Results

Abstract

This subchapter presents the results of the first study, which sought to answer, firstly, to what extent and how is corporate diplomacy in the UAE performed as engagement with its social environment? and, secondly, to what extent and how is corporate diplomacy in the UAE used to gain organizational legitimacy?

7.1 The Perspectives of MNCs on Corporate Diplomacy

This chapter is derived in part from an article published in Journal of Public Relations Research by Marschlich, S., & Ingenhoff, D. (2021a). The Role of Public Relations in Corporate Diplomacy: How Relationship Cultivation Increases Organizational Legitimacy. Journal of Public Relations Research, available online: https://www.tandfonline.com/doi/full/10.1080/1062726X.2021.1981332 and in Public Relations Review as Marschlich, S., & Ingenhoff, D. (2021b). Stakeholder Engagement in a Multicultural Context: The Contribution of (Personal) Relationship Cultivation to Social Capital. Public Relations Review, 47(4), 102091, available online: https://doi.org/10.1016/j.pubrev.2021.102091.

This subchapter presents the results of the first study, which sought to answer, firstly, to what extent and how is corporate diplomacy in the UAE performed as engagement with its social environment? and, secondly, to what extent and how is corporate diplomacy in the UAE used to gain organizational legitimacy?

In the interviews, the MNCs explained that corporate diplomacy is performed with different actors in the host country’s environment, including governmental actors and authorities, educational institutions, other MNCs, and NPOs. Moreover, the companies mentioned that they seek to address and involve community members, such as youths, disadvantaged people, employees, and the media. In this way, the interviewees firstly pointed to actors they collaborate, where corporate diplomacy is particularly reflected in partnerships. The respondents highlighted the role of (personal) relationship cultivation and building networks. Secondly, corporate diplomacy was described as civic and employee engagement, which seems less strategic. Lastly, the interviews emphasized the role of the corporate culture and the UAE’s multiculturalism in affecting corporate diplomacy.

In the following, different perspectives on corporate diplomacy related to the different actors within the host country, are presented. By doing so, the role of the specific expectations and values and how the MNCs deal with these are portrayed, given that organizational legitimacy perceptions emerge from the individual, societal, and governmental expectations of the organization and its activities and the degree to which they are met.

7.1.1 Engagement with the Government: Alignment with the National Agenda

The interviewees explained that in the UAE, the key actor in corporate diplomacy is the government, stating that a large extent of the initiatives is planned and implemented by the MNCs in collaboration with the UAE Government: “First and foremost, there is the government and the regulators that you make sure that we engage with” (EC).¹ Corporate diplomacy as governmental engagement can include various topics such as engagement in public health, environmental issues, or education. One respondent emphasized the government’s role by referring to corporate diplomacy as a “B2H approach—Business to His Highness” (EC). The reasons making it necessary to include the government are, first, the permission to access the local community. Due to governmental restrictions, MNCs cannot directly engage with local community members without permission or government involvement. Second, the engagement with the government comes with increased recognition of corporate diplomacy; third, access to a broader network, and; last, favorable conditions emerging from long-term relationships. All these reasons are related to the social and regulative power of the government and its impact on corporate activities. Moreover, participation in governmental issues comes with higher media recognition and endorsement, as the interviewees declared.

When you talk about the power of the government, I mean, they make life very easy for people. I have lived here for 15 years, and I love it. […] And I think most people accept that they want to be here, and I will take the best of this, which is good for me. (PRA)

Because the only way to get visibility and recognition is through the government, which is, let’s say, endorsing your initiatives and endorsing your solutions, endorsing your positions, and then which help other community members to look at you as, ok, you are a member of the community. (EC)

The MNCs further pointed to the interdependence between the government and foreign companies. Not only do the MNCs profit from public-private partnerships in terms of higher reach and beneficial outcomes, but the government does as well. According to the interviewees, since the government made several commitments to its citizens to improve social welfare in a comparatively short time, the country depends on the expertise and knowledge of foreign MNCs concerning societal issues. One respondent claimed that corporate diplomacy initiatives with governmental involvement are a win-win situation due to the synergy effects, and partnerships are widespread in the UAE, mostly because they are inherent in the country’s culture and history.

They [governmental entities] need partners to help step in because […] neither the private sector alone nor the NGOs or the government can do this individually. It has to be done together. So, it is much easier to go and talk to them because their commitment is there, and we say we need x, y, z to help us make it happen. (EC)

There is a great thing about the UAE, the UAE was built on partnerships between the government and the private sector, so it is not hard to sell. So, the government is absolutely open to private-public partnerships. So, it is not like closed doors; the doors will always be open for every multinational. (PRA)

Concerning the specific expectations of the government, the companies stated that the government awaits their contribution to the national priorities set in the UAE political agenda. In this regard, the MNCs often stated that they aim to align with the political agenda as much as possible. MNCs particularly seek to demonstrate their commitment to the national citizens, the Emiratization program, and other issues contributing to the nation’s societal and economic progress. The respondents highlighted that the national agenda, communicated as the “Vision 2021” for the whole country, is clear and encourages the engagement of private companies, making it easier for the MNCs to “follow.”

The vision that they have and that they preach […] is something that is very special to the UAE. And that vision is communicated often and clearly and creatively to engage both the public and businesses to follow that vision and support the vision. (EC)

Apart from the national agenda, often serving as a significant point of reference for planning corporate diplomacy, the interviewees explained that attending forums and events offered by the government helps them foresee governmental priorities and allows them to engage in an ongoing dialog with governmental actors. Lastly, the companies pointed to emerging regulatory frameworks that, to a certain extent, encourage or even urge them to engage in local societal issues. However, as the respondents further explained, when a company engages with governmental actors and is open to their feedback, it can identify their expectations accordingly, which may provide the company with a pioneering and leading role compared to others not following such course of action.

