Political uncertainty, social legitimacy, and nonmarket strategy

Abstract The Decade Award–winning article by Darendeli and Hill (2016) presents a novel yet nuanced approach to the question of whether and how foreign firms can strategically navigate a volatile and unpredictable political environment. Their 2026 retrospective builds on their earlier contribution by showing how their insights have contributed to a number of contemporary IB research streams, including those addressing political risk, political action, and political ties. Going beyond their earlier contribution, in the retrospective, they describe the relational and physical pillars of social legitimacy (Darendeli & Hill, 2026). They then assess the efficacy of their original perspective in an environment characterized by heightened geopolitical conflict and political polarization. Finally, they develop a model that delineates four strategic approaches to legitimacy building in host countries. In this commentary, I offer perspectives that complement and extend their contributions by discussing (1) the nature of political uncertainty and the use of real options in responding to that uncertainty, (2) the literature on substantive versus symbolic CSR and how that might further extend some of their insights, and (3) research regarding when and how multinational enterprises provide public goods and services typically provided by government. I conclude by outlining how Darendeli and Hill’s (2016, 2026) insights have relevance for contemporary practice and policy.