ESRC-FAPESP Creating competitive advantage by serving marginalised communities: UK multinationals and inclusive development in Latin America

Multinational Enterprises (MNEs) are often blamed for only serving the elite population when they operate in emerging markets. In addition, they require local governments to create infrastructure and arrangements that can support their activities in the respective country, thus diverting resources from underserved communities within the country towards serving the elite population. The purpose of this study is to explore how multinationals from advanced markets can contribute to the achievement of the United Nations' Sustainable Development Goals by addressing the needs of underserved populations and marginalised communities in emerging markets, while also providing expectations of long-term economic return to their shareholders. Considering the increased awareness of doing good while doing well, MNEs are beginning to realise that profit maximization is not the only route to success. They need to improve their image and demonstrate that their existence is beneficial for the society in general, that is a more long-term route to achieve a competitive advantage. We intend to uncover the mechanisms and actions required by these companies to serve marginalised communities and to create a positive image in the society. To do so, we build from stakeholder theory, social entrepreneurship and value creation literature, and offer a qualitative cross-country study in Latin America. We will focus specifically on the experience of UK multinationals in Brazil and Colombia. We will collect data through focus groups and in-depth interviews with multiple actors (such as multinationals' executives, NGOs, underserved consumers, community leaders, local government representatives, investment promotion organizations, and local entrepreneurs). We will triangulate by comparing data from focus groups, interviews, and secondary sources to draw trustworthy conclusions. Further, we will use pattern matching and case comparison to analyse and make sense of data and draw conclusions.

To address this complex research question, resources and expertise from the UK and Brazil will be combined. Principal and co-investigators have a successful track record in conducting research on MNEs impact in developing countries, on local firms, on engaging in training for managers, and working directly with policy makers. Key investigators are well-known international business scholars and experts with numerous relevant high-level publications. The UK team will contribute with theoretical framing, sharing research and training skills with local researchers, taking the lead in the analysis of data, producing actionable documents for stakeholders, and drafting academic publications. The Brazilian team will provide in-depth knowledge of the research context, drawing on wider networks with businesses locally and close engagement with local societies while collecting data. As results we will provide guidelines for multinationals and other stakeholders as to how inclusive development can be achieved.