They [governmental institutions] are still developing [this policy and] […] how this is going to look like, and if it’s mandatory or not. But, as I just put together what we did in terms of corporate social activities last year, we are quite regularly asked, one way or the other, to report on what we do. And, of course, this helped. If we then, a week later, sit with the government again, we can also show that. (EC)

This is where, I mean, the engagement helps because we can only know what the expectations are, what is their feedback when we engage with them. So, for example, on the government side, it’s about abiding by regulations and leading other companies. You know, as [company name], we want to lead and take action, maybe faster, so that other companies follow, and we gain that attraction. Yes, they are expecting us to be there; they are expecting us to be feasible, to showcase, to contribute. (EC)

7.1.2 The Role of Relationship Cultivation, Networks, and Strategic Alliances

According to the interviews, corporate diplomacy with the government or corporate partners often builds on continuous long-term relationship cultivation, highly relevant for strategic reasons. First, the long-term orientation of relationships with local institutions, including the government, local NPOs, and local companies, is inherent in the UAE culture. The main goal of long-term relationships is building trust, loyalty, and mutual respect, which were declared essential values for doing business with the locals. The respondents did not emphasize how exactly trust and loyalty are built, but frequently stated that it automatically emerges through long-lasting relationships and networks.

You start by showing “that you are doing great and you are doing well for the community. […] It goes to your key stakeholders like the government, regulators, and others because you need them. Next time, you need to discuss to be open and transparent. […] And then, you have this kind of domino effect because it further impacts potentially or directly a lot of other stakeholders and […] because you build trust, and in this region, you really need to go by the halo effect. You start from a very specific project, but then it has a bigger impact because, again, it is a region where networks and relationships are very important. So, trust is something you can transfer through your network. (EC)

Second, relationship-building with established institutions, mainly the UAE Government or individuals that are close relatives or friends of governmental actors, was explained as increasing the companies’ networks. For instance, when a foreign company works with the government, it gains access to relevant persons in the NPOs and vice versa, as was clarified by the interviewees. Local NPOs, regulated mainly by the local government, are essential for corporate diplomacy activities since they already have the infrastructure to improve social well-being and the knowledge of the local community. Moreover, governmental actors and NPOs such as “Dubai Cares,” a local charity organization, are more trusted and credible because the local citizens and local companies are more familiar with them, according to the interviewees’ statements. In this regard, good relationships are the key to broadening the companies’ networks and trustworthiness regarding the foreign MNCs’ corporate diplomacy efforts. The UAE was referred to in the interviews as a “relationship society,” in which trust and loyalty are important factors.

They put their name. That is important because it gives consumers greater credibility. Otherwise, it is just seen as a marketing activity versus an important activity. That is important for the country, you know. That element of credibility is very important. So, we do that school campaign as I told you, signal, lifebuoy, handwashing. (EC)

Relationship cultivation can build on informal and direct or formal communication. For the latter, company representatives explained the relevance of the Memorandum of Understanding (MOU), a signed agreement between the MNC and governmental actors. MOUs are common in the UAE and define and specify the conditions and activities of a given collaboration. MOUs can be unspecific initially, but building on reoccurring meetings, tasks, and objectives, they become more explicit and can be redefined according to the interests of the actors involved. In this way, the respondents clarified that MOUs build the framework for most partnerships with the government—and also with other actors. MOUs serve as a foundation for corporate diplomacy aimed at gaining a mutual understanding of the purpose of the collective initiatives.

Regarding informal engagement, the respondents explained the role of “Majlis meetings,” a cultural particularity in the UAE where participants mix business topics with personal affairs. Majlis meetings were predominantly associated with governmental actors in the interviews. However, talking about personal issues is highly important in the UAE, particularly when dealing with Emirati leaders, as the interviewees explained. MOUs and Majlis meetings were outlined as highly relevant for the companies as they allow them to gain insights into external expectations and cultivate long-term relationships. At the same time, dialogic conversations allow the rapid determination of opportunities and boundaries. However, MNCs should be aware of the specific communication styles used in the UAE, as one interviewee of a public relations agency noted:

Like everywhere else in the world but more here, loyalty is important and patience is also very, very important. Once you make a friend here, you make them for life. So, I think it is very, very important that companies are patient. Because I got the way, you [Europeans] develop a relationship. Here, when sitting in a Majlis or coffee shop or in the office, you have a meeting of 45 minutes, and for the first half an hour, you don’t talk about the subject. That is the culture of the region. MNCs coming into the region have to understand that you don’t go and knock on the door, here is my thing, […] They want to know you as a person, trust, loyalty, all these values are there, but on a long-term, it pays off. (PRA)

Furthermore, relationships with media actors are significant to corporate diplomacy. Building on personal communication and regular meetings, the MNCs explained that they discuss what is considered a relevant topic from the media perspective and which story might have a higher opportunity to be covered. For instance, one respondent explained that s/he has all critical journalists on his WhatsApp, texting them from time to time directly to meet with them for a coffee and shisha. The close relationships with media actors were explained by the peculiarities of the UAE media system, which is not liberal and is controlled by the government. Therefore, (uncritical) issues related to the government are part of the editorial agenda, as the respondents further explained. Media coverage is important because it gives the MNCs a platform to reach citizens, which can be difficult due to governmental restrictions on civic engagement. In addition, media coverage contributes to relationship-building with potential collaborators, such as local NPOs.

