how does mnes’ sustainable focus and ngo participation
TRANSCRIPT
How does MNEs’ sustainable focus and NGO participation influence conflict situations with
Indigenous Communities?
A Quantitative Analysis on the Dynamics of Conflict Resolution
Master Thesis
Business Administration – Track International Management Name: Michelle Zwart
Student number: 10430377
Date: 29-01-2015
Thesis supervisor: dr. Ilir Haxhi
Second reader: dr. Johan Lindeque
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State of originality This document is written by Michelle Zwart, I declare to take full responsibility for
the content of this document. I declare that the text presented in this thesis is original
and that no sources other than those mentioned in the text and its references have been
used in creating it. The faculty of Economics and Business of the University of
Amsterdam is responsible solely for the supervision of completion of the work, not
for the content.
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Abstract
The resource extraction industry has been characterized by numerous violent conflicts
between MNEs and Indigenous communities, recognized for their idiosyncratic
cultural and institutional context. The survival of these communities depends on their
social and ecological environment, which is exploited by MNEs pursuing economic
activities that may lead to conflicting interests. The dynamics of conflict resolution
have not received enough attention yet, and in this study, we explore the dynamics of
these conflicting situations. More particularly, we first investigate whether a MNE’s
sustainable focus positively influences the process of conflict resolution, and second,
we analyze to what extent NGO participation moderates this relationship. For a
sample of 122 cases located in over 26 countries from Africa and Latin America, we
analyze the effect of sustainable focus and NGO participation on conflict resolution,
which is measured in conflict length and conflict severity. We argue that sustainable
focus has a positive influence on conflict resolution, and that this relationship is
positively moderated by NGO participation. Contrary to our predictions, the results
show that sustainable focus does not influence the conflict resolution (i.e., the MNEs
with a strong sustainable focus do not affect the length of the conflict or its degree of
violence) nor does the NGO’s participation. Our contribution is twofold: First, while
previous research has explored the dynamics of conflict resolution by examining
isolated cases of conflict, we take a quantitative approach providing a more
comprehensive picture of these relationships. Second, we investigate the unexplored
moderating affect of NGO participation on sustainable focus. Finally, our findings
provide valuable insights for managers in the field of international management by
refining current knowledge on conflict resolution.
Keywords: Indigenous communities; MNE; sustainable focus; NGO participation; conflict resolution
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Table of content
1.Introduction ............................................................................................ 6
2. Literature Review ................................................................................ 12 2.1 Indigenous communities ..................................................................................................... 12 2.2 Conflict situations between MNEs and Indigenous communities ...................................... 14 2.3 Sustainable Focus ............................................................................................................... 17
2.3.1 Environmental Focus …………………………………………………………………..17
2.3.2. Social Sustainable Focus ................................................................................................ 19 2.4 NGO Participation .............................................................................................................. 20 2.4.1. NGO characteristics ........................................................................................................ 20 2.4.3 NGOs in developing countries ........................................................................................ 21 2.4.2 NGO power and pressure ................................................................................................ 23
3. Theoretical Framework ........................................................................ 25 3.1 The mechanisms influencing conflict resolution ................................................................ 25 3.2 MNE’s sustainable focus and conflict length ..................................................................... 27 3.3 MNE’s sustainable focus and conflict severity .................................................................. 29 3.4 NGO participation and conflict lenght ............................................................................... 29 3.5 NGO participation and conflict severity ............................................................................. 31
4. Data & Methods ................................................................................... 34 4.1 Sample & Data collection ................................................................................................... 34 4.2 Dependent variables ........................................................................................................... 35 4.3 Independent variable .......................................................................................................... 36 4.4 Moderating variable ............................................................................................................ 36 4.5 Control variables ................................................................................................................ 37 4.6 Method of analysis ............................................................................................................. 38
5. Results and Analysis ............................................................................ 40 5.1 Descriptive Statistic Analyses and Correlation test ............................................................ 40 5.2 Regression Analyses ........................................................................................................... 44
6. Discussion ............................................................................................ 52 6.1 Findings .............................................................................................................................. 52
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7.2 Theoretical implications ..................................................................................................... 55 7.3 Practical implications ......................................................................................................... 56 7.4 Limitations .......................................................................................................................... 57
7.5 Future research ………………………………………………………………………….. 58
8. Conclusion ........................................................................................... 60
9. References ........................................................................................... 62
10. Appendix I ......................................................................................... 68
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List of Figures & Tables Figure 1: Conceptual model ………………………………………………………. 33 Table 1: Summary of regression analyses ………………………………………... 39 Table 2: Descriptive statistics and correlations …………………………………... 43 Table 3: VIF ……………………………………………………………………….. 44 Table 4: Logistic regression analysis with conflict length ………………………... 49 Table 5: Linear regression analysis with conflict length ………………………… 50 Table 6: Linear regression analysis with conflict severity ………………………… 51 Table 7: List of represented countries …………………………………………….. 68
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1. Introduction
‘’The Guatemalan government is fuelling the fires of conflict by failing to consult
local communities before awarding mining licenses to companies, effectively raising the risk of bloodshed and bulldozing over the rights of its people. Communities are
worried about the impact that mining might have on their human rights and have consistently complained that they are not adequately consulted when such projects
are proposed’’ (Amnesty International, 2014). Globalization has created new opportunities for MNEs, expanding to foreign
countries abundant in natural resources and low wage practices. When operating
abroad, MNEs face the resistance of local communities living on those grounds
(Lertzman & Vredenburg, 2005). Especially, the resource extraction industry is
characterized by violent conflict between MNEs and Indigenous communities. In
most of these cases corporations are criticized for acting in a socially and
environmentally irresponsible manner (Calvano, 2008). By extracting resources from
the ground they can harm both the ecological as well as the social environment.
Indigenous communities are characterized by their dependence on this environment
and more particular on their local ecology, history, cultural- and social identity
(Lertzman & Vredenburg, 2005; Calvano, 2008; Weaver, 2001; Whiteman &
Mamem, 2002). The differences in culture and customs between MNEs as well as
Indigenous communities can create miscommunication and conflict. For the MNEs
and Indigenous communities it is crucial to discover factors that can enhance conflict
resolution, as both sides undergo severe negative effects from these conflict
situations.
These conflicts have been on the research agenda for a while, but still little
research is done on the dynamics of this business and community relationship
(Calvano, 2008). Studies that focus on conflict situations focus mostly on the
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dynamics of conflict resolution from a qualitative research design with a single-case
perspective (Calvano, 2008; Kolk & Lenfant, 2010; Jamhali & Mirshak, 2009). These
studies do give valuable insights on particular cases, but they have failed to enlighten
relationships that are transferable across context and settings. This is also the case for
studies that attempt to examine the influence of sustainability on conflict resolution
(Imbun, 2007; Lertzman & Vredenburg, 2005; Calvano, 2008). This leaves an
important gap in the literature. This study attempts to fulfill this gap by studying the
influence of sustainable focus on conflict resolution from a quantitative perspective.
Thereby, this study sheds light on an important possible relationship, which can be
transferred across different geographical settings.
Sustainable focus has been a hot topic over the past decade because of the
growing concerns about environmental problems and socio-economic issues.
Sustainable development is commonly understood as the development that meets the
needs of the present, without compromising the ability of future generations to meet
their own needs (Lertzman & Vredenburg, 2005). Sustainable focus can be build out
of the three dimensions: environmental, social and economic focus (Lehntonen,
2004). This study will focus primarily on the environmental and social part of
sustainability as the resource extraction industries is most harmful in these two
dimensions (Kolk & Tulder, 2010).
The environmental dimension of sustainability concerns the integration of
environmental issues in a company’s decision making (DesJardins, 1998). According
to Goodland (1995) environmental sustainability improves human welfare by
protecting the sources of raw materials used for human needs. The wellbeing of
humans is closely linked to environmental ecosystems (Bedrich, Janousková & Hák,
2011). A MNE’s business can harm these local ecosystems on which Indigenous
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communities depend and this can cause conflict situations. If a MNE has a strong
sustainable focus it will make an effort to protect the ecological environment on
which the communities depend. The other dimension of sustainability is social focus
(Lehntonen, 2004). Black (2004) defines social sustainability as the extent to which
social values, social identities, social relationships and social institutions can continue
in the future. Lertzman (1999) states that an MNE with a sustainable focus is able to
create a sense of trust and maintain the relations and organizational resources
necessary for a healthy society. It is argued that when MNEs have a strong sustainable
focus, they invest more in their relationships with Indigenous communities. On top of
that, they respect their local institutions and create a strong sense of trust. This can
have a positive influence on the conflict resolution between both MNEs and
Indigenous communities. Thus, by extending previous research, in this current study
we explore from a neutral perspective the extent to which the MNE’s sustainable
focus affects the conflict resolution between MNEs and Indigenous communities.
Considering the relevance of sustainability in the MNE’s business development and
activities, we address our first research question:
RQ1: To what extent does the MNE’s sustainable focus affect the conflict
resolution between an Indigenous community and a MNE?
MNEs are not the only ones expanding on a global scale; NGOs are also
globalizing and especially collaborating with civil society groups in developing
countries. As a result, corporations are facing increased surveillance and criticism of
their international activities, as well as increased pressure to operate in a socially
responsible manner (Kapelus, 2002). Even though it is not uncommon for NGOs to
mediate in conflict situations, their role in conflict resolution has not received much
attention yet. Some studies investigate the role of NGOs in isolated cases, but its
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general influence on conflict resolution has not been studied before (Linton, 2005;
Khor, 2011; Jenkins & Yakovleva, 2006; Murphy & Arenas, 2011). Moreover, no
other studies examine the moderating role of NGO participation on sustainable focus.
