The internalization of societal failures by multinational enterprises. Issue 3 (21st September 2015)

• Record Type: Journal Article
• Authors: Buckley, OBE, Peter J.; Boddewyn, Jean J.
• Is Part Of: Multinational business review. Volume 23:Issue 3(2015)
• Page Start: 170
• Page End: 187
• Publication Date: 2015-09-21
• Subjects: International business enterprises -- Periodicals; International business enterprises -- Accounting -- Periodicals; International business enterprises -- Management -- Periodicals; Comparative accounting -- Periodicals; Comparative management -- Periodicals; 338.88
• DOI: 10.1108/MBR-08-2014-0041
• Languages: English
• ISSNs: 1525-383X

Abstract

<abstract> <title> <x content-type="archive" xml:space="preserve">Abstract</x> </title> <sec> <title content-type="abstract-heading">Purpose</title> <p> – The purpose of this paper is to show that the market-internalization framework can be applied to non-economic institutions because society's non-market sub-systems – political, social and cultural – are subject to failures just like economic markets, and firms can contribute to their repair or replacement by selectively, strategically and responsibly internalizing the market and non-market arenas for these sub-systems' functions. </p> </sec> <sec> <title content-type="abstract-heading">Design/methodology/approach</title> <p> – Internalization theory is applied to a new area – that of societal failures. </p> </sec> <sec> <title content-type="abstract-heading">Findings</title> <p> – Internalization theory can be applied to the joint failures of economic and non-economic institutions, and this helps explain the growing "political role" of multinational enterprises in economies in transition as well as the phenomenon of increasing multinational firm activity in underdeveloped economies. </p> </sec> <sec> <title content-type="abstract-heading">Research limitations/implications</title> <p> – The limits and implications of internalization are drawn in terms of theory development, legitimacy and managerial strategies. </p> </sec> <sec> <title content-type="abstract-heading">Originality/value</title> <p> – This paper is the first to analyze the selective internalization of societal failures by the multinational enterprises. It extends internalization theory and examines the contested notion of "public goods".</p> </sec> </abstract>