There is a sensitivity, the culture, the media system. In Europe, we have a liberal media system, but the media in the UAE are controlled. There is an editorial agenda. You meet the journalists on a regular basis, and they tell you. It is double-edged in the UAE. The positive thing is the visibility here. It is easy to navigate. (EC)

We have, sometimes, you know, you have an article in the newspaper, and then, three weeks later, you have an NGO coming to you and say we have seen that that is interesting, can we discuss it. Or an academic or a lot of things. Because you build trust, and in the region, you really need to go by the halo effect. (EC)

In addition to collaborations with local actors, the MNCs cooperate with other international companies on corporate diplomacy, mostly with MNCs from the same sector. According to the respondents, this engagement involves a couple of companies building an alliance to contribute to societal issues relevant to the country, mainly reflected in activities related to the companies’ core business. Such collaborations initially involve two companies that know each other from corporate forums, or one company directly reaches out to similar companies in terms of competitors, as the interviewees claimed. Then, smaller collective initiatives are implemented, and, as they grow, they get more visibility such that increasingly more companies join. As the companies emphasized, such alliances enable them to show a more substantial commitment to the community and the government due to synergy effects. Having several MNCs coming together results in higher budgets, higher levels of expertise and knowledge, and significantly more impact. According to the interviewees, these powerful partnerships can, in turn, positively affect the relationship with the UAE Government and allow the companies to involve the government more easily in the corporate diplomacy initiatives since the companies are more visible with a large-scale alliance than appearing as a single company.

We have launched the Alliance for Youth for Dubai and the region, and we have now reached 14 members. So, these are members who think like us and who are also committed to developing the youth who come together. And we organize events or activities, you know, in coordination and we say, all of us, we are going to contribute to youth, and we set objectives, and we say we want to improve employment and employability of youth. […] So, it means, you know, to show that collaboration and commitment at scale really create a benefit in the community, and this is also a big statement to governments to how self-regulation can play a role and really advancing actions. (EC)

7.1.3 Engagement with the Local Community and Employees

Besides government entities, companies expressed that they seek to engage with community members in the UAE and support them in educational and environmental issues. Educational initiatives include different activities, such as running or participating in school or university programs, where companies hold workshops or lectures on financial literacy or healthy lifestyles, seeking to provide citizens with better career opportunities and increasing public health standards. However, such initiatives either need approval by the local authorities or are performed together with the government due to local restrictions. For this reason, the MNCs would only occasionally engage with members of civic society. As the respondents explained, engagement with citizens contributes to how a company is perceived. Both internal and external social groups “would give you [the company] an advantage” for the company’s participation in and with the community, which can positively affect the perception of the company.

[We have a partnership with] the UAE civil aviation, simply because we don’t go actively to schools, and we can’t just run our initiatives with schools alone. It has to be within the partnership between civil aviation, which actually gives that access to those students. But as a company, we can’t just go to a school, and you know, do our own activities. It has to be obviously authorized. (EC)

Moreover, civic engagement comprises cultural corporate diplomacy, including sports and arts events and activities during the “holy month Ramadan,” the “month of giving.” This comprises different activities mostly related to helping underprivileged people, particularly workers from labor camps. Corporate engagement during Ramadan is closely related to the Islamic culture, and, as the MNCs expressed, they feel obliged to give something back to the community, particularly in this month. At the same time, corporate diplomacy initiatives can become more visible during the month of Ramadan because media actors and citizens are more attentive to societal issues and activities during this time, and societal contributions are most welcomed, as the companies explained. In this regard, civic engagement can also be strategic.

I think the moment where it’s the best visible would probably be during Ramadan because it is a Muslim country, and that month is obviously more visible than every other month. But I have noticed that during that month, whether, I mean I have friends that fast or don’t fast and even those that do not fast take part in those activities because I think the overall dynamic here is that people like to really get involved and give back and so on. So, that is something that the UAE kind of is proud of. There is a certain dynamic that they created regardless of where you are from. I haven’t met a single person that in this country is not keen, you know, taking part in any of these activities. (EC)

Regarding the expectations emerging from the civic society, the MNCs were not clear, and many of the respondents stated that they are unaware of what the local citizens expect their needs. However, the interviewees outlined that they regard it as a general primary expectation of the community and their duty as a foreign MNC to demonstrate the commitment to society—everywhere in the world. However, particularly in the UAE, where foreign corporations usually do not pay taxes or work under tax-friendly conditions compared to other countries, corporate diplomacy is considered a way to demonstrate the MNCs’ appreciation and give back to the community.

I think there is an expectation from a lot of the people in this region that multinationals come and they provide more than just a work that gets, let’s say the profit out of you that gets your capabilities out of you, and that they see that someone has a social concern and that is the, almost has the duty to give back something to the society. (EC)

Another critical social group for MNCs and their corporate diplomacy initiatives are the local employees. The interviewees emphasized that employees nowadays expect the company they work for to show their social involvement. Accordingly, the demonstration of corporate diplomacy toward employees responds to this expectation and leads to positive feelings of the employees toward their employer. As the interviewees outlined, employees nowadays would look for companies that match their societal values.