In the conflict resolution literature, both NGO participation as well as sustainable
focus only received attention as separate constructs.
Most NGOs have experience in peace-building situations and have knowledge
about local cultures, institutions and customs (Dahan et. al., 2010; Peterson, 1992).
This makes them valuable in conflict settings between MNEs and Indigenous
communities. NGOs can share this knowledge about the communities and peace
building, to help the MNE act in a more social and environmental sustainable manner
and positively moderate the process of conflict resolution. Furthermore, over the years
NGOs have gained a strong position because of their high level of expertise and their
trusted position (Brown and Kaleagaonkar, 2002). They are very much favored by the
main public. This enhances their position and negotiating power towards MNEs.
NGOs can use this power to pressure MNEs to perform and operate according to a
more sustainable strategy (Khor, 2011; van Teegen, 2004; Conroy, 2001), and thereby
positively moderate the relationship between sustainability and conflict resolution.
Thus, this study will address the unexplored moderating effect of NGO participation
on the relationship between sustainability and conflict resolution. Considering the
relevance and increasing role of NGOs in today’s business environment, we address
our second research question:
RQ2: To what extent does NGO participation moderate the relationship
between the MNE’s sustainable focus and conflict resolution?
As conflict between multinational corporations and local communities
escalates, scholars, executives, activists and community leaders are calling for
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companies to become more accountable for the impact of their activities on external
stakeholders (Calvano, 2008). Especially corporations in socially and environmentally
sensitive regions are vulnerable to these critics and are dealing with opposition from
both Indigenous communities as from NGOs. Moreover, there is a growing public
expectation for improved ethical performance in the resource extraction industries.
Therefor, conflict resolution is very important for both the MNE as the Indigenous
community. Both sides undergo negative effects from these conflict situations. From
the MNE’s point of view, conflicts have both financial and reputational consequences
(Calvano, 2008). As for the Indigenous communities these conflicts can lead to
serious injuries and sometimes even death of community people. It is crucial to find a
solution for these conflicts both from a managerial as well as from an ethical
perspective. If sustainable focus and NGO participation have a positive influence on
the conflict resolution process, both parties will profit from this and conflicts will be
shorter and less violent.
To answer our research questions, for a sample of 122 cases located in over 26
countries from Africa and Latin America, we analyze the effect of sustainable focus
and NGO participation on conflict resolution, which is measured in the length of
conflict and its severity.We argue that sustainable focus will have a positive influence
on conflict resolution and that this relation is also positively moderated by NGO
participation.
This study contributes to the existing literature in three ways. First, even
though previous studies tried to explore the dynamics of conflict resolution by
examining isolated cases of conflict, they do not show relationships that are
transferable across different geographical settings. This study fills this gap by using a
quantitative setting which allows a more comprehensive understanding of the
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relationships that influence conflict resolution. Second, to our knowledge, no other
previous study has investigated the moderating affect of NGO participation on
sustainable focus. Several studies have investigated the influence of both variables
separately on conflict resolution, but the relationship between sustainable focus, NGO
participation and conflict resolution has never been studied. Finally, from a practical
point of view the results of this study can help managers get a better understanding of
the factors influencing conflict situations. Having a better understanding will help
ensure that conflicts can be resolved quicker and be prevented in the future.
To answer our research questions, this thesis starts with a literature review on
Indigenous communities, conflict situations, sustainable development and NGO
participation. Then, we develop a theoretical framework, hypotheses and conceptual
model. Furthermore, we discuss the research design with a brief overview of the
dependent, independent and control variables as well as the sample and method of
analysis. For a sample of 122 cases located in over 26 countries from Africa and Latin
America, we analyze the effect of sustainable focus and NGO participation on conflict
resolution, which is measured in the length of conflict and its severity.
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2. Literature Review
‘Decision-making is not made by those who are affected by those decisions, people who live on the land, but corporations, with an interest which is entirely different than
that of the land, and the people, or the woman of the land. This brings forth a fundamental question. What gives these corporations like Conoco, Shell, Exxon, Diashawa, ITT, Rio Tinto Zinc and the World Bank a right with supersedes or is
superior to my human rights to live on my land, or that of my family, my community, my nation, our nation and to us as women? They should not have such right, that
right of self determination and to determine our destiny, and that of our future generations.’ – Winoma LaDuke, member of the Mississipi Band of Anishinaabeg,
Minnesoate, US (LaDuke, 1995).
2.1 Indigenous communities There is no common definition of Indigenous communities. What can be said
however is that Indigenous communities are generally characterized by their
traditional lifestyles, customs and laws. They have a distinct culture from the national
population and their own social organization (Calvano, 2008). Calvano (2008) points
out that Indigenous communities include dimensions of geography, social interaction
and identity. From a MNE’s perspective Indigenous communities are viewed as
important stakeholders. Especially in the resource extraction industry, MNEs often
deal with Indigenous communities (Lertzman & Vredenburg, 2005).
Identity is one of the central concerns to Indigenous people (Whiteman and
Mamen, 2002). An Indigenous community shares a common identity and common
obligations. Indigenous communities see themselves as the landowners of the grounds
MNEs work on. Indigenous communities’ construction of identity is linked to three
aspects: self-identification, community-identification and external-identification
(Weaver, 2001). Self-identification and community-identification are strongly linked
to place, territory, traditional homelands and a shared history. These are strong criteria
for belonging to a specific community. When the community is threatened, group
identification becomes the most important. Lertzman and Vredenburg (2005) show
that ethical relationships between firms and Indigenous people rely upon strong social
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institutions and those social institutions and local identity processes are dynamic and
interrelated. The identity of Indigenous communities is a powerful resource against
external threats. By using their cultural identity they gain global awareness and
support for their issues (Bruijn & Whiteman, 2010).
Moreover, Indigenous communities rely heavily on their traditional lands and
the resources they contain, not only for their economic survival, but also for their
social- and cultural identity and wellbeing. Damage to their cultural environment is an
important dimension of conflict (Lewicki et. al, 2003). A study by Bruijn &
Whiteman (2010) confirms that Indigenous communities suffer serious cultural
damage from negative impacts on their local ecology through societal changes related
to oil and gas development. Indigenous communities are not only very dependent on
their environment; it is also a part of their culture and very often a part of their
heritage. This makes Indigenous communities very often reluctant to changes in their
environment or on their lands as this can have a big influence on their cultural and
social stability. Bruijn & Whiteman (2010) investigated the Machiguenga
communities in Peru and point out that gas extraction by MNEs in their areas forms a
serious threat to the Machiguenga’s identity. Hereby they confirm again that these
Indigenous communities do indeed suffer cultural damage from harm to their local
ecology.
Significant is the emergence of the increased activism by Indigenous
communities. Large numbers of Indigenous people are entering in conflict with
mining companies (Fabig & Boele, 1999). Indigenous communities are challenging
MNEs on a wide range of issues including profit-flows, headquarters’ decision
making procedures, representation of the company board, right to extract minerals,
reporting procedures and long-term strategies (Kapelus, 2002). Moreover, these
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Indigenous communities benefit from the globalization of NGOs. This ensures them
more worldwide attention for their issues and helps them gain more power in the
discussion with MNEs (Kapelus, 2002).
2.2 Conflict situations between MNEs and Indigenous communities Conflict situations between local communities and MNEs have received
attention from very different fields of interests. Activists, community leaders, scholars
and organizations point out that MNEs should become more accountable for the
influence they have on external stakeholders (Calvano, 2008). They argue that
Indigenous communities often bear the negative social and environmental costs of the
extractive industry and they obtain little from the wealth that is generated
(O’Faircheallaigh, 2013). Nowadays a growing national and international recognition
of community rights, changes in corporate policy and greater Indigenous political
capacity are changing the legal and political context for extractive industries
(O’Faircheallaigh, 2013). It is important to understand the dynamics and causes of
these conflicts to prevent them from happening in the future and minimize their
negative influence.
When the interest of a MNE and an Indigenous community in a particular
geographic area collide, conflict can occur (Calvano, 2008). Violent conflict is
defined as ‘organized physical force resulting from grievances between two or more
parties and leading to injury or death to persons or damage or destruction to property’
(Oetzel et al., 2007, p. 331). This conflict is a dynamic process that unfolds over time.
Conflicts can be both different in their duration as well as in their degree of violence.
Conflicts that take over a longer period of time generally have a higher degree of
violence (Pondy, 1967). The resource extraction industry operates in social,
environmental and cultural environments. They are directly involved with natural
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systems, causing strong environmental impacts. Industrial development caused by
MNEs affect the lands that Indigenous communities live and depend on (Lertzman &
Vredenburg, 2005). The cultural beliefs, values and use of local ecosystems by
Indigenous communities are often very different than those of MNEs in the resource
extraction industry (Lertzman & Vredenburg, 2005). These conflicting interests,
values and cross-cultural differences often result in conflict situations. In these
conflict situations Indigenous communities are very often in a disadvantage compared
to the MNE, because the MNE has a dominant ideology and the ability to mobilize
resource to communicate their own perspective (Hart & Sharma, 2004).
