Back to the Great Illusion?

Global Governance and International Nonmarket Strategies

for the 21st Century

Jonathan Doh

Villanova School of Business

Villanova University

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Steve McGuire

School of Management & Business

Aberystwyth University

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Toshiya Ozaki (corresponding contact)

College of Business, Rikkyo University

Tokyo, Japan 171-8501

Tel: +81-3-3985-4077

Email: [log in to unmask]

The Journal of World Business is soliciting papers to contribute to a
special issue on the state of global governance and international nonmarket
strategy in the 21st century. This special issue is focused on exploring the
antecedents, processes and outcomes of the interaction between global
governance systems and institutions and the international nonmarket
strategies of multinational enterprises (MNEs).


The global political economy is increasingly integrated and interdependent.
In his book, The Great Illusion (1910), Norman Angell advanced the view that
because of the increasing global interdependencies that linked nation states
together in the first part of the 20th century, countries would hesitate
before engaging in conflicts because they would be self- destructive. The
two World Wars proved Angell wrong, and revealed one critical condition that
was missing in his account: stable and sustainable economic interdependence
requires well designed and well founded institutions on which cross-border
commercial activities may flourish. The business community, especially MNEs
in the United States and Europe, played an important role in helping policy
makers on both sides of the Atlantic to design and develop the postwar
international economic system. It is significant to note that these firms
assumed the role not simply because of their altruism or social
responsibility, but because of their self-interest in sustained
international growth, facilitated by the Bretton Woods inspired global
governance system. Similarly, the more recent rise of emerging markets MNEs
owes much of their international success to the international regulatory
system that catalyzed market activity both within and between home country

Global business environments, and especially institutional arrangements to
govern and sustain global trade and commerce, increasingly show strains and
fissures. As Kobrin (2009) has argued, we may be entering a new uncharted
phase of opportunities and challenges characterized by new types of
participants (governments, firms, nongovernmental organizations) who have
more diverse and unaligned interests, purposes and preferences than in
previous eras.  This complex environment is also characterized by more
difficult and vexing issues - climate change, cyber-terrorism, and financial
dependencies and volatility, to name a few - that may undermine traditional
forms of global governance and render cooperation more difficult. The
advancement of information and communication technology (ICT), which lowers
barriers and allows firms and individuals to equip themselves with
information and intelligence, exacerbates these challenges, but also offers
new opportunities for addressing them.

The international business field has long been concerned with the structure
and nature of business-government relations in the global environment and
the institutional architecture that governs firm-state relations.  In the
area of MNE-government interactions, the seminal work of Vernon (1971),
Fagre and Wells (1982), and Kobrin (1987) explored the delicate interactions
among states and firms as they navigated an increasingly integrated global
economy.   More recent literature has addressed how governments shape the
varying institutional contexts - both national and supranational (Henisz,
2002) - that firms encounter, as well as how firms themselves are able to
adapt and adjust - and influence - the emerging institutional environments
(Boddewyn & Brewer, 1994; Kostova & Roth, 2002).  With the proliferation of
additional actors in global business-government interactions, international
business scholars have incorporated international institutions (IMF, World
Bank, WTO) as formal participants in the traditional business-government
bargaining model (Prakash, 2002; Ramaurti, 2001). Most recently, the
emerging presence of civil society and nongovernmental institutions as
important players in these increasingly complex and multifaceted
business-government-institutions-nongovernmental relationships has drawn the
attention of IB scholars who seek to broaden and expand the scope of the
global business system in which MNEs operate (Boddewyn & Doh, 2010; Kobrin,
1998b; Teegen, Doh & Vachani, 2004; Lucea, 2009).

