Back to the Great Illusion?

Global Governance and International Nonmarket Strategies

for the 21st Century



Jonathan Doh

Villanova School of Business

Villanova University

[log in to unmask]


Steve McGuire

School of Management & Business

Aberystwyth University

[log in to unmask]


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 GreatIllusion (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 economies.

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. 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 phenomenon?

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 [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 paper circulated

September 1, 2013: Submission 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 illusionA study of the relation of military power in nations to their economic and social advantage.  New York/London: Putnam.


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: 119-143


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 Business14: 113-122


Kobrin, S.J. (1979). Political risk : A review and reconsideration. Journal  of International Business Studies10: 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 Affairs51: 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: 116-139


Prakash, A. (2002). Beyond Seattle: globalization, the nonmarket environment and corporate strategy. Review of International Political Economy, 9: 513-537


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

Toshima-ku, Tokyo, Japan 171-8501

Tel: 81-3-3985-4077 Fax: 81-3-3985-4085

AIB-L is brought to you by the Academy of International Business.
For information:
To post message: [log in to unmask]
For assistance: [log in to unmask]
AIB-L is a moderated list.