The mining industry is one of the biggest resource extraction industries and
this industry often deals with Indigenous communities. Indigenous communities
frequently live in poverty next to the mining complexes that create a lot of wealth
(O’Faircheallaigh, 2013). This unequal distribution creates friction between both
parties. This friction is worsened because the mining companies have a great deal of
negative impact on their lands and resources. Lertzman & Vredenburg (2005) argue
that it is unethical to undermine the natural and social resources on which Indigenous
communities depend. Or it other words, it is unethical to engage with Indigenous
communities in a way that is contrary to their wishes, culture and needs for survival.
Therefore, they argue that companies should take a sustainable development approach
and take into account the biophysical, organizational and cultural systems of the
Indigenous communities of the territories in which they operate to avoid conflict
situations.
As pointed out by Crawley & Sinclair (2003) discussion regarding conflicts
between Indigenous communities and MNEs almost always happen from the context
of corporate/public affairs and stakeholder management. Furthermore, evidence
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indicates that the global industrial expansion and consumption of Western countries is
often unsustainable. Systems on which local communities depend are often not taken
into account. Therefore, they propose a model of enduring ethical engagement. This
model is based on two way learning, adaption, long-term sustainable relationships and
the recognition of the Indigenous communities’ special relationship to their lands. The
model of enduring ethical engagement is the basis for peace between these MNEs and
Indigenous communities. However, this model of enduring engagement is not easy to
accomplish. In the study of Crawley and Sinclair (2003) none of the Australian
companies in the sample have reached the proposed mature stage. This also points out
how difficult it is to overcome these cultural differences and to create a situation of
enduring peace.
Several studies investigate the dynamics of conflict resolution from a CSR
perspective (Kolk & Lenfant, 2010; Jamhali & Mirshak, 2009, Calvano, 2008). These
studies all highlight the positive influence of CSR on conflict resolution. According to
Calvano (2008) conflict is being influenced by three factors: stakeholder power,
stakeholder perception gaps and cultural context. The first is based on the difference
in power between MNEs and communities. The second is based on the differences in
perception gaps; MNEs view communities as unthankful, while communities view
MNEs as imposing their will. The third is based on cultural differences. According to
Calvano (2008) MNEs should engage in a CSR strategy that acknowledges these
differences to avoid conflict situations.
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2.3 Sustainable Focus Sustainable development is commonly understood as the development that
meets the needs of the present, without compromising the ability of future generations
to meet their own needs (Lertzman & Vredenburg, 2005). The concept of sustainable
development emerged after an increasing concern for environmental problems that
were caused by human actions. The stakeholders of sustainable development include
all the earth’s inhabitants, human and non-human. Sustainable development provides
these stakeholders with the greatest good or in the opposite the least harm (Lertzman
& Vredenburg, 2005). Nowadays, attention for sustainable development is the result
of the growing awareness for environmental problems, socio-economic issues that
deal with poverty and inequality and concerns about a healthy future for humanity.
Therefore, sustainable focus strongly links environmental and socio-economic issues
(Hopwood, Mellor & O’Brien, 2005). Robinson (2004) argues that sustainable
development needs integration across different fields; MNEs, governments and NGOs
need to work together to truly make a difference.
Sustainable development is based on three pillars: environmental, social and
economic (Montiel, 2009). The first two will be discussed in the following chapters,
as firms in the resource extractions industry have the strongest influence on the social-
and ecological environment of Indigenous communities (Letzman & Vredenburg,
2005). The economic dimension of sustainable focus will not be addressed in this
study.
2.3.1. Environmental Sustainable Focus
One of the dimensions of sustainable development is environmental focus
(Lehntonen, 2004). The environmental dimension concerns the integration of
environmental issues in a company’s decision making (DesJardins, 1998). DesJardins
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(1998) argues that businesses have more responsibility and as a result need to make
sure that their activities are ecologically sustainable. According to Goodland (1995)
environmental sustainability improves human welfare by protecting the sources of
raw materials used for human needs. The wellbeing of humans is closely linked to
environmental ecosystems, because they depend on them (Bedrich, Janousková &
Hák, 2011). Maintaining these ecosystems is very important and crucial for a
sustainable future.
Environmental sustainability and natural capital are closely linked. Natural
capital is divided in two types of capital: it can take the form of natural resources
(these can be renewable or non-renewable) and it can take the form of ecosystems
services, for example: climate stabilization, reproduction of plants and animals. It is
important to closely link the natural resources and the ecosystem services. If an
industry consumes more energy and materials than it produces, the environment will
become unsustainable (Dyllick & Hockerts, 2002). This will have major effect on the
whole environmental system and on the humans and animals depending on this
system.
In 2001 the OECD made a valuable contribution to the concept of
environmental sustainable strategy. They propose an environmental strategy focusing
on five key principles: maintaining integrity of ecosystems, enhancing quality of life,
measuring progress, de-coupling environmental pressures from economic growth and
improving governance and co-operations. These five key principles should be the
focus of a MNE’s environmental sustainable strategy (Bedrich, Janousková & Hák,
2011). Most MNEs are directly involved with natural ecosystems. Their business can
cause direct environmental impact. Industrial development has impact on the lands
and lives of local communities. The way Indigenous people live and depend on these
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local ecosystems is often contrary with the business of MNEs. This often results into
conflict situations (Lertzman & Vredenburg, 2005). Evidence suggests that currently
industrial expansion is unsustainable and hereby undermining the systems on which
local communities depend (Lertzman & Vredenburg, 2005).
2.3.2. Social Sustainable Focus In the past decade the social dimension of sustainable development has
received more attention. According to Coleman (1990) the social dimension of
sustainable development is linked to social capital. Social capital is described as the
organizational resources of relations, trust and institutions on which communities are
based (Lertzman, 1999). Social sustainability should be able to maintain and build
social capital (Lertzman & Vredenburg, 2005). Based on this statement sustainable
development must be able to maintain and create the trust, the relations and
organizational resources necessary for a healthy society (Lertzman, 1999).
Social sustainability is also based on cultural capital (Berkes & Folk, 1994).
Cultural capital refers to the resources of shared knowledge, beliefs and values upon
which communities are based (Lertzman, 1999). For a MNE to be social sustainable
it is important to acknowledge these beliefs and values. As Lertzman and Vredenburg
(2005) state sustainable development is a cross-cultural proposition. Every culture has
different values and meanings and it is unethical to affect the land and lives of
Indigenous communities in way that inconsistent with their culture, wishes and needs.
This may also result in situations of conflict between both Indigenous communities
and MNEs.
Crawley and Sinclair (2003) propose that is important to have a social
sustainable model of enduring engagement between the MNE and the Indigenous
community. This model is based on two way learning, power sharing and respecting
20
both cultures. They have developed this model by studying mining companies in
conflict with Australian Aboriginals. This model leads to a sustainable, ethical and
good relationship and can be used to avoid situations of conflict.
2.4 NGO Participation
2.4.1. NGO characteristics The NPO Act 71 of 1997 defines NGOs as non-governmental organizations
(van Eeden, 2007). NGOs are driven by a social purpose. Teegen, Doh and Vachania
(2004, p. 466) describe this social purpose of NGOs as ‘the aim to serve a societal
interest by focusing on social, political and environmental goals including equity,
education, health, environmental protection and human rights’. Thus, in general
NGOs are very often concerned with improving the conditions of the environment
and institutional development. They do this without having a profit motive in mind
(Teegen, 2005). NGOs focus mostly on social and environmental problems such as
improving healthcare, countering environmental degradation and hunger issues
(Dahan et. al., 2010). Having this is in common; NGOs vary widely on other standard
characteristics like size, duration, range and scope of activities, ideology, cultural
background, organizational culture and legal status (Pricen & Finger, 1994). They can
have memberships ranging from local to global (Fisher, 1997). Some small NGOs
tend to focus locally on addressing environmental activities with only a handful of
staff members, while others operate internationally and address a wide range of
activities across the globe with a far bigger budget, range and influence.
Over the previous years there has been a growing interest in NGOs. This can
be partly explained by their rapid growth in number and influence (Bendell, 2000;
Pricen & Finger, 1994). They have established themselves as important stakeholders
in world-class affairs. Over the years their focus shifted from international
21
governance to business (Doh & Teegen, 2003). This has made them a very important
and interesting actor in the international field of business. Both newer and more
established NGOs show a strong propensity to collaborate with organizations and
local communities in the developing world (Kapelus, 2002). Over the recent years,
NGOs have established a greater interest in issues regarding the resource extraction
industry (Kapelus, 2002).
In the following part the influence of NGOs will be discussed by first looking
at the NGO’s knowledge and experience, and second by looking at the ability of
NGOs to exert pressure and influence the public opinion.
2.4.3 NGOs in developing countries NGOs are especially active in developing countries. As a result, they have a
lot of experience in working with Indigenous communities. This experience provides
them with the necessary knowledge about the local market, the local communities and
the local government (Dahan et. al., 2010). There is an increasing willingness of
MNEs to collaborate with NGOs (Vachani, Doh & Teegen, 2004). NGOs are better
aware of the populations’ economic and social needs. Moreover, they are in touch
with social trends, and thus able to identify potential local markets and products.
These insights help the firm better adapt to the local market context (Dahan et. al.,
2010). Oetzel & Doh (2009) show that with the interaction of NGOs, MNEs can
overcome the concept of liability of foreignness. As most NGOs have longstanding
relationships with the communities of the countries in which they operate, they can
serve as a mediator in situations of miscommunication and conflict. NGOs tend to
endure a higher level of trust from these communities than MNEs. This makes their
participation very valuable (Oetzel & Doh, 2009). Moreover, NGOs can help MNEs
build effective relations with these local communities (Nwankwo, Philips & Tracey,
22
2007; Dahan et. al., 2010). Their experience in peace-building activities can play a
vital role in this (World Bank, 2006).