It starts with your employee and showing them that you are doing great and you are doing well for the community. This gives them a sense of pride, and they start to trust you as an employer. (EC)

The millennials are looking at benefits and anything else, but they also want to work for ethical companies. They want to work for companies that are doing well and contributing and that meet their own values as well. (PRA)

Moreover, employees often seek to participate in corporate diplomacy or create initiatives, as the interviewees said. Since the MNCs regard corporate diplomacy as highly valuable for a good relationship with the employees, they seek to enhance and encourage employee engagement, as the respondents highlighted. Therefore, they offer a small number of days per year on which the employees are allowed or even advised to leave work for societal engagement and to participate in volunteering sessions. Such volunteering activities entail various activities, including beach clean-ups; mentoring programs in which employees help students; or workshops in which they help improve technology skills among citizens. Another approach to engaging employees outlined by the respondents is the implementation of employee committees and councils. These councils comprise the staff’s representatives, who discuss and decide on the specific societal issue or activity in which to participate. According to the interviewees, these committees allow the company to involve their employees, enhance their connection with the company, identify their expectations, negotiate different ideas and aspects of societal issues, and implement corporate diplomacy.

It is really gratifying when the employees come up with an idea, rather than the company pushing for a topic or something that everyone needs to join, and then some of them go there because they have to go. So, it is rewarding to know that in these small number of initiatives that we have that the people are there. (EC)

7.1.4 The Role of Global Corporate Values and Multiculturalism

In addition to the role of the different actors in the host country environment, the respondents emphasized that corporate diplomacy efforts are affected by the corporate culture and the expectations of the MNCs’ global headquarters. In this way, some interviewees pointed to a global strategy they similarly apply in every host country. Using a global corporate diplomacy strategy makes sense in the UAE as you face many different expectations and cultures, and it seems easier to have one strategy that aligns with the corporate vision. Other company respondents explained that they have a global approach but adapt it to the local level. In this way, a company needs to have its own set of values guideing its activities no matter where they are located because this is what the company stands for and the employees can identify with. However, meeting the host country’s expectations and its values and, in the case of the UAE, mainly contributing to the political agenda is essential for a foreign corporation. By doing so, the respondents explained that governmental actors in the UAE welcome and highly support you and your initiatives.

They [actors in the host country] don’t have to adapt. It’s the other way. We have to adapt. And how we create a very well routed company in that region is to be the company that you are with your set of values, but at the same time very much adapted and implemented into those countries. So, I haven’t really seen many challenges, or at least I cannot really recall anything. They [governmental actors UAE] have always been very supportive. On the contrary, they always wanted to take it further and continue, and so on. (EC)

Moreover, the respondents also portrayed how they chose specific issues. One primary concern is the fit between the company’s business and the societal issue. Therefore, companies mostly choose issues related to their core business. Furthermore, the congruence between the corporate culture, particularly the mission and vision, and the social cause plays an important role. This point was also mentioned as a reason why the overall corporate diplomacy issue in some companies is determined by the global corporate strategy and cascaded down to the local level. However, choosing a global strategy for the UAE comes with some challenges. Respondents pointed to critical and sensitive issues they promote in their home country and other host countries but not in the UAE. For instance, same-sex marriage, the role of women, and topics that, to some extent, are related to religion or politics cannot be addressed in the UAE, as highlighted by the interviewees. One way to deal with that is to go to the Department of Islamic Affairs, as the interviewees outlined. This authority determines the extent to which the initiative aligns with Islamic values and governmental rules. When corporate diplomacy involves raising money for a social cause, official approval by this institution must be given, as the respondents explained. Another way to determine whether certain activities and issues are adequate is to engage in an ongoing dialog with different actors. Accordingly, involving as many different perspectives as possible helps the MNC to find an appropriate and meaningful way to perform corporate diplomacy and identify potentially critical or sensitive issues. However, how exactly this is realized was not outlined.

So, we want to do business that is clean and meaningful, and we look at everything from all sides. Of course, this involves, you know, speaking to think-tanks from the place, speaking to tribes’ people, speaking to just normal guys, girls, whatever. (EC)

Besides this, the sensitivity concerning issues is related to the high degree of heterogeneity of the cultural and national backgrounds in the UAE. While the companies face the dominant Arab culture and Islamic values, the interviewees stated that they simultaneously seek to meet the cultural diversity in the UAE, with the majority being expatriates from all over the world. This diversity with different cultural approaches can be challenging for corporate diplomacy concerning choosing adequate issues. Moreover, it complicates finding the appropriate way to cultivate relationships and communicate with the host country community, as outlined by the respondents.

I think it is a very unique situation in which we are here in this country. We have 52 nationalities in our company, which is huge, and definitely, when you communicate, you have to take into consideration several cultural aspects to ensure that your communication is not misinterpreted or that your communication is clear enough to be understood because not everyone has native English, and we communicate in English. […] It is not only the wording, the manner in which we convey our messages, or the body language that we use to do so. What is acceptable to say in one culture is not acceptable in the other. A certain style that is acceptable in one culture is not in the other. There are quite a bit of differences that can make understanding each other a challenge. (EC)

7.2 Corporate Diplomacy News and the Construction of Organizational Legitimacy

This subchapter presents the results of the second empirical study, which sought to answer the research question to what extent and how can the media coverage of corporate diplomacy contribute to organizational legitimacy?

