Corporate political activity in sub-Saharan Africa : the influence of multinational enterprises in the institutionalisation of Uganda's electricity industry

The study investigates the extent to which Multinational Enterprises (MNEs) operating in Uganda's electricity industry engage in corporate political activity (CPA), and how this in turn influences regulatory institutionalisation. It deploys an exploratory, qualitative multi-case study approach drawing on semi-structured interviews, archival materials, media reports and fieldwork notes for data collection. Data analysis is informed by an NVivo-supported grounded analytic method. The findings indicate that MNEs deploy heterogeneous CPA strategies to respond to pro-market reform in emerging markets undergoing regulatory institutionalisation. Some of the most important responses reflect divergences in configuring the relationship with the host government and in nurturing adaptable and anticipatory political embeddedness. Deeper analysis in turn links these divergent responses to the degree of engagement with five underlying perspectives - competing multi-stakeholder demands; challenges of getting locally embedded; accommodation of Africa as an emerging political market; the implications of institutional fragility; and the demands of an evolving political environment. Uganda emerges thereby as a laboratory for diverse CPA strategies targeting other emerging markets in the region. The primary contribution to knowledge concerns the CPA research domain, adding to it perspectives on antecedents and a typology of CPA in emerging markets undergoing regulatory institutionalisation. There is a further synthesis to address political capability theory (and its integration in broader organisational capability theory) by clarifying the nature and the patterns of development of corporate political capabilities in such emerging markets. At a secondary level, there is also a contribution from an institutional theoretic perspective regarding corporate political influence on the process of emerging institutionalisation. This translates into evidence for a co-evolutionary relationship between emerging institutionalisation and CPA. Finally, there is a policy perspective that is addressed in the recommendations of the study

Corporate political activity and location-based advantage: MNE responses to institutional transformation in Uganda’s electricity industry

We examine how multinational enterprises (MNEs) employ political strategies in response to location-based, institutional transformations in new frontier African markets. Specifically, we explore the heterogeneous corporate political activities of advanced and emerging market MNEs in Uganda’s electricity industry, as they respond to and influence locational advantage using diverse political capabilities. We argue that, in institutionally fragile, new frontier markets, Dunning’s OLI paradigm is more theoretically robust and managerially relevant when combined with a political perspective. Effective MNE political strategies in these markets rely on nonmarket capabilities in political stakeholder engagement, community embeddedness, regional understanding, and responsiveness to stages of institutionalization

To Choose Informational and Financial Political Access or Not? The Influence of Access Political Strategies on Subsidiary Performance of Emerging Market Multinationals

Doing business in sub-Saharan Africa is characterized by high levels of political uncertainty. More so for MNEs internationalizing across borders in the region, institutional environments are perceived as relatively different from developed economies and may be strongly argued as weak. However, research to interrogate corporate political activities within this politically uncertain context is limited. This paper uses the dynamic capability perspective to examine the role of access political activities on the subsidiary performance of South African MNEs in sub-Saharan Africa. The study argues that contrary to the literature on access political activities, within a context of weak formal institutions and high political risk, political capabilities like information and financial political strategies negatively influence the subsidiary performance of MNEs; and host-country political risk levels moderate the relationship. We find support from a survey of senior executives of South African MNEs in cross-border businesses across sub-Saharan Africa

Energy resource centres (ERCs) as vehicles for extracting higher benefits from solar power in rural and suburban areas of developing countries (the case of Uganda)

The study addresses the question of how Energy Resource Centres (ERCs) in developing countries can be designed and deployed as vehicles to support more productive and higher value use of solar power. It deploys a mixed method approach that produces both qualitative in-depth insights and a generalisable quantitative aspect. ERCs emerge as an innovative configuration that can significantly support efforts to attain higher value use of solar power, especially in rural and suburban locations. The high confidence expressed in their usefulness by both end users and firms offers an opportunity to develop and apply them multidimensionally. They offer a space for locally-embedded innovation and sustainable application to challenges of development and tackling poverty. The high response to offers to use them for training for both firms and end users suggests further they could also open new opportunities to apply open, online and distance learning alternatives to traditional face to face models. This can in turn have broader learning impact in other areas of strategic engagement in rural communities