Linton (2005) investigates the coffee industry, which has been in crisis for
more than 20 years. As with many other resource extraction industries, the coffee
industry is characterized by poor circumstances; many farmers live in poverty, which
decreases their families’ health and education prospects. NGOs work in this industry
to create a more sustainable environment. They influence the MNEs operating in the
area twofold: by learning them more about the culture, social and environmental
problems of the farmers, but also by offering them the chance of cause-related
marketing by linking the MNEs to this relevant social issue. The MNEs can use this
to improve their social and environmental responsibility and to create a more
sustainable brand picture. The NGOs create a more sustainable environment with
benefits for both the MNE as well as the local famers.
A case study done on mining activities in Peru by BHP Billiton also shows
positive effects of NGO participation on conflict settings. Oxfam Novib facilitated the
discussion between BHP Billiton and the harmed Indigenous communities in the
mining area. After a period of negotiation, BHP Billiton and the communities signed
an agreement, which ended the conflict. In this case Oxfam Novib acted as an
independent third party in facilitating the discussion (Murphy & Arenas, 2011). These
are just two of the many examples in which NGOs use their local knowledge and
strong position to create a more sustainable social and environmental environment
(Kolk & Lenfant, 2012; Kolk & Lenfant, 2013; Millar, Choi & Chen, 2004).
Another stream of research focuses on partnerships between NGOs and
MNEs. In this case NGOs are not only involved in the conflict, but they deliberately
partner-up with MNEs to make a difference. There are several examples of successful
23
partnerships between NGOs and MNEs. Kolk & Lenfant (Forthcoming) focus on the
partnership between MNEs and NGOs in conflict situations in Africa. They show that
learning and institution building characterize these partnerships. These partnerships
prove to be very useful for MNEs and are highly relevant in conflict situations (Kolk
& Lenfant, Forthcoming). In this example, MNEs were able to achieve necessary
knowledge from the NGOs about the local culture, institutions and issues. A case
study done by Murphy & Arenas (2011) shows another good example of successful
partnerships in conflict situations. They investigated the alliance between Goldcorp, a
mining company and Citizen’s Development Corps (CDC), a NGO. These two parties
founded a Guatemalan NGO, Fundacion Sierra Madre (FSM). Together with FSM,
Goldcorp held multiple consultations with local communities to address the problems
in the area and looked for an agreement that suited both parties. Several other studies
also highlight the value of partnerships between NGOs and MNEs in conflict
resolution (Millar, Choi & Chen, 2004; Kolk & Lenfant, 2012).
2.4.2 NGO power and pressure NGOs work to influence key-decision makers to serve otherwise dormant
actors and they attempt to transform the dominant actors’ relationships with each
other and with the dormant actors (Doh, Teegen & Vachani, 2004). NGOs’ advocacy
strategies can be distinguished as ‘insider’ strategies aimed at influencing decision
makers directly and ‘outsiders’ strategies intended to mobilize public opinion
(Peterson, 1992). According to Kapelus (2002) the major factor of the increase in
emphasis on sustainability is the fact that NGOs have increased their organizational
capacity. This allows them to exert much greater pressure on corporations, both
directly through actions against their production facilities and campaigns directed at
shareholders and consumers as well as indirectly through the political system.
24
Jenkins and Yakovleva (2006) discuss the issues regarding social and
environmental disclosure in the mining industry. They show that engagement with
Indigenous groups has become a reputational imperative for mining companies. This
is the result of the increased organizational capacity and co-operation of NGOs. There
are various examples of NGOs pressuring MNEs to become more accountable and
sustainable. On of these examples is the case of MacMillan Bloeder, a Vancouver-
based timber and paper company. Greenpeace and other less familiar environmental
NGOs pressured the timber company for its unethical and unsustainable production
process, in particular for its clear-cutting forest practices in Clayoquoat Sound on
Vancouver Island. After the NGO pressure became to high MacMillan announced that
it would change its production process from clear-cutting to selective cutting, which is
more sustainable. There were two major reasons why MacMillan changed its strategy:
First, as mentioned above local environmental groups pressured the Timber
Company, and second, it became a target of Greenpeace worldwide marketing
campaign (Conroy, 2001).
Khor (2011) investigates the influence of NGOs on the palm-oil industry in
Indonesia and Malaysia and shows the same effect. More particular, he shows that
several MNEs operating in that geographical area adjusted their operations after being
the victim of boycotts resulting out of NGO pressures. Again this example shows the
effective power of NGOs. MNEs have a lot to loose when having a powerful NGO
working against them. The words of the NGOs tend to be favored by the public over
the words of the MNE. NGOs have gained this strong position because of their high
level of expertise and trusted positions (Brown and Kaleagaonkar, 2002). The main
public knows them as being very valid and viable entities. This enhances their strong
position and negotiating power. According to Teegen (2003) the lack of a ‘profit
25
motive’ is also a reason why NGOs profit from a strong legitimacy in the eyes of the
global public.
Even if the MNE has a sustainable brand image the opinion of NGOs can still
threaten or enhance this. Robinson (2004) shows that supportive cooperation between
MNEs and NGOs leads to a higher credibility of the MNE’s sustainable intention and
to a more positive effect of sustainable strategy on competitive advantage. This
credibility is very important for the MNE and its overall brand image. If a NGO talks
negative about a MNE and its sustainable efforts, it can easily damage the
corporation. From this it can be argued that it is in the MNE’s best interest to make
sure the NGO is working with the brand instead of against the brand.
3. Theoretical Framework
3.1 The mechanisms influencing conflict resolution The resource extraction industry has been characterized by numerous violent
conflicts concerning Indigenous communities, MNEs and the struggles for resources,
rights and land. Although these conflicts have been on the research agenda for a
while, not enough attention has been paid to the actual dynamics of these conflicts
(Calvano, 2008). Several studies attempt to investigate the factors influencing conflict
resolution. Lertzman & Vredenburg (2005) examine the Scientific Panel for
Sustainable Forest Practices in Clayoquot Sound. This area was characterized by one
of the biggest environmental conflicts, which eventually brought a stop to the
industry. In their study they suggest that sustainable development can help MNEs
have better and more ethical relationships with Indigenous communities to prevent
situations of conflict. Moreover, Linton (2005) addresses the influence of NGO
participation in the coffee-industry and shows how the help of NGOs can prevent
26
situations of conflict. Although these studies are very helpful in creating a broader
sense of the characteristics influencing conflict resolution, they ignore establishing
relationships that are transferable across different geographical settings. Therefore, a
quantitative design is suitable to help enlighten these relationships and to give a
broader idea about the dynamics of conflict resolution. Moreover, this study addresses
the moderating influence of NGO participation on the relationship between
sustainable focus and conflict resolution. Several studies have examined the influence
of the constructs sustainable focus and NGO participation on conflict resolution
separately, but no study has ever examined their relationship together with conflict
resolution. Overall, this study helps to create a more comprehensive picture of the
relationships influencing conflict resolution.
This study argues that there are two factors influencing the process of conflict
resolution: sustainable focus and NGO participation. Conflict resolution is measured
in both length as well as severity of conflict, because conflicts can differ in there
duration as well as in their degree of violence (Oetzel et. al., 2007). The resource
extraction industry is seen as one of the most damaging industries to both the social as
well as the ecological environment and Indigenous communities are characterized by
their strong dependence on this environment and more particular on their local
ecology, history, cultural- and social identity (Lertzman & Vredenburg, 2005;
Calvano, 2008; Weaver, 2001; Whiteman & Mamem, 2002). As shown by several
studies, harming this environment can cause situations of conflict (Bruijn &
Whiteman, 2010; O’Faircheallaigh, 2013; Crawley & Sinclair, 2003; Calvano, 2008).
Therefore, it is reasonable to think that sustainable development plays a key role in
this industry and its conflicts. A MNE with a strong environmental and social
sustainable focus will try to protect and maintain the ecological and social
27
environment the communities depend on and therefore communities will be less
triggered to start and maintain a conflict (Bedrich, Janousková & Hák, 2011,
Lehntonen, 2004, Lertzman, 1999). Thus, we argue that sustainable focus will
positively influence the process of conflict resolution.
During the years NGOs have started to play a vital role in world politics, this
can be partly explained by their rapid growth in number and influence (Bendell, 2000;
Princen & Finger, 1994). NGOs have experience in both peace-building activities and
in working with Indigenous communities. Furthermore, NGOs are able to influence
the public opinion and influence MNEs’ strategies (Dahan et. al., 2010; Peterson,
1992). This makes NGOs very suitable in the process of conflict resolution. NGOs
can share their knowledge with MNEs, which can help them become more sustainable
and create a relationship build on trust with Indigenous communities. This will have a
positive influence on the process of conflict resolution. Otherwise, NGOs can also
force MNEs in a sustainable strategy and thereby influence the process of conflict
resolution. In other words, NGO participation can positively moderate the influence
of sustainable focus on conflict resolution. Both mechanisms and their influence on
conflict resolution will be discussed in further detail below.
