Responsible exit dilemmas under sanctions: multinationals’ divestment complexities in Myanmar

Thein, Htwe Htwe, Klarin, Anton, Sosnovskikh, Sergey ORCID: https://orcid.org/0000-0002-3744-740X and Grosman, Anna (2023) Responsible exit dilemmas under sanctions: multinationals’ divestment complexities in Myanmar. In: The 83rd Annual Meeting of the Academy of Management, 04 August 2023 - 08 August 2023, Boston, Massachusetts, USA.

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Abstract

This study is centered around the context of current sanctions against the Myanmar military junta in response to the human rights abuses and the resulting implications of the coup for multinational enterprises (MNEs). We provide a rich qualitative analysis of MNEs’ strategic choices under sanctions and institutional pressures in Myanmar, a context that received sparse consideration in international management studies. We contribute to institutional theory by introducing a nuanced taxonomy of strategic choices for MNEs operations under sanctions in response to formal and informal institutional pressures. Specifically, we draw attention to the ethical dilemma faced by MNEs and whether their exits are done responsibly or irresponsibly. We also provide evidence that MNEs can succumb to informal stakeholder pressures by exiting voluntarily, even in the absence of regulatory enforcement. We find that the exits are not always ‘clear-cut’ and even when MNEs exit voluntarily, they can do it irresponsibly, harming human rights and leaving the assets in the hands of unethical buyers or the military. Our study has significant implications for policy and human rights activism.