7.2.1 Structure of Corporate Diplomacy News Coverage

Across the two chosen media outlets, Gulf News and Khaleej Times, a total of 385 articles could be identified portraying one of the selected MNCs² and its corporate diplomacy initiative between January 2014 and December 2019. While Gulf News portrayed 275 articles (71.5%), Khaleej Times covered 110 articles (28.5%) about corporate diplomacy. Across the six years, most articles dealt with cultural corporate diplomacy. One of three articles covered cultural activities (N = 154; 36.2%),³ including sports events and engagement in arts and music. Moreover, corporate diplomacy in the news consisted of corporate activities that contributed to education and youth (N = 60; 14.1%) or public health (N = 54; 12.7%). For instance, such corporate diplomacy activities comprised educational programs, including training and workshops to improve soft skills and prepare for professional life and public health awareness campaigns. In addition, corporate diplomacy news coverage included the topics of women empowerment (N = 34; 8.8%), environmental sustainability (N = 30; 7.8%), Emiratization (N = 24; 5.6%), employee well-being (N = 27; 6.4%), aid for people in need (N = 16; 3.8%), safety (N = 14; 3.3%), and Ramadan (N = 12; 2.8%). Corporate diplomacy was related to various other actors and only seldom portayed as an initiative performed by the MNC alone. Only 35 articles (6.5%) covered corporate diplomacy initiatives that were performed by the MNC alone. When corporate diplomacy was displayed as linkages between an MNC and other actors or institutions, more than one-fourth of the corporate diplomacy activities were linked to the local government, including ministries and authorities (N = 133; 25.6%). Moreover, MNCs and their corporate diplomacy initiatives were often linked to social actors (N = 112; 21.5%), followed by national companies (N = 86; 16.5%), international companies (N = 81; 15.6%), national NGOs (N = 26; 5.0%) and international NGOs (N = 14; 2.7%). Lastly, occasionally, corporate diplomacy was related to national educational institutions (N = 19; 3.7%) and international educational institutions (N = 5; 1.0%).

Furthermore, the descriptive analysis showed that most news articles present corporate diplomacy as an activity that can benefit society, a social group, and individual actors and only 59 articles (15.3%) did not outline any profiting actor. The analysis revealed that most mentions considered society as the beneficiary of corporate diplomacy (N = 210; 4.6%). Furthermore, the benefits of corporate diplomacy for government actors (N = 55; 12.0%) and the country (N = 35; 7.6%) were presented in the news. Occasionally, corporate diplomacy was depicted as valuable or useful for the employees of the MNC (N = 27; 5.9%) and corporate partners (N = 22, 4.8%). Lastly, some corporate diplomacy activities were displayed as contributing to the company itself (N = 21; 4.6%).

Concerning the attribution of organizational legitimacy in the media, almost three out of four articles (N = 283; 73.5%) had a positive connotation toward corporate diplomacy and endorsed organizational legitimacy, while around one-fourth (N = 95; 24.7%) was neutral. Only seven articles (1.8%) were either challenging (N = 3; 0.8%) or had both a negative and a positive connotation (N = 4; 1.0%). Moreover, when corporate diplomacy was evaluated on a particular legitimacy level, it mostly attributed legitimacy on a moral level (N = 168; 43.6%) and a pragmatic level, contributing to individual interests (N = 128; 33.2%), while one-fourth of the mentions (N = 111; 28.8%) did not evaluate corporate diplomacy on a specific legitimacy level. Only seldom was corporate diplomacy described as a commitment to the local government in terms of regulative legitimacy (N = 6; 0.8%). Moreover, when it comes to suggestions on corporate diplomacy, the news coverage mostly did not emphasize any particular recommendation (N = 229; 59.5%), while 154 articles were supportive of corporate diplomacy (40%), and only two articles were critical toward it (0.5%). Lastly, regarding the overall company's visibility and recognition through corporate diplomacy contributing to cognitive legitimacy in the media, the MNCs were mainly named within the last third of the article (N = 215; 35.8%) and in the second third (N = 189; 30.9%), followed by the first third of the text (N = 175; 28.5%). Only infrequently did corporate names appear in the title or subtitle (N = 33; 5.4%). Moreover, most articles did not quote corporate representatives on their initiative or related business (N = 279; 67.8%). When quoted, the analysis showed that 82% of the quotations were related to corporate diplomacy activities.

7.2.2 Corporate Diplomacy Frames in the Media and their Link to Socio-Political Legitimacy

To answer the research question, to what extent and how do media frames on corporate diplomacy contribute to organizational legitimacy on a socio-political level (moral, pragmatic, and regulative legitimacy)? media frames were analyzed. Following Matthes and Kohring (2004, 2008), a frame is conceived as the patterns in a text aggregated by frame elements. Therefore, instead of coding the entire frame, frame elements were coded (problem definition, causal interpretation, moral evaluation, and treatment recommendation) (Entman, 1993). The goal of the data analysis was to find patterns and investigate whether and how the coded frame elements can be grouped in such a way as to uncover underlying dimensions. In this way, the analysis sought to show whether constellations of frame elements occur over a larger number of texts, indicating media frames (see Matthes & Kohring, 2004). Two statistical methods, including cluster analysis and exploratory factor analysis, have proven to be particularly suitable for investigating patterns and have been used to investigate media frames (Baumann et al., 2003; Matthes & Kohring, 2004, 2008; Semetko & Valkenburg, 2000). Following Baumann et al. (2003) and Semetko and Valkenburg (2000), exploratory factor analysis and cluster analysis were combined to increase the validity of the results.

First, an exploratory factor analysis using principal component analysis with varimax rotation was conducted. Only the most relevant variables in terms of frequency were included in the analysis. Building on the descriptive statistics (see the previous section) and where it seemed plausible, variables were merged, resulting in frequencies of at least 10% of each variable that was entered into the principal component analysis. Following this were the corporate diplomacy issue variables “employee well-being” and “Emiratization” and the institutional linkage variables “national NGOs” and “international NGOs.” This procedure led to a total of 18 variables included in the principal component analysis (see Table 7.1). Running the principal component analysis with varimax rotation and using the elbow criterion, the analysis resulted in a three-factor solution. The three factors explained 41.0% of the data variance.