3.2 MNE’s sustainable focus and conflict length A strong sustainable strategy considers both the social as well as the
environmental part of sustainability. Bedrich, Janousková & Hák (2011) show the
importance of local ecosystems for Indigenous communities. Indigenous communities
strongly depend on the sources of raw material that these ecosystems provide, but
business often disturbs these ecosystems by using more raw materials than is
produced, which will in return lead to unsustainable ecosystems. The importance of
these local ecosystems is also shown by Bruijn & Whiteman (2010) who investigate
28
the Machiguenga community in Peru. They point out that gas extraction by MNEs in
their areas can be a serious threat to the Machiguenga’s identity. Moreover, research
by Calvano (2008) shows that local communities consider MNEs as imposing their
own will and not considering local institutions. Her study emphasizes that a cultural
clash between MNEs and local communities is one of the reasons a lot of conflicts
start and build on. MNEs with a strong sustainable focus acknowledge these cultural
differences and try to reconcile with the local community instead of imposing the
MNEs’ will.
When a MNE has a strong sustainable focus, its strategy will focus on
maintaining and improving the ecological and social environment of the Indigenous
communities. These MNEs will try to keep the ecosystems of the grounds on which
they operate sustainable by carefully using the sources of raw materials and support
ecosystems services like reproduction of plants and animals. The business of the
MNE will be less harmful for the local communities depending on them and the
communities will be less motivated to keep the conflict going. This will have a
positive influence on conflict length. Moreover, MNEs with a strong sustainable focus
will also consider local institutions and the local culture. The MNE will acknowledge
the differences in values and beliefs and not try to impose its own culture. This will
have a positive effect on the clash between both parties because the communities will
feel more understood and appreciated. Again, this will give the communities fewer
reasons to keep the conflict going, which will positively influence the conflict length.
The positive influence that sustainable focus can have on conflict resolution is
shown in the study of O’Faircheallaigh (2013). He emphasizes the negative impact
that the resource extraction companies have on the lands and resources of local
Aboriginal communities in Australia. According to his study the negative effects on
29
the social and ecological environment are of great influence on the friction between
both parties. He argues that a sustainable strategy can have a positive influence on this
friction. Based on these findings, we can therefore predict that:
H1: A strong sustainable focus has a positive influence on conflict length (the conflict
will be shorter).
3.3 MNE’s sustainable focus and conflict severity The same reasoning is used for conflict severity as for conflict length. Several
studies show the importance of the ecological and social environment to Indigenous
communities (Bedrich, Janousková & Hák, 2011; Bruijn & Whiteman, 2010 &
O’Faircheallaigh, 2013). If a MNE has a strong environmental and social sustainable
focus, it will try to prevent harming the ecological environment and respect the social
environment of the Indigenous communities. When the ecological environment of the
communities is maintained and harm is prevented, the communities will be less
triggered to act in a highly violent manner. This will positively influence the severity
of the conflict. Based on research by Calvano (2008) we argue that the Indigenous
communities will feel more appreciated and understood, as MNEs with a strong
sustainable focus will make an effort for this. Resulting in fewer motives for the
communities to act in a highly violent manner against the MNE and positively
influence the conflict severity. Based on these findings, we can predict that:
H2: A strong sustainable focus has a positive influence on conflict severity (the
conflict will be less violent).
3.4 NGO participation and conflict lenght NGOs have a lot of experience in working in developing countries and this
provides NGOs with knowledge about the Indigenous culture, institutions, customs
and other characteristics (Dahan et. al., 2010). MNEs most often lack this knowledge
30
and do not act according to it. This creates tension and sometimes conflict. Most
NGOs have longstanding relationships with local communities (Oetzel & Doh, 2009),
are more trusted by these communities and they have been active in peace-building
activities before (WorldBank, 2006; Murphy & Arenas, 2011). When participating in
the conflict setting, NGOs can share these valuable resources with the MNE. Linton
(2005) shows how NGOs participated in conflicts in the Coffee-industry and by
sharing their local knowledge they helped MNEs act in a more sustainable manner.
This helped reduce the conflicts between communities and MNEs in this industry.
Apart from the NGO’s valuable local knowledge, they also serve a different purpose.
In the literature there are various examples of case studies in which NGOs use their
power to pressure MNEs in a more sustainable strategy. NGOs are very much favored
by the main public and this has enhanced their position and negotiating power
towards MNEs (Brown and Kaleagaonkar, 2002). Khor (2011) shows how NGOs
influence the palm-oil industry in Indonesia and Malaysia. Firms operating in this
area adjusted their strategy after being the victim of boycotts resulting out of NGO
pressures and the threat of losing credibility. The same effect is shown in a study by
Conroy (2001). In his case study MacMillan changed its strategy after being pressured
and victimized by Greenpeace for not operating in a sustainable manner. Thus, it can
be concluded that NGOs are very effective in pressuring MNEs to become more
sustainable and act in a more environment and social responsible way.
Therefore, we argue that NGO participation will positively moderate the
relationship between a MNE’s sustainable focus and conflict resolution. When a NGO
is participating in the conflict, the MNE can use its local knowledge to learn more
about the Indigenous communities and their ecological and social environment. With
this knowledge the MNE can act in a more sustainable matter and this will give the
31
Indigenous communities less of a reason to endure the conflict. Moreover, NGOs can
use their trusted position and peace-building knowledge to facilitate the discussion
between both parties and help create an agreement. Last, NGOs can also use their
power to pressure the MNE in a more sustainable manner. Again, this will have a
positive influence on conflict length, as a more sustainable strategy will keep the
communities less motivation to keep the conflict going.
The case study done by Murphy and Arenas (2011) illustrates a good example
of the positive influence of NGO participation on conflict resolution. In their case
study Oxfam Novib facilitated the discussion between BHP Billiton and an
Indigenous community. With the help of Oxfam Novib an agreement was signed by
both parties, in which BHP agreed to act in a more sustainable manner. In this case
Oxfam Novib did not only convince BHP to change their strategy to a more
sustainable one, they also helped resolve the situation of conflict. Based on these
findings, we predict that:
H3: NGO participation will positively moderate the influence of sustainable focus on
conflict length (the conflict will be shorter).
3.5 NGO participation and conflict severity Again, the same reasoning and previous studies can be used for conflict
severity as for conflict length. In line with the findings of Khor (2011) and Conroy
(2001) we argue that NGOs can pressure MNEs to a more sustainable strategy. This
makes the MNE less of threat to the Indigenous communities. When the MNE’s
business is less harmful to both the ecological as well as social environment of the
Indigenous communities, the Indigenous communities will be less motivated to use
high violence against the MNE. Thus, NGO participation can have a positive
moderating influence on the relationship between sustainable focus and conflict
32
severity. Moreover, in line with the study of Linton (2005) MNEs can profit from the
knowledge and peace-building experience of the NGO participating in the conflict.
This can help MNEs to better understand the importance of the ecological and social
environment to the Indigenous communities and act according to this in a more
sustainable manner. Again, NGO participation can help improve the sustainable focus
of the MNE, which will result in less harm for the communities and less reason to use
high violence against the MNE. Concluding, we argue that NGO participation
positively moderates the relationship between sustainable focus and conflict severity.
Based on these findings, we can predict that:
H4: NGO participation will positively moderate the influence of sustainable focus on
conflict severity (the conflict will be less violent).
33
3.6 Conceptual model Figure 1.1 shows the conceptual model containing the relationships between
the independent, dependent and moderating variables. It is proposed that sustainable
focus has a positive influence on conflict length and conflict severity. Both
relationships are positively moderated by NGO participation.
Figure 1.1: Conceptual model
34
4. Data & Methods
4.1 Sample & Data collection This study uses a cross-sectional research design to study the relationship
between sustainable focus, NGO participation and conflict resolution between MNEs
and Indigenous communities. The analysis is done from a firm-level perspective. For
the purpose of this study a sample was drawn of conflict situations in Latin America
and Africa. The case selection and reviewing was done by group format, in which
each individual reviewed 50 cases. For this study an overall of 122 cases is used.
Appendix I shows the distribution of cases across countries. In total the sample
contains cases of conflict situations in 26 countries.
First, cases were included if they contained MNEs from the resource
extraction industry and described the correct geographical area. Second, cases were
included in the sample if they contained any situation of conflict between both a MNE
in the resource extraction industry and an Indigenous community. The resource
extraction industry contains multiple industries like mining, oil and gas, electric
winning activities and logging. Data was collected from the following databases:
EJOLT, Intercontinentalcry, Business & Human Rights Resource Center, Minewatch,
American University of Washington Database. Other websites were used for
additional information on the cases. After collecting the data, the coding was done by
using a coding manual, which contained all the necessary variables of each group
member. After the overall coding was finished, the cases that fit the geographical area
of this study were included in an overall dataset that was finally used to do the
analysis of this study.
35
4.2 Dependent variables The dependent variable of this research is conflict resolution. This variable is
split into two dimensions: (1) severity of conflict (type of violence) and (2) length of
conflict. Violent conflicts can be either short or long (Getz & Oetzel, 2009).
(1) The length of conflict is analyzed and categorized into two subgroups: (a)
long conflicts and (b) short conflicts. To determine what defines short conflicts and
long conflicts, the median of the overall sample was used. The median of conflict
length is 73.5 month. Conflicts that took over a longer period of time are coded as
long conflicts and conflicts that took over a shorter period of time are coded as short
conflicts. A lot of cases included conflicts that were ongoing on the date of collection.
To not lose the ability to use these cases, they are coded with an end date of
November 2015 (the collection period of the data) and afterwards assessed as either
being long or short. As a control, length of conflict is also measured as a linear scale
variable with the total months as an outcome to check whether there is a difference
between both measurements of conflict length.
(2) Conflicts can be very different in type and intensity (Getz & Oetzel,
2009). In this research conflict severity is measured by measuring type of violence.
