Stakeholder Management by Emerging Market Hybrid State-Owned Enterprises: A Biomimicry Perspective

Abstract Despite the phenomenon of hybrid emerging market state-owned enterprises (EM-SOEs) in international markets, the complexity inherent in their ownership structure, their paradoxes in institutional and market economies, and concerns about their proximity to the state make it challenging for EM-SOEs to fulfill sustainable development mandates as part of their internationalization strategies. In this study, we propose a biomimicry perspective to investigate how hybrid EM-SOEs with plural institutional demands manage their stakeholder relationships and undertake their corporate sustainability practices in the host market. Shifting from the firm-centric perspective, the biomimicry perspective offers a systems' explanation to spur new insights based on a single in-depth case study in the power generation industry in Indonesia. The findings highlight the importance of a long-term, value-driven strategic approach, emphasizing the cultivation of symbiotic relationships for delivering innovative products and processes to provide renewable energy supply in local markets. Additionally, legitimation practices are observed across three key dimensions embedded in the internal and external systems – governments, local elites, and local grassroots citizens, involving idiosyncratic local stakeholders whose impacts are rather mixed for EM-SOEs' international operations in Indonesia.