Ethical Criticism as a Source of Political Risk for Multinational Enterprises: in Quest of a Theoretical Framework

• In Event: Transgressing the Red Line: Ethical Criticism and Political Risk in Eastern Europe

Abstract

In recent times, political events – such as abrupt changes in government policies, social protests, episodes of corruption – have come to the fore as key sources of risk to the operations of multinational enterprises (MNEs) in host countries. Nonetheless, the conceptual boundaries of ‘political risk’ or ‘political risks’ have always been blurry (Jarvis 2008; Sottilotta 2016). This paper aims at providing a theoretical framework to identify and analyze a particular type of political risk to which MNEs are exposed, that is the risk of incurring in reputational and non-reputational costs associated with the transgression of ethical norms on their part. In doing so, the paper will bridge the gap separating three different fields of inquiry: a) the ‘classic’ literature on political risk; b) the study of corporate social responsibility (CSR) (see Dawkins and Fraas 2008); and c) the vast literature dealing with social movements and non-conventional political participation (Ekman and Amnå 2012 ).

Author

• Cecilia Emma Sottilotta, LUISS Guido Carli, Rome (Italy)