Different types of conflict are assessed from low violence to more high violence
(Calvano, 2008). Type of violence was measured on a seven-point scale from 1 (low
violence) to 7 (high violence), respectively: peaceful negotiations & peaceful protests,
court actions, low-level violence (from either side) including intimidation tactics, high
level violence including physical damage but no kidnapping or deaths, high-level
violence (from either side) including kidnappings but no deaths and high-level
violence (from either side) including deaths.
36
4.3 Independent variable The independent variable in this research is sustainable focus. This variable
can be described as: the development that meets the needs of the present, without
compromising the ability of future generations to meet their own needs (Lertzman &
Vredenburg, 2005). There is no commonly accepted way of measuring sustainability
(Lopez, Garcia & Rodriquez, 2007). In this study the MNE’s sustainable focus is
measured using two indices: the Dow Jones Sustainability Index and the FTSE4good
Sustainability Index. The Dow Jones Sustainability index is a multidimensional
construct, which measures sustainability based on economic, social and
environmental indicators. It includes the companies with the best sustainable practices
in their respective industries (Lopez, Garcia & Rodriquez, 2007). According to
SusAinability (2004) the Dow Jones Sustainability index’s requirements concerning
sustainability aspects are further reaching than in any other sustainability index. This
makes the DJSI a very strong indicator of sustainable focus (Lopez, Garcia &
Rodriquez, 2007). The FTSE4good is another well known sustainability index. This
index measures the performance of companies that meet the globally recognized
sustainability standards. The companies included in the sample were assessed on a
three-point scale: (0) either not included in both indices, (1) included in either the
DJSI or the FTSE4good index, or (2) included in both indices. When a MNE is
included in both of the indices, its sustainable focus is highest. Respectively, when a
MNE is included in one of the indices, its sustainable focus is higher than when it is
included in none of the indices.
4.4 Moderating variable NGO participation is the moderating variable in this study. NGO participation
constitutes a very broad concept, but overall NGO participation considers a vorm of
37
collaboration between the NGOs and other stakeholders. NGOs can participate in the
conflict resolution process in multiple ways: (1) by facilitating the discussion between
communities and MNEs (Murphy & Arenas, 2011), (2) by forcing the MNE and the
Indigenous community into some kind of agreements (Conroy, 2001), (3) or by being
involved on the projects itself on the long run (Murphy & Arenas, 2011). In this
study NGO participation is coded as a dummy variable with two outcomes: (0) NGOs
are not participating in the conflict or (1) NGOs are participating in the conflict.
When a NGO is participating in the conflict, this is the result of the NGO facilitating
the discussion, of the NGO being involved in the project itself, or of the NGO helping
on setting an agreement between MNE and the Indigenous community.
4.5 Control variables This study uses three control variables focused respectively one country level,
community level and firm level. The control variable used on firm level is MNE’s
experience in the country of conflict. It can be argued that experience in a country by
a MNE will influence the conflict resolution process (Oetzel, Getz & Ladek, 2005).
The longer a firm operates in a specific country, the more likely that it develops
relationships with key stakeholders, establishes operational and political networks and
overcomes the costs of liability of foreignness (Eden & Miller, 2004). MNE
experience in the country is measured in years. The second control variable used in
this research is institutional strength. The countries included in the dataset are
different in their country governance structures. Country governance structure
consists of Voice & Accountability, Political Stability and Absence of Violence,
Government Effectiveness, Regulatory Quality, Rule of Law, and Control of
Corruption (The World Bank 2013). The institutional strength of a country is
measured as the average of these scores and used as a control variable. It can be
38
argued that institutional strength can have an influence on conflict situations. The last
control variable in this research focuses on community level and is cultural isolation.
Isolation preserves behaviours through geographic, cultural and language barriers.
Isolated communities maintain most of their traditional cultures and choose to live in
the isolation from mainstream society (Montenegro & Stephens, 2006). The more
cultural isolated the communities are, the more difficult it is to negotiate with MNEs
from other countries with different cultural norms and values. Cultural isolation is
measured on a 3 points scale: (1) Highly isolated, community has an isolated culture,
with a different language, not connected to a broader ethnic group, (2) Community is
connected to a broader ethnic group, but isolated within the group and (3) Community
is embedded within a broader mainstream ethnic group.
4.6 Method of analysis As this study contains two dependent variables, the analysis will be done
twofold. The relationship between sustainable focus and conflict severity with a
potential moderating influence of NGO participation will be measured using linear
regression analysis. This relationship can be described as:
𝑌 = 𝛽0 + 𝛽1𝑋1 + 𝛽1*𝛽2𝑋2 + 𝜀
In this case Y represents the dependent variable conflict severity measured by type of
violence. The regression coefficients are represented by 𝛽0, the intercept, and 𝛽1,
which represent a MNE’s sustainable focus as an independent variable, and 𝛽1* 𝛽2
which represents the interaction effect between NGO participation and sustainable
focus (the moderator). Moreover, 𝜀 stands for the difference between the estimated
𝑋𝑖 and the actual 𝑋𝑖 (Field, 2009).
39
Conflict length is first coded as binary categorical variable (short vs. long). As
described by Field (2009) logistic regression analysis should be used when the
dependent variable is a categorical variable and the independent variables are either
categorical or continuous. So for conflict length as a binary categorical variable with
two outcomes (0) short conflict and (1) long conflict, logistic regression will be used.
The logistic regression is done in a stepwise approach starting with the control
variables, followed by the predictors. A stepwise approach is a good option when the
hypotheses tested are not supported by a lot of claims in the theory (Field, 2009).
Second, as a control, conflict length will be coded using a linear interval
variable with total length in months as an outcome. This is done to assess whether
there is a difference in outcomes of both regression analyses and to check whether the
independent variable and moderator have the same influence on the dependent
variable ‘conflict length’ when it is either measured as a binary categorical variable or
as an interval variable. Table 1 shows a summary of the combinations of variables
used in the various regression analyses. The SPSS software program is used to
analyze the data to make the statistical conclusions.
40
5.0 Results and Analysis
In this chapter the statistical analyses of the data are presented. This section
will start with an overview of the descriptive statistics, correlations between the
variables and a test for multicollinearity. Followed by the regression analyses
described in the method section. The results will be used to draw conclusions
regarding the proposed hypotheses of this study.
5.1 Descriptive Statistic Analyses and Correlation test The descriptive statistics of the dependent variables, the independent variable,
the moderator and control variables can be found in Table 2. As shown the overall
mean of conflict severity is 4.26 with a standard deviation of 1.86. This means that
the conflict severity of the average conflict lies between low level of violence
including intimidation tactics and high level of violence (from either side) including
physical damage but no kidnapping and deaths. For length of conflict the overall
mean is 0.50 with a standard deviation of 0.50. This means that there is almost an
equal distribution of long (which was codes as 1) and short (which was coded as 0)
conflicts. The overall mean of length of conflict measured in months is 99.37 with a
standard deviation of 102.77. This means that the average length of conflict is 99.37
months. Moreover, the mean of sustainable focus reports 0.39 with a standard
deviation of 0.45. So on average most firms of the sample are either included in only
one of the two indices (DJSI or FTSE4good) or in none. As shown in Table 2, in more
than half of the cases were NGOs participating (M = 0.61, SD = 0.491). The
descriptive statistics of the control variables can also be found in Table 2.
Moreover, Table 2 displays the correlation between the dependent,
independent, moderator and control variables of this study. To test for
multicollinearity between variables two methods were used. First as Table 2 displays,
41
none of the correlations are extremely high, above 0.80 (Field, 2005). This is the first
indicator that there is no multicollinearity between the variables. Moreover, the
Variance Indicator Factor (VIF) is used as a second indicator whether or not there
consists multicollinearity between the variables. The VIF indicates whether a
predicator has a strong linear relationship with the other predictors. A VIF value
below 5 indicates that this strong linear relationship does not exist. As Table 3 shows,
all the VIF values of the variables in this study are below 5; therefore
multicollinearity is not an issue in this analysis.
As shown by Table 2 there are significant positive correlations between length
of conflict (short vs. long) and type of violence, which indicates that when the length
of conflict increases, the type of violence increases as well and the conflict is more
violent. Second, length of conflict (in months) has a positive significant correlation
with sustainable focus and NGO participation. This indicates that when the average
length of conflict in months is longer, there are more NGOs participating and the
MNEs have a stronger sustainable focus. Moreover, sustainable focus and NGO
participation have a significant positive correlation. This indicates that when a MNE
is more sustainable, more NGOs are participating in the conflict. Sustainable focus
also correlates positive significant with two of the control variables. This indicates
that when the MNE has more experience operating in a particular country, it also
tends to have a higher sustainable focus. Moreover, when the MNE has this higher
sustainable focus, the country in which the MNE operates, tends to have a stronger
institutional strength. The control variable cultural isolation correlates significant with
both length of conflict (shorts vs. long), length of conflict (in months) and
institutional strength. This indicates that when a community is more cultural isolated,
42
the conflicts tend to be longer and in countries where the institutional strength is
higher, the communities tend to be more cultural isolated.
43
44
Table 3: Results of Multicollinearity test including VIF, Eigenvalue and Condition index
5.2 Regression Analyses Results of the logistic regression analysis between the independent variable,
the moderator and the dependent variable length of conflict can be found in Table 4.
In this case the dependent variable length of conflict is coded as a dummy variable
with two outcomes (0) short conflicts and (1) long conflicts. To measure the
moderating effect of NGO participation, an interaction variable between NGO
participation and sustainable focus is created, by multiplying both centralized
variables. The moderating effect of NGO participation is called ‘zNGO
participation*zSustainable focus’.