In the next step, a cluster analysis was conducted to see whether the principal component analysis results could be confirmed (for this approach, see Baumann et al., 2003; Semetko & Valkenburg, 2000). A hierarchical cluster analysis was calculated using the Ward method and Squared Euclidean distance as the heterogeneity measure. Reflecting on the heterogeneity of the clusters, the dendrogram, and the suitable interpretability of different cluster solutions, a three-cluster solution was identified as most appropriate. The three-cluster solution verified the three-factor solution to a great extent in that the same variables had low or high values for each of the three factors or clusters. The mean values for every variable for the three clusters were calculated (see Table 7.2) to interpret the results for the variables that make up the frame elements, which together build a frame. Only the most relevant (in terms of highest frequency) variables were considered to interpret the frame elements as a media frame. The mean values were between “0” and “1” since the variables were coded as dummy variables with “0” for the absence and “1” for the existence of the variable. Higher mean values implied a higher probability that a variable highly contributed to and built the frame. However, small mean values might have also been of interest when they were high compared to the other variables that made up the same frame element (see Matthes & Kohring, 2008).

Overall, the results of the cluster analysis showed that the news coverage on corporate diplomacy was best represented by three media frames, which were called the “moral corporate diplomacy frame” (cluster 1), the “pragmatic corporate diplomacy frame” (cluster 2), and the “neutral corporate diplomacy frame” (cluster 3). The moral corporate diplomacy frame was the most frequent frame, with 166 articles (43.1%). The pragmatic corporate diplomacy frame was the second most common frame, with a total of 112 articles (29.1%), while the neutral corporate diplomacy frame was the least frequent frame, representing 107 articles (27.8%) (see Table 7.2).

Using the moral corporate diplomacy frame, news depicted corporate diplomacy issues of all kinds, including public health, educational initiatives, and corporate diplomacy on Emiratization and employee well-being. Moreover, in the moral corporate diplomacy frame, MNCs and their efforts were mostly linked to government actors, for instance, corporate diplomacy was performed in collaboration with the UAE Government. The frame was highly endorsing and supportive of corporate diplomacy and attributed legitimacy in the media on a moral level. Compared to the other two frames, news using the moral corporate diplomacy frame was most endorsing and supportive of corporate diplomacy. Lastly, corporate diplomacy in this frame was portrayed as a contribution to the local community, meaning that the initiatives (potentially) contributed to all community members’ well-being.

News using the pragmatic corporate diplomacy frame was mostly about cultural corporate diplomacy and corporate diplomacy initiative on Emiratization and employee well-being. Unlike the moral corporate diplomacy frame, news in the pragmatic frame did not link corporate diplomacy and the MNC to any particular actor. Instead, this frame related corporate diplomacy to various actors in the host country's environment, including national and international companies, the government, and social actors. Hence, the pragmatic frame presented corporate diplomacy as serving self-interests, mostly those of the country related to the UAE’s economic progress and its national priorities regarding societal issues, contributing to pragmatic legitimacy in the media.

Table 7.1 Factor solution frame elements

Finally, news using the neutral corporate diplomacy frame emphasized cultural corporate diplomacy activities of MNCs and linked them to social actors. For instance, MNCs initiated or participated in sports events or demonstrated a commitment to the arts or similar activities. The news highlighted the connection between the MNC and popular actors, such as celebrities or individual community members that promoted the initiative or event in the name of the company and, in this way, acted as testimonials. Moreover, corporate diplomacy in this frame was depicted in a neutral manner and not related to any particular legitimacy level. Still, in this frame, corporate diplomacy was treated as beneficial for the wider community but considerably less endorsing and supportive.

Table 7.2 Cluster solution frame elements

7.2.3 Corporate Diplomacy Frames in the Media and their Link to Cognitive Legitimacy

A one-way analysis of varianace (ANOVA) was calculated to determine the extent to which the media frames may contribute to MNCs’ cognitive legitimacy building. The independent variable was a newly computed variable that coded the media frames (“1” for the moral corporate diplomacy frame, “2” for the pragmatic corporate diplomacy frame, and “3” for the neutral corporate diplomacy frame). The dependent variable was the calculated cognitive legitimacy score variable, ranging from 1 to 13, with a lower number indicating a lower cognitive legitimacy in the media (see section 6.2.3 for how the variable was computed).

The results of the ANOVA showed that the groups representing one of the three clusters significantly differ (F(2,382) = 7.77, p < .001) (see Table 7.3). A post hoc test using Bonferroni correction indicated that clusters 1 and 3 have significant differences, while neither cluster 1 and cluster 2 nor cluster 2 and cluster 3 significantly (p > .05) differ in their means (M_C1 = 4.25, M_C2 = 3.71, M_C3 = 2.87). This result implied that the moral corporate diplomacy frame is related to a higher cognitive legitimacy (i.e., citations and quotations) than the neutral corporate diplomacy frame.

Table 7.3 Means, standard deviations, and one-way ANOVA for the effects of the moral CD frame, pragmatic CD frame, and neutral CD frame on cognitive legitimacy

7.3 Effects of Corporate Diplomacy on Organizational Legitimacy

This chapter is derived in part from an article published in Public Relations Review by Marschlich, S., & Ingenhoff, D. (2022). Public-Private Partnerships: How Institutional Linkages Help to Build Organizational Legitimacy in an International Environment. Public Relations Review, 48(1), 102124, available online: https://doi.org/10.1016/j.pubrev.2021.102124.

This subchapter presents the results of the third empirical study, which sought to answer the research question, to what extent and how do institutional linkages with governmental institutions influence the effects of corporate diplomacy on organizational legitimacy?

