A Swedish MNC'sgovernment strategy in India

Abstract

The aim with this thesis is to examine and explore how a Swedish MNC in India can achieve a legitimate position by developing and implementing their government strategy. As India is a multicultural country with many strong institutions in society, it is important for an MNC to understand these. By using their government strategy the MNC can gain legitimacy from the government, the industry and societal groups. An MNC must develop strong linkages with government authorities, as the bureaucracy is complex and often inefficient. These linkages serve multiple purposes. Legitimacy from the government is necessary; moreover to operate efficiently an MNC must be able to handle the bureaucracy in order to receive licences, permits and approvals. The theoretical part is mainly constructed by adopting theories and concepts on government strategy and basic institutions analysis.

In order to investigate how government strategy can be formulated and implemented in India, we conducted a qualitative study by using a case study. Volvo Truck Corporation had recently established themselves and implemented their government strategy in India, which made them a suitable case company.

Our research showed that some institutions were undergoing institutional changes, which were triggered by the liberalisation process. The government is moving from being a controller of industry, to instead being a facilitator. We also found that VTC has adopted a government strategy, which was characterised by: respect, patience and flexibility. In doing this, VTC has gained a high level of legitimacy from government as well as from societal groups in India and is thus able to operate efficiently.