Why and How Might the Modern MNE Respond Strategically to Violent Conflict: A Commentary

Abstract

In another commentary on the Oetzel and Getz (2012) article – “Why and how might firms respond strategically to violent conflict” -, the author zooms in on the strategies of MNEs to reduce conflict risk. This is the core idea behind the ‘peace through commerce’ thesis. The strategic risk management initiatives described in the chapter correspond mainly with MNE non-market strategies and include: (1) indirect and collaborative responses such as cooperating with non-governmental organizations (NGOs); (2) indirect and unilateral responses such as donating resources; (3) direct and collaborative responses such as mediation interactions between parties to the conflict; and (4) direct and unilateral responses such as speaking out publicly against the acts of violence. Importantly, since conflict weakens the institutions that restrict discretionary actions by the government and reduce the transparency of transactions, some MNEs are also expected to fall in the category of “conflict-profiting” firms