Gaining Societal Advantages in Emerging Markets: International Stakeholder Management in Malaysia

International stakeholder management of MNCs in emerging markets focuses on the social context of the MNC, with a major premise being that this strategic context differs from the Western market context. Institutional theory, models from international business, resource-based theory, stakeholder management, corporate social responsibility (CSR) and legitimacy are integrated into a coherent theoretical framework. This development is based on case study methodology, where stakeholder management in Malaysia is used to illustrate the theory developed. The matching strategy, that is, the correspondence between the strategies employed and successful outcomes, makes it possible for the MNC to legitimize its operations by adapting to the values, norms and thought styles of the stakeholders. One major way of achieving legitimacy is the demonstration of social responsibility. Through this kind of matching strategy, social values and environmental concern are created among the various stakeholders, which may lead to societal advantages and, in the end, sustainable competitive advantages. The main factor behind the matching strategy is the MNCs managerial and organizational processes, which are shaped by the values, norms and thought styles of the internal institutional environment, and are constrained by institutional elements external to the institutional environment.