Stakeholder engagement in a multicultural context: the contribution of (personal) relationship cultivation to social capital

Abstract

While corporate diplomacy is discussed as stakeholder engagement allowing multinational companies to manage relationships, engagement approaches to public relations suggest that organizations, through interaction with their stakeholders, create social capital. This study integrates both approaches, exploring how corporate diplomacy develops social capital. Based on in-depth interviews with public relations executives (N = 25) in the United Arab Emirates (UAE), our results indicate that corporate diplomacy in the UAE relies heavily on stakeholder engagement, particularly with governmental institutions, and consequently builds on dialog and collective decision-making. While governmental engagement is mainly conducted through personal relationship cultivation, engagement with other multinational corporations is based on more distant relationships. However, both approaches appear to create social capital and provide social resources, including loyalty and trust. We conclude that by employing different engagement strategies, corporate diplomacy supports both the corporation and various stakeholders in the