Open and distance learning (ODL) as a strategic tool for improving employability and entrepreneurship in new frontier markets: the case of Uganda

In light of efforts to make higher education (HE) more accessible in African countries, Open and Distance Learning (ODL) has emerged as one of the most promising solutions. A key area of application is duo-mode HE delivery which is designed to overcome the deficiencies of traditional single-mode, campus-based delivery. Successful application has however been generally limited by, among others, inadequate foundational infrastructure, weak demonstration of equivalency with traditional qualifications and low supporting research. Trends in Foreign Direct Investment inflows and growing participation in the global economy by African countries further necessitate ODL that offers the international qualifications increasingly sought by employers. The current study is based on the following research question: How can ODL be more effectively integrated into HE programs of duo-mode delivery to improve employability and entrepreneurship in African new frontier markets? It relies on an inductive, qualitative case study that feeds on evidence from focus group discussions and semi-structured interviews with relevant senior staff at the case HE institution in Uganda. The findings indicate a need for a stronger linkage between duo-mode delivery and direct employability and entrepreneurship using dynamic capabilities. Prominent among such capabilities are adaptive resilience, choice of foundational courses, engagement with international partnerships and anticipation of future changes. We extend organisational capabilities theory, especially from a dynamic capabilities perspective

Chinese firms in Uganda: The important role of the mediator.

Following years of economic decline precipitated by civil war, Uganda is making rapid economic recovery, and much of this has been spurred by Chinese FDI activities. Whereas the entry of Chinese companies onto big infrastructure and extractive industrial projects is what has dominated public attention, there has also been substantial and much longer activity in lower scale, but important sectors like agriculture and agro-processing. We however know little about the nature of engagement of these companies and its corresponding impact on employment and local communities. Drawing from in-depth interviews of managers and employees working for Chinese companies, this chapter explores the nature, attributes and issues underpinning their work and relationships. The evidence suggests a strong dependence on the nurturing of trust-based relationships with lead Ugandan managers. These managers act as ‘Mediator(s)’ between Chinese management, Ugandan employees, regulators, hosting communities, clients and other key stakeholders, and subsequently become deeply involved in bridging disparities between Chinese managerial behaviour and Ugandan employee perceptions

Engaging informal institutions through corporate political activity: Capabilities for subnational embeddedness in emerging economies

This study examines how multinational enterprises (MNEs) organize internally to enhance subnational institutional fit in new frontier developing economies. We consider how corporate political activity (CPA) can facilitate local embeddedness by engaging informal institutions and nonmarket stakeholders at local community level. We apply an exploratory, qualitative, multi-case study approach to six MNEs in Uganda’s electricity generation sector. The findings suggest that in markets like Uganda, MNEs depend on being bridged with subnational informal institutions such as tribal, social, and religious norms and grassroots political networks. Such bridging in turn positions these MNEs to contribute to developmental processes by integrating recognizable informal institutions into grassroots projects. Drawing on institutional theory and an organizational capabilities perspective, we identify the diverse bridging capabilities that enable MNEs to successfully embed locally, thereby simultaneously pursuing business objectives and achieving societal relevance

Corporate political activity and location-based advantage: MNE responses to institutional transformation in Uganda’s electricity industry

We examine how multinational enterprises (MNEs) employ political strategies in response to location-based, institutional transformations in new frontier African markets. Specifically, we explore the heterogeneous corporate political activities of advanced and emerging market MNEs in Uganda’s electricity industry, as they respond to and influence locational advantage using diverse political capabilities. We argue that, in institutionally fragile, new frontier markets, Dunning’s OLI paradigm is more theoretically robust and managerially relevant when combined with a political perspective. Effective MNE political strategies in these markets rely on nonmarket capabilities in political stakeholder engagement, community embeddedness, regional understanding, and responsiveness to stages of institutionalization