7.3.1 Manipulation Check

The experimental study’s survey included one manipulation check statement. The participants were asked whether the corporation in the provided newspaper article engaged in a public health initiative through a partnership with the UAE Government. The manipulation check variable was coded as a dummy variable with “1” for yes and “2” for no. Results showed significant differences between the control (corporate diplomacy without governmental linkages) and the experimental group (corporate diplomacy with governmental linkages) (F(1.97) = 129.91; p < .001; M_Control = 1.57, SD = .50; M_Experimental = 1.00, SD = .00). Thus, the manipulation check was successful, and the independent variable was manipulated as intended.

7.3.2 Hypotheses Testing

Three mediational models were analyzed using PROCESS model 4 (version 3.4) in SPSS 26 (Hayes, 2018) with 5,000 bootstrap samples and 95% confidence intervals (CIs) to test the hypotheses. Each dependent variable (moral, pragmatic, and regulative legitimacy) was regressed on the independent variable (corporate diplomacy news without/with governmental, institutional linkages) with the mediators (issue legitimacy, governmental legitimacy, and media credibility). The dependent and mediator variables were measured as metric variables with values from “1” (strongly disagree) to “5” (strongly agree), and the independent variable was computed as a dummy variable with “1” for corporate diplomacy news with governmental, institutional linkages and “0” for corporate diplomacy news without governmental, institutional linkages.

Hypothesis 1 proposed a direct effect of the independent variable (corporate diplomacy news without/with governmental linkage) on the three dependent variables (moral, pragmatic, and regulative legitimacy). The mediation analysis using PROCESS (version 3.4) (Hayes, 2013, 2018) showed a significant positive direct effect of the independent variable on moral legitimacy (b = .19, p = .005, SE = .065) and on regulative legitimacy (b = .19, p = .006, SE = .067). However, there was no significant direct effect of corporate diplomacy news without/with governmental linkage on pragmatic legitimacy (b = −.17, p = .067, SE = .094) (see Tables 7.4, 7.5, and 7.6). Therefore, hypothesis 1 can only be partially supported. While corporate diplomacy news with governmental linkages significantly increases moral and regulative legitimacy directly compared to corporate diplomacy news without governmental linkage, pragmatic legitimacy is not directly affected by whether or not corporate diplomacy news outlines governmental involvement.

Hypothesis 2 explored the relationship of the independent variable with government legitimacy. The mediation analysis revealed a significant positive effect of the independent variable on governmental legitimacy (b = .86, p < .001, SE = .128), implying that corporate diplomacy news with governmental linkages leads to a higher perception of governmental legitimacy than corporate diplomacy news without such linkages. Consequently, hypothesis 2 can be supported. Moreover, hypothesis 3 predicted that government legitimacy positively affects organizational legitimacy. All three mediation models showed a significant positive path coefficient of governmental legitimacy on the outcome variables (moral legitimacy: b = .20, p < .001, SE = .035; pragmatic legitimacy: b = .18, p < .001, SE = .051; regulative legitimacy: b = .37, p < .001, SE = .036). These results indicated that the more the government is perceived as legitimate, the higher the perceived legitimacy of the MNC on the moral, pragmatic, and regulative levels, which is in support of hypothesis 3. Concerning the relationship of the independent variable on issue legitimacy, hypothesis 4 proposed a positive effect. The results revealed a significant positive effect of corporate diplomacy news without/with governmental linkages on issue legitimacy (b = .67, p < .001, SE = .116), which supports hypothesis 4. The finding implies that corporate diplomacy news with governmental involvement increased the perceived legitimacy of the issue the corporate diplomacy initiative is promoting.

Hypothesis 5 predicted a positive effect of issue legitimacy on organizational legitimacy on the moral, pragmatic, and regulative levels. The results of the three mediation models showed that issue legitimacy significantly influences moral legitimacy (b = .35, p < .001, SE = .045), pragmatic legitimacy (b = .50, p < .001, SE = .070), and regulative legitimacy (b = .25, p < .001, SE = .050) in a positive way. Thus, hypothesis 5 can be supported. Furthermore, hypothesis 6 proposed a positive effect of the independent variable on media credibility. The mediation analysis found a positive significant impact of corporate diplomacy without/with governmental linkages on media credibility (b = .69, p < .001, SE = .133), which supports hypothesis 6. Corporate diplomacy with governmental involvement increases the perceived credibility of the media. Lastly, hypothesis 7 assumed that media credibility increases organizational legitimacy. The three mediation analyses showed a positive significant effect of media credibility on moral legitimacy (b = .29, p < .001, SE = .043), pragmatic legitimacy (b = .26, p < .001, SE = .062), and regulative legitimacy (b = .16, p < .001, SE = .044). Thus hypothesis 7 can be supported, suggesting that the higher the media credibility, the higher the perceived moral, pragmatic, and regulative legitimacy of the MNC. For an overview of the path coefficients, see Figure 7.1 and Tables 7.4–7.6.

Figure 7.1

Path model of the direct and indirect effects of corporate diplomacy on organizational legitimacy (moral, pragmatic, and regulative legitimacy)

7.3.3 Indirect Effects

To examine the significance of the indirect effects of corporate diplomacy without/with governmental linkages on moral, pragmatic, and regulative legitimacy through the mediating variables (government legitimacy, issue legitimacy, and media credibility), the results of the mediation analysis concerning the indirect effects are presented. The analysis of the moral legitimacy model showed that all of the indirect effects of the independent variable on moral legitimacy through government legitimacy, issue legitimacy, and media credibility are positive and significant (corporate diplomacy news → governmental legitimacy → moral legitimacy: indirect effect (IE) = .207⁴, SE = .053, 95% CI[.111,.320]; corporate diplomacy news → issue legitimacy → moral legitimacy: IE = .284, SE = .067, 95% CI[.157,.423]; corporate diplomacy news → media credibility → moral legitimacy: IE = .240, SE = .066, 95% CI[.127,.380]). The absence of zero in the CI suggests that the calculated effect is significantly different from zero.

