Evading Engagement with Host Governments: the Development of Adaptive Political Capabilities

Developed-market multinationals (DMNEs) often follow an engaged approach to corporate political activity (CPA) in host markets, whereby they deploy political capabilities to engage with host governments with the aim of exerting influence over political affairs. However, we argue that some host markets can require a different approach to CPA. Our study shows that some emerging-market multinationals (EMNEs) deploy a non-engaged approach to CPA in host markets by evading engagement with host governments while adapting to, rather than influencing, political affairs. We contribute by advancing our understanding of this approach to CPA by explaining the conceptualization and development of adaptive political capabilities. We advocate that developed and emerging-market MNEs may benefit their internationalization by learning from how some EMNEs manage international operations in some host markets.