As Table 4 shows the analysis was run in a stepwise approach with first only
the control variables, afterwards the independent variable was added, followed by the
interaction effect (the moderator). The beta values displayed in the Table 4 give an
indication of how important the predictor is (Field, 2005). Moreover, the significant
values are used to assess whether the hypotheses are accepted or rejected. Hypothesis
1 predicts that a MNE’s sustainable focus has a positive influence on the length of
conflict (the conflict will be shorter). As shown in Table 4 the relation between
sustainable focus and length of conflict is not significant (β = 0.407, p > 0.05). Based
on these results we cannot conclude that when a MNE has a strong sustainable focus,
Eigenvalue Condition Index VIF
Cultural Isolation 0.912 2.320 1.116
Institutional Strength 0.447 3.315 1.124
MNE experience in country
0.396 3.520 1.124
Sustainable focus 0.260 4.346 1.314
NGO Participation 0.054 9.546 1.034
45
the conflict will be shorter. Therefore, Hypothesis 1 is rejected. Moreover, Hypothesis
3 states that the influence of sustainable focus on conflict length is positively
moderated by NGO participation. Based on the results of the logistic regression
analysis we conclude that this relationship is not significant (β = - 0.174; p > 0.05),
therefore Hypothesis 3 is rejected. Thus, NGO participation does not have a positive
moderating effect on sustainable focus and conflict length.
As this analysis is done using a logistic regression analysis the value for R2
must be estimated. The value for R2 is estimated using two values: the Cox & Snell R2
and the Nagellkerk R2 (Field, 2005). The Cox & Snell R2 is based on the log-
likelihood of the model, the log-likelihood of the original model and the sample size.
However, as the Cox & Snell R2 upper bound never reaches a value of 1, this can be
seen as a drawback (Field, 2005). Therefore, the Nagellkerk R2 is used to address this
issue. When the R2 lies between 0.7 and 0.9 the regression line displays a good fit
with the data. As shown in Table 3 all values for both the Cox & Snell R2 as well as
the Nagellkerke R2 are below this range. This demonstrates a relative low goodness of
fit.
The dependent variable length of conflict (coded as a dummy; short vs. long)
displays no significant relation with both the independent and the moderating
variable. It is interesting to see whether this relation changes to a significant one when
length of conflict is not coded as a dummy, but used as a linear scale variable.
Therefore, a second regression analysis is run with length of conflict as a scale
variable with the total length of conflict in months as an outcome. The total length of
months is calculated from the beginning of the conflict until the end of the conflict.
As the dependent variable is not a dummy variable, but a scale variable, linear
regression is the most suitable method. Table 5 shows the results of this linear
46
regression analysis between length of conflict, sustainable focus and NGO
participation. Again Model 1 is used to test the relations of the control variables and
the dependent variable, Model 2 is used to test Hypothesis 1 and Model 3 is used to
test Hypothesis 3. As Table 5 shows, sustainable focus does not have a positive
significant effect on length of conflict when it is measured in months (β = 37.06, p >
0.05). Based on the results of the linear regression analysis Hypothesis 3 is also
rejected. Again, NGO participation does not have a significant moderating effect on
length of conflict measured in months (β = 1.842, p > 0.05). As shown by the values
of the R2 there is a poor fit between the regression line and the data. In Model 1 the R2
is 0.105 which indicates that the model counts for 10% of the variation in conflict
length. Moreover, in Model 2 and Model 3 the R2 has a value of 0.128, in this case the
model represents 12.8% of the variation in length of conflict. The interaction effect of
NGO participation seems to have almost no influence on the variation in conflict
length. Therefore, we can conclude that the variables are not very good determinants
of the variation in length of conflict.
Based on the two regression analyses run on the dependent variable length of
conflict, we can conclude that the independent variable sustainable focus and the
moderating variable NGO participation do not have a significant effect on the length
of conflict.
As Table 5 shows both control variables MNE experience in country (β =
1.340, P < 0.05) as well as cultural isolation (β = 46.179, p < 0.05) do have a
significant influence on the length of conflict when measured in months. Moreover,
cultural isolation also has a significant influence as a control variable when length of
conflict is measured as a dummy variable (β = 0.741, p < 0.05). The correlation
between cultural isolation and length of conflict (short vs. long) is also positive
47
significant. It is interesting to further investigate these relationships in future research
to get a broader view on the determinants of conflict length.
To test the relation between type of violence, sustainable focus and the
moderating effect of NGO participation, another linear regression analysis was done.
Hypothesis 2 states that a MNE’s sustainable focus will have a positive influence on
the conflict severity (the conflict will be less violent). In other words, when the
sustainable focus of the MNE is stronger, the conflict will be less violent. Hypothesis
4 states that NGO participation positively moderates the relation between a MNE’s
sustainable focus and conflict severity. This linear regression analysis was also done
in a stepwise approach. First the control variables were added and tested, followed by
the independent variable and the interaction effect (moderator). The results are shown
in Table 6. As shown by Table 6, the relation between type of violence and
sustainable focus is insignificant (β = -0.10, p < 0.05.). Therefore, Hypothesis 2 is
rejected. This indicates that when a MNE has a strong sustainable focus, this will not
have a positive influence on the severity of the conflict. NGO participation does also
not have a significant positive moderating influence of conflict severity (β = -0.298, p
< 0.05). Based on these results Hypothesis 4 is also rejected. Again the fit between the
linear regression line and the data is not optimal. For Model 4 and Model 5 R2
displays a value of 0.026 indicating that the variables count for 2.6% of the variation
in conflict severity. In this case sustainable focus seems to have almost no influence
on the variation in conflict severity. Model 6 has a R2 value of 0.049 indicating that
both the independent variable together with the moderating variable count for 4.9% of
the variance of conflict severity.
To conclude, all three-regression analyses report no significant results. This
indicates that sustainable focus does not have a direct effect on the conflict resolution
48
between Indigenous communities and MNEs. Moreover, conflict resolution is also not
influenced by the moderating effect of NGO participation.
This study has several limitations, which could have influenced these
unexpected results. This will be further discussed in the next chapter of this study.
49
50
51
52
6.0 Discussion
This study examines the relationship between sustainable focus, NGO
participation and conflict resolution. Conflict resolution is measured in both length as
well as severity of conflict. It is argued that if sustainable focus and NGO
participation have a positive influence on conflict resolution, the length of conflict
will be shorter and the conflict will be less violent. However, as shown by the
statistical analysis the hypotheses of this study are not supported. This could mean
that either there is no relationship between the variables or other factors may
influence the lack of statistical results. These factors will be explained in the
upcoming chapters.
6.1 Findings The first hypothesis states that sustainable focus has a positive influence on
the length of conflict. Thus, if a MNE has a strong sustainable focus, the conflict will
be shorter. The statistical analysis done in this study did not find any prove for this
relationship. Length of conflict was measured twofold: as a continuous variable in
which length is measured in total months of conflict and as a dummy variable in
which lengths has two outcomes, either long or short conflicts. The second hypothesis
states that sustainable focus has a positive influence on conflict severity, thus if a
MNE has a strong sustainable focus, the type of conflict will be less violent. Again,
this relationship was not proven by this study.
Sustainability is a concept that is very difficult to conceptualize, because
sustainable development is a complex and multidimensional construct. Depending on
the literature, there are various meanings of this concept (Ciegis, Ramanauskiene,
Martinkus, 2009). Pierantoni (2004) argues that as sustainability has different
meanings, it might include short- or long run strategies. Therefore, they argue that to
53
measure sustainability an index is required which measures both strategies. This study
used two indices to measure the sustainable focus of a MNE: the FTSE4good and the
DJSI index. Both indices use different indicators to measure sustainability and look at
long run strategies. Therefore, it is possible that MNEs from this sample with short-
run sustainability strategies were not included in the indices and for that reason coded
with a low sustainable focus. This could have created a lower validity of the variable
sustainable focus and influenced the results.
Moreover, the DJSI is highly sensitive to MNE’s size. The DJSI tracks the
performance of the top 10% companies in the Dow Jones Global Index that lead the
field of sustainability (Lopez, Garcia & Rodriquez, 2007). So in theory, it is possible
that there are smaller MNEs that have a strong sustainable focus, but are not included
in the DSJI. We conclude that measuring sustainability is difficult and it is possible
that the variable sustainable focus was not captured well enough by the use of only
two indices. The reasons discussed above could have influenced the validity of the
concept sustainable focus and therefore the outcome of the statistical analysis.
Previous studies that investigate the influence of sustainability on conflict resolution
only measure sustainability from a qualitative single-case perspective. Those studies
did not use a general measurement of sustainability, which needed to be transferable
across different contexts. This could explain the contradicting results compared to
previous studies.
The third and the fourth hypotheses concern the moderating influence of NGO
participation. The third hypothesis predicts that NGO participation positively
moderates the influence of sustainable focus on conflict length. Moreover, the fourth
hypothesis predicts that NGO participation positively moderates the influence of
sustainable focus on conflict severity. Again both hypotheses were not supported by
54
the statistical analysis done in this study. There could be several reasons for these
unexpected results.
First, as discussed in the previous part, this could be partly explained by the
relative low validity of the concept sustainable focus. Moreover, the data of this study
contained NGOs with various attitudes towards the MNE: from antagonistic, to
neutral and to supportive. In the theoretical part of this study, we argue that all three
attitudes would influence the MNE differently, but that NGO participation overall
would have a positive moderating influence on conflict resolution. It is possible
however that this is not exactly the case and that some attitudes are of greater
influence than others. It is reasonable to believe that for example NGOs with an
antagonistic attitude will use more severe and threatening methods to influence the
MNE than NGOs with a neutral attitude. Previous studies were able to overcome this
issue by only studying isolated cases of NGO intervention. If some attitudes are of
greater influence than others this could have influenced the results.