Moreover, the analysis of the pragmatic legitimacy mediation model revealed positive significant indirect effects of the independent variable on pragmatic legitimacy through the three mediating variables (corporate diplomacy news → governmental legitimacy → pragmatic legitimacy: IE = .163, SE = .062, 95% CI[.058,.299]; corporate diplomacy news → issue legitimacy → pragmatic legitimacy: IE = .366, SE = .078, 95% CI[.222,.529]; corporate diplomacy news → media credibility → pragmatic legitimacy: IE = .193, SE = .058, 95% CI[.086,.311]).

Table 7.4 Moral legitimacy model: Direct and indirect effects of the mediation steps by Hayes (2013) (5,000 bootstrap samples)

Finally, the analysis of the regulative legitimacy mediation model found positive significant indirect effects of the independent variable on regulative legitimacy through the three mediators (corporate diplomacy news → governmental legitimacy → regulative legitimacy: IE = .402, SE = .068, 95% CI[.275,.540]); corporate diplomacy news → issue legitimacy  → regulative legitimacy: IE = .211, SE = .063, 95% CI[.097,.345]); corporate diplomacy news → media credibility → regulative legitimacy: IE = .142, SE = .058, 95% CI[.042,.272]). Consequently, it can be concluded that the indirect effects of the independent variable on organizational legitimacy (on the moral, pragmatic, and regulative levels) through government legitimacy, issue legitimacy, and media credibility are positive and significant. This implies that government legitimacy, issue legitimacy, and media credibility are significant mediators in the effects of corporate diplomacy news without/with governmental linkages on moral, pragmatic, and regulative legitimacy (Hayes, 2013; MacKinnon, 2008).

Moreover, in order to examine the extent to which the mediating variables differ in their effects as mediators between the independent variable and the outcome variable, the contrast module in PROCESS (v 3.4) was used and analyzed for each of the mediation models (see Rauwers et al., 2018). In the moral legitimacy model, the analysis did not show significant differences between the indirect effect of governmental legitimacy and issue legitimacy (contrast = .078⁵, SE = .083, 95% CI[−.087,.238]). Thus, it can be assumed that the indirect effect through issue legitimacy is not significantly stronger than the indirect effect of governmental legitimacy (Rauwers et al., 2018). Furthermore, the results concerning the indirect effect strengths of media credibility and governmental legitimacy (contrast = .034⁶, SE = .091, 95% CI[−.133,.222]) and the indirect effect strengths of issue legitimacy and media credibility (contrast = .044,⁷ SE = .102, 95% CI[−.165,.236]) in the moral legitimacy model showed no significant differences since the CIs include zero (see Hayes, 2018). These results imply that, first, media credibility and governmental legitimacy, and second, media credibility and issue legitimacy influence the effect of the independent variable on moral legitimacy with similar strength.

For the pragmatic legitimacy mediation model, comparing the strengths of the indirect effects of the mediating variables showed no significant differences as the CIs include zero (governmental legitimacy and media credibility: contrast = .030⁸, SE = .084, 95% CI[−.146,.186]; governmental legitimacy and issue legitimacy (contrast = .203⁹, SE = .110, 95% CI[−.009,.421]; media credibility and issue legitimacy (contrast = .174¹⁰, SE = .101, 95% CI[−.013,.387]) (see Hayes, 2018). Consequently, the results imply that all mediating variables affect the effects of corporate diplomacy without/with governmental legitimacy on pragmatic legitimacy similarly.

Table 7.5 Pragmatic legitimacy model: Direct and indirect effects of the mediation steps by Hayes (2013) (5,000 bootstrap samples)

Lastly, the strengths of the indirect effects through the mediators on regulative legitimacy were compared. The results revealed that media credibility and governmental legitimacy have significant differences in their effect strengths since the CI does not include zero (contrast =  −.260¹¹, SE = .097, 95% CI[−.450,−.068]) (see Hayes, 2018). Due to the negative contrast coefficient, the result suggests that the indirect effect strength of governmental legitimacy is significantly higher than the indirect effect strength of media credibility. Similarly, a comparison of the strengths of the indirect effects of issue legitimacy and governmental legitimacy showed significant differences since the CI does not include zero (contrast =  −.190¹², SE = .093, 95% CI[−.372,−.009]) (see Hayes, 2018). This implies, due to the negative coefficient, that the indirect effect strength of governmental legitimacy is significantly higher than the indirect effect strength of issue legitimacy. Hence, governmental legitimacy affects the effects of corporate diplomacy news (without/with institutional linkages) significantly more than issue legitimacy. Lastly, a comparison of the other indirect effects in their strengths showed no significant differences (issue legitimacy and media credibility: contrast = .070¹³, SE = .100, 95% CI[−.132,.260]) since the CI includes zero (see Hayes, 2018). Thus, it can be assumed that issue legitimacy and media credibility influence the effects of corporate diplomacy without/with governmental linkages on regulative legitimacy in a similar way.

Table 7.6 Regulative legitimacy model: Direct and indirect effects of the mediation steps by Hayes (2013) (5,000 bootstrap samples)