Dramatic changes in global governance systems and processes and the
dissolution of traditional global alliances are reshaping and reformulating
the system of global governance that has dominated the post-war period
(McGuire, 2012). For example, the decades-long global coalition of countries
and firms in support of increasingly liberalized trade has apparently
fractured, climate change negotiations have reached an impasse, and there is
little consensus as to how best to manage and regulate the increasingly
complex and interlinked global financial system.  Given this reality, it is
appropriate to revisit some of the assumptions and approaches that have
prevailed in the treatment of global governance systems and the actors that
shape and are shaped by it.  Further, it is important and timely to explore
the current state of governance for global business, the sustainability of
its underlying institutions, and alternative governance arrangements that
may be emerging from private and nongovernmental actors.  In addition to
these macro-level considerations, the special issue will focus on the
nonmarket strategies (Baron, 1997) of firms responding to these changing
conditions, and how MNES are themselves influencing the systems that are
emerging.  Finally, just as the governance system for global business may be
undergoing a fundamental shift, studies of international business have come
a long way in their efforts to integrate various disciplines and approaches
in examining these governance systems and understanding consequent firm
nonmarket strategies. We believe the time is ripe to look back and reflect
on these achievements, but also to call attention to unanswered questions.

Kobrin (1977, 1978, 1987, 1998a, 1998b, 2004, and 2009) is one of the key
contributors to our understanding of the interactions between politics,
economics and international business.  He has sought to account for the
impact of political distance/difference between countries on international
business and examined different levels and types of political risk and how
risk contributes to differing firm strategies and structures (Kobrin, 1977,
and 1978).   More recently, Kobrin has turned his attention to changes in
global governance and nonmarket activity, and has called attention to the
potential fracturing of the global governance systems and the emergence of
alternative actors and approaches (1998a, 1998b, 2004, and 2009).  Building
on this work, this issue will focus on the complex interactions of economic
liberalization, the role and responsibilities of international institutions,
and global firm strategy. In particular, we encourage papers that examine
how the changing role of international institutions like the IMF, World Bank
and WTO is influencing firms' nonmarket strategies.  We also encourage
submissions that explore the emergence of substitute institutional
arrangements such as private regulations, codes and other forms of "soft"
regulation, and how these complementary forms of global governance are
influencing how firms develop and advance their social and political
strategies.  In addition to submissions that explore how Western MNEs are
responding to this new global governance architecture, we also encourage
submissions that explore the evolution of emerging market firms as corporate
actors at the international level, especially as they increasingly interact
with foreign governments, global institutions, and private regulation.


We seek conceptual, theoretical, empirical and review papers that address
this broad topic. While the focus of the special issue is intentionally
broad and integrative, below are potential topics and questions that could
be relevant to the call, although they are certainly not exhaustive.

l  How has the nature, influence and effectiveness of global governance
systems evolved in the post-World War Two period?  What does this mean for
the study of IB generally, and MNE nonmarket strategies in particular?

l  Does the changing and evolving nature of global governance mechanisms
call for the development of a theory of transnational corporate political
and/or social activity?  If so, what theory or theories could inform this

l  What is the relationship between levels of governance (regional,
multilateral) and nonmarket (political and social) strategy?

l  What is the impact on MNE nonmarket strategy of global private regulation
and codes of conduct such as the UN Global Compact, Global Reporting
Initiative, ISO 1400 and 2100?  Are these new forms of regulations
substitutes or complements to traditional international law and regulation?

l  How has the emergence of individual nongovernmental organizations (e.g.
Greenpeace, WWF, Amnesty; Oxfam) and collectives of NGOs and associations of
NGOs and firms influenced how firms direct their nonmarket strategies?  Are
firms refocusing their energies on these new actors and downplaying
traditional global institutions?

l  How do the nonmarket (political and social) strategies of emerging market
firms, especially those directed at supranational institutions, compare to
those of firms from developed countries?

l  How can corporate interests be aligned across national boundaries,
societies and cultures such as they continue to support global institutions
(IMF, World Bank, WTO and so on) while also recognizing the changing nature
of global governance?


