Short summary
In this article, we challenge conventional wisdom that deglobalization is something imposed on firms by national governments. Drawing on a century of archival evidence from the aluminium industry, we reveal how multinational enterprises leverage elite networks and ideological alignment with states, strategic lobbying and political capabilities built over time, and nonmarket strategies to shape protectionist policies. Our key insight is that globalization and deglobalization are not opposing forces but intertwined processes that firms navigate through sophisticated corporate political activity.
- Globalization and Deglobalization
If existing research recognizes multinational enterprises as agents of globalization, then firms are conversely typically presented as tossed about on a sea of deglobalized misfortunes imposed by national governments through tariff restrictions, regulatory constraints and the forces of economic nationalization. We present a different view, drawing on a century of archival research into the vertically-integrated, highly globalized and strategically-important aluminium industry, seen through European and North American firms. Firms may support deglobalization and be an active agent in that where it suits their strategic interests. Through this we recognize globalization and deglobalization as complex simultaneous processes constructed through state-firm negotiations.
- Reframing nonmarket strategy and corporate political activity (CPA)
Instead of the episodic work focused on tactical outcomes (wins from regulatory changes or improvements in firm performance exacted from political activities), which characterizes much of the corporate political activity literature focus, we focus on institutional work underpinned by deeper ideological and networking foundations, which are valuably revealed by historical study. This combination of elite networking, investment in and development of political capabilities, as well as long-term strategic foresight, leavened by political alignment and personal moral commitments help to explain the support and influence and legitimacy enjoyed by firms investing in these microfoundations.
- The microfoundations of corporate political activity
In a changing geopolitical context, including deglobalization, these microfoundations provide valuable insights as to the ideological influences on strategic actions, as well as strategic actions within elite networks, which help explain coalition building and the evolution of protectionist measures. Our study extends nonmarket strategy by highlighting the microfoundations of corporate political activity: ideological affinity; embedded agency; and networked trust.
- The contribution of historical research and perspectives to corporate political activity
Our historical research – undertaken over nearly 20 years in archives in Europe and the US – provides a deep understanding of these microfoundations of CPA and the contingent firm outcomes arising from changing national economic contexts in changing global industry dynamics and geopolitics. In our case, the different trajectories of the various national aluminium producers, like other energy and capital-intensive industries, investment in political resources and capabilities was pivotal and contingent on adaptability of those in home and host countries in an often fast-moving domestic and global political contexts. This might be contrasted against the CPA of big technology firms in Asia, Europe and the US. Analysis of archival sources from business and government as well as international comparisons and the careful consideration of historical perspectives of changing contexts afford deep insights as to how the dynamics of these non-market aspects play out longitudinally
- Managerial implications
Our study demonstrates that understanding how firms engage politically, not just if they do, is critical to managers and policymakers alike in today’s volatile geopolitical landscape. For senior managers, this requires routine acuity to changing political situations, every bit as much as market factors, and constant vigilance to the adaptability of political capabilities. For policymakers, it requires attentiveness to how those political resources and capabilities are being deployed and the policy and social implications. Once again, a striking recent example of this is to be found in the particular way in which big technology firms have sought to deploy their political assets with different contingent outcomes in Asia, Europe and the US.