Moreover, as discussed by Pricen and Finger (1994) NGOs can be very
different from each other on characteristics as size, range and scope of activities,
cultural background, ideology, organizational culture and legal status. Moreover,
there memberships can vary from local to global (Fisher, 1997). The characteristics of
NGOs were not taken into account in this study, but could have influenced its
moderating effect. It is reasonable to think that for example bigger NGOs are better
able to pressure MNEs than smaller NGOs. Moreover, it can be argued that local
NGOs tend to have more knowledge about the local communities than global NGOs.
These characteristics could be of influence on the ability of the NGOs to moderate the
relationship between sustainability and conflict resolution. Previous studies that focus
on NGO participation only look at the influence of a specific NGO on conflict
55
settings. Therefore, these studies did not have to take general NGO characteristics
into account. So overall, it is possible that the concept of NGO participation in this
study was to broad and therefore influenced the unexpected results.
7.2 Theoretical implications This study contributes to the theory about conflict resolution twofold. First, as
Calvano (2008) states not enough research has been done about the dynamics of
conflict resolution. The studies that focus on MNEs’ strategy and the process of
conflict resolution only examine isolated cases of conflict. Imbun (2007) investigates
views of two Papue New Guinea local communities regarding mining operations in
the area. His research shows the importance of integrating CSR into the management
pursuits of running mines in PNG. Lertzman & Vredenburg (2005) examine the
Scientific Panel for Sustainable Forest Practices in Clayoquot Sound. This area was
characterized by one of the biggest environmental conflicts, which eventually brought
a halt to the industry. In their study they suggest that sustainable development can
help MNEs have better and more ethical relationships with Indigenous communities
to prevent situations of conflict. As these studies are very helpful in creating a broader
sense of the characteristics influencing conflict resolution, they are limited to a
specific context. There is no guarantee that their results would be the same in different
geographical settings. Thus, the quantitative approach of this study provides a more
comprehensive picture of the relationships influence conflict resolution.
Second, this study addresses the unexplored moderating influence of NGO
participation on the relationship between sustainable focus and conflict resolution. As
discussed there are studies focusing on sustainable focus and NGO participation but
only as separate constructs. Again, these studies focus on isolated cases of conflict
(Linton, 2005; Khor, 2011; Jenkins & Yakovleva, 2006; Murphy & Arenas, 2011).
56
For example, Linton (2005) addresses the influence of NGO participation in the
coffee-industry and Khor (2011) looks at NGO participation in the Palm-Oil industry.
Moreover, Jenkins & Yakovleva (2006) examine NGO participation looking at a
particular company MacMillan Bloeder and how NGOs have influenced their
strategy. By linking sustainable focus and NGO participation, and more particular, by
investigating the moderating influence of NGO participation on the relationship
between sustainable focus and conflict resolution, this study addresses an important
gap in the literature.
7.3 Practical implications Despite the fact that the statistical analysis of this study showed no significant
results, this study does give valuable insights for managers in the field of international
management by refining current knowledge on conflict resolution.
The results of this study show that sustainable focus does not influence the
conflict resolution (i.e., the MNEs with a strong sustainable focus do not affect the
length of the conflict or its degree of violence), nor does NGO participation.
Therefore, we can conclude that for MNEs in the resource extraction industry facing
situations of conflict it is not more beneficial to have a strong sustainable focus.
Moreover, if an MNE is undergoing a situation of conflict, NGO participation will not
be significantly beneficial for the length and severity of the conflict. From an
Indigenous communities’ perspective we can also conclude that seeking help from
NGOs will not pose any great advantages.
57
7.4 Limitations This study is subject to some limitations. First the method of collecting and
coding ensured that the data is potentially biased by personal judgment. As the
collecting and coding of the data was done in group formation, it is possible that there
are some individual differences among the coding method. Moreover, data contained
articles from various databases and websites. There is a possibility that the data on
itself was also subject of personal judgment by the writers of the articles. For example
information collected via the website of a MNE could by written with the perspective
of putting the MNE in a positive daylight and some details regarding the conflict
situations may be left out.
Moreover, the sample contained 122 cases, which is a moderate amount.
However, the fact that the study did not return any significant results may be due to
this relatively moderate amount of cases. If this study would contain more data and
cases, there is a possibility that the results would be significant. This study contains
data spread across 26 countries and as Table 7 in Appendix I shows all countries were
almost equally represented. This indicates that none of the countries were
overrepresented and could have biased the results. For future studies this is something
important to keep in mind when expanding the geographical area to increase the
number of cases.
In addition, the coding of the variable conflict length was subject to some
problems. As the majority of the cases included conflicts that were ongoing, they
were coded with an end date of November 2015. However, this may have biased the
results, as the overall length of these conflicts was not measured until the actual end
date. There is a possibility that these conflicts take over a much longer period of time
58
than the ones coded in the dataset. To mediate this problem conflicts were coded as
either long or short and measured via logistic regression. The average length in
months of the overall conflict was used as an assessment if conflicts were either short
or long. Again, this average could be biased and lower than the actual lenght because
of the ongoing conflicts.
The measurement of sustainable focus is also subject to some problems. To
measure a MNEs sustainable focus two well-known indices were used; the DJSI and
the FTSE4Good index. However, the DJSI only tracks the performance of the top
10% companies in the Dow Jones Global index that lead the field of sustainability. It
is possible that some smaller MNEs in the sample do have a strong sustainable focus,
but are not included in the DJSI. Moreover, sustainable focus remains a difficult
concept to measure even with the use of indices (Singh et. al. 2008). Both indices
used in this study use different indicators to measure sustainable focus. This also
shows the difficulty of assessing what sustainability is, and how it can be measured.
There is a possibility that the results were influenced by the use of these indices to
measure sustainability and if other indices were used there is a chance that results
would be significant.
7.5 Future research This study opens avenues for future research. First of all, future research could
again focus on sustainability as a factor influencing conflict resolution. As
sustainability is an important subject in the field of business nowadays, it remains
valuable to examine its role in the conflict resolution process. Therefore, it could be
interesting to see what results are achieved if sustainability is measured via different
indices. Second, future research should ensure the use of more cases to strengthen the
results. As discussed previously, this study uses 122 cases. Quantitative results are
59
strengthened by the use of a high number of cases. Therefore, this is something that
should be accomplished in future research. Third, as shown in Table 4 both control
variables MNE experience and cultural isolation show a significant influence on the
length of conflict. It could be interesting to further investigate these relationships. As
discussed by Calvano (2008) it is important to get a clear view of the dynamics of
conflict resolution. Apart from the factors discussed in this study, there are many
other factors that could influence the conflict resolution process. Examining cultural
isolation and MNE experience is a good starting point.
60
8. Conclusion
This study examined the factors influencing the conflict resolution process
between MNEs and Indigenous communities. More particular, this study investigated
if sustainable focus and NGO participation positively influence conflict length and
conflict severity.
Counter to what was expected this study shows that sustainable focus does not
influence the conflict resolution process. Thus, in other words, if a MNE has a strong
sustainable focus the conflict will not be shorter or less severe. Moreover, this study
also shows that NGO participation does not have a positive moderating influence.
These results contradict the expectations of this study and therefore all the hypotheses
were rejected.
Previous studies highlight the importance of the social and ecological
environment to Indigenous communities. They show that disturbing this environment
leads to conflict situations (Bruijn & Whiteman, 2010; O’Faircheallaigh, 2013;
Calvano, 2008). A MNE with a strong sustainable focus will try to maintain and
protect this environment. This study shows that sustainable focus does not positively
influence the conflict resolution process, even though previous studies prove the
importance of the social and ecological environment in conflict situations. Moreover,
previous studies show the positive role NGOs can play in conflict situations, either by
using their knowledge and trusted position, or by using their forcing power over the
MNE (Oetzel & Doh, 2009; Linton, 2005; Murphy & Arenas, 2011; Khor, 2011).
Again results of this study contradict these previous studies as they show that NGOs
do not have a positively moderating influence on sustainable focus.
As Calvano (2008) stated, it is very important to get a clear overview of the
dynamics of this conflict resolution process. Overall, this study contributes to this as
61
it examined two important characteristics in business, but also in conflict situations:
sustainable focus and NGO participation. Thereby, this study sheds new and
interesting lights on the process of conflict resolution. Moreover, this study also opens
new gateways for future research. As significant relationships were found between the
control variables MNE experience in country and cultural isolations, these variables
form a good starting point for future research. In the end, enlightening the interesting
and important topic of conflict resolution further remains important, as this will not
only benefit the field of research, but also enhance the position of MNEs and the lives
of Indigenous communities.
62
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10. Appendix I
Table 7: Distribution and frequency of countries represented in dataset
Country Frequency Argentina 7 Bolivia 4 Botswana 1 Chile 11 Columbia 5 Costa Rica 2 Dominican Republic 1 Ecuador 8 El Salvador 1 Guatamala 1 Honduras 2 Lesotho 1 Madagascar 2 Malawi 2 Mexico 6 Mozambique 5 Namibia 4 Nicaragua 2 Nigeria 1 Panama 6 Paraguay 1 Peru 18 South Africa 8 Tanzania 4 Venezuala 2 Zimbabwe 5 Total 122