everlyne Misati

Authors
  1. Ronaldo Parente
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  2. Ke Rong
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  3. José-Mauricio G. Geleilate
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  4. Everlyne Misati
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Corresponding author

Correspondence to Ke Rong.

Additional information

Accepted by Mary Teagarden, Area Editor, 30 July 2018. This article has been with the authors for two revisions.

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Parente, R., Rong, K., Geleilate, JM.G. et al. Adapting and sustaining operations in weak institutional environments: A business ecosystem assessment of a Chinese MNE in Central Africa. J Int Bus Stud 50, 275–291 (2019). https://doi.org/10.1057/s41267-018-0179-z

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  • DOI: https://doi.org/10.1057/s41267-018-0179-z

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