TRENDS AND FUTURE OF SUSTAINABLE DEVELOPMENT 9-10 June, 2011, Tampere, Finland

1. TRENDS AND FUTURE OF SUSTAINABLE DEVELOPMENT9-10 June, 2011, Tampere, Finland GLOBAL DISPUTE ON SUSTAINABLE BUSINESS: ANALYSING MNE-STAKEHOLDER RELATIONSHIPS IN LOCAL MEDIA TEXTS Lehtimäki, Hanna, Kujala, Johanna & Heikkinen, Anna University of Tampere

2. Objectives of the study • To examine the pluralism related to sustainable business from a stakeholder perspective. • The focus of the study is on MNE-stakeholder relationships related to a Finnish green field investment project in Uruguay. • The relationships are depicted as they are portrayed in an Argentinian newspaper, El Clarin.

3. Theoretical starting points Stakeholder literature argues that sustainable business is achieved in collaboration with a large set of stakeholders and that business logic based on serving only the owners narrows the potential for value creation (Freeman, Harrison & Wicks, 2007). Stakeholder salience model can be used to study stakeholder dynamics. Salience is based on the attributes of power, legitimacy, and urgency (Mitchell et al. 1997) MNE research claims that instead of implementing centralized global strategies companies are required to understand the local context (Ghemawat, 2007) and to reconcile the perspectives of diverse actors (Hart & Sharma, 2004) in order to sustain competitive advantage. Stakeholder perspective brings concepts and tools for understanding pluralism in MNE literature, and thus, allows for theorizing for sustainability.

4. Research Case • Finnish forest company’s pulp mill investment in Fray Bentos, Uruguay • The biggest foreign investment in the history of Finland, USD 1,2 billion • Increased Uruguay’s GDP by 1.6% and created 8,000 jobs (est.) • Production capacity of 1 million tons of bleached eucalyptus pulp • Local and environmental concerns

5. Research Case, Data and Method • Research data • Newspaper articles describing the building process and the conflict • Data source Argentinean newspaper, El Clarin • 445 articles from March, 2005 to May, 2009 • planning period 2003-2005 • construction period 2005-2007 • production period 2007-2009 • 2009 mill was sold to another company • Research method • Qualitative content analysis • Stakeholder identification: supporting, opposing, neutral • Salience analysis: power, legitimacy, urgency

6. Findings: Stakeholder identification Governments Argentinean government Brazilian government Finnish government Uruquayan government Local actors Argentinian Citizens’ Environmental Assembly of Gualeguaychú (CEAG) Citizens of Fray Bentos, Uruquay Local government of Entre Rios, Argentina Opposing Argentineans Botnia’s management Negotiating third parties Church representatives Finnish Embassy in Argentina King of Spain and his representatives Green Cross International Mercosur tribunals NGO’s Global institutional actors European union Hague International Court of Justice (ICJ) World Bank Group’s International Finance Corporation (IFC) • 18 stakeholders were identified in the news coverage of the case

7. Findings: Stakeholder salience and involvement in the case

8. Discussion • Stakeholder identification allows for grouping stakeholders according to their stance towards the issue. • In the case of Botnia, • those opposing the investment argued for environmental sustainability • those in favor of investment argued for the local social and economic sustainability • local stakeholders appeared as both supporting and opposing stakeholders • global stakeholders appeared as neutral stakeholders. • The salience analysis combined with analysis on the roles of stakeholders allows for taking into account both the local and global pluralism involved in MNE operations. • Stakeholder perspective as compared to the shareholder perspective provides insight into the dynamics related to negotiating sustainability in MNE operations.

9. Thank you! Questions, comments? Hanna.Lehtimaki@uta.fi Johanna.Kujala@uta.fi Anna.Heikkinen@uta.fi