Papers that respond to this call should be forwarded to
<mailto:[log in to unmask]> [log in to unmask]

by September 1, 2013.  Inquiries about the special issue may be made to any
of the special issue co-editors listed above.  All submissions should follow
the JWB author and style requirements, which are available at

Submissions will be double blind reviewed according to JWB procedures.
Below is a rough timeline for consideration of papers and publication of the
special issue.  We may organize a mini-conference in fall/winter 2013 at
which authors whose papers are invited for a revision and resubmission will
be invited to present them and receive further feedback from the editors and
other authors.

September, 2012: Call for papers circulated

September 1, 2013: Submissions due to co-editors at email address above

Fall 2013: First round decisions

Fall/Winter 2013: Mini-conference (proposed)

March 1, 2014: Revisions due

June 1, 2014: Second round decisions

September 1, 2014: Third round decisions/Final papers due and decision
letter issued

2014/2015: Special issue published


Angell, N.  (1910). The Great Illusion: A study of the relation of military
power in nations to their economic and social advantage.  New York/London:

Baron, D.P. (1997). Integrated strategy, trade policy, and global
competition. California Management Review  39: 145-169.

Boddewyn J., & Doh, J. (2011). Global strategy and the collaboration of
MNEs, NGOs, and governments for the provisioning of collective goods in
emerging markets. Global Strategy Journal, 1: 345-361

Boddewyn, J.J., & Brewer, T.L. (1994). International Business Political
Behavior: New Theoretical Directions. Academy of Management Review, 19:

Fagre, N., & Wells, L.T. (1982). Bargaining power of multinationals and host
governments. Journal of International Business Studies, 13: 9-23

Henisz, W.J. (2000). The institutional environment for multinational
investment. Journal of Law Economics & Organization, 16: 334-364

Kobrin, S. J. (1978). When does political instability result in increased
investment risk? The Columbia Journal of World Business, 14: 113-122

Kobrin, S.J. (1979). Political risk : A review and reconsideration. Journal
of International Business Studies, 10: 67-80.

Kobrin, S.J. (1987). Testing the bargaining hypothesis in the manufacturing
sector in developing countries. International Organization 41: 609-638.

Kobrin, S.J. (1998a). Back to the future: Neomedievalism and the postmodern
digital world economy.  Journal of International Affairs, 51: 361-86.

Kobrin, S J. (1998b).  The MAI and the clash of globalizations. Foreign
Policy, Fall, 97-109.

Kobrin, S.J. (2004).  Safe harbours are hard to find: the Trans-Atlantic
data privacy dispute, territorial jurisdiction and global governance.
Review of International Studies, 30: 111-131.

Kobrin, S J.  (2009). Private political authority and public responsibility:
transnational politics, transnational firms and human rights, Business
Ethics Quarterly,19: 349-374.

Kostova, T., & Roth, K. (2002). Adoption of an organizational practice by
subsidiaries of multinational corporations: Institutional and relational
effects. Academy of Management Journal 45: 215-233

Lucea, R. (2010). How we see them versus how they see themselves: A
cognitive perspective of firm-NGO relationships. Business & Society, 49:

McGuire, S (2012). What Happened to the Influence of Business? Corporations
and organized labour in the WTO. In Narlikar, A, Staunton, M. & Stern, R.
(eds) The Oxford Handbook on the World Trade Organization, (pp. 320-339),
Oxford, UK: Oxford University Press.

Prakash, A. (2002). Beyond Seattle: globalization, the nonmarket environment
and corporate strategy. Review of International Political Economy, 9:

Ramamurti, R. (2001). The obsolescing "bargaining model"? MNC-host
developing country relations revisited, Journal of International Business
Studies, 32: 23-39.

Teegen, H., Doh, J.P., & Vachani, S. (2004). The importance of
nongovernmental organizations (NGOs) in global governance and value
creation: an international business research agenda. Journal of
International Business Studies, 35: 463-483

Vernon R. (1971). Sovereignty at Bay:The multinational spread of U.S.
enterprises. New York: Basic Books.

Toshiya Ozaki, PhD

Professor of International Business

College of Business, Rikkyo University

3-34-1 Nishi Ikebukuro, Toshima-ku

Tokyo, Japan 171-8501

Tel: +81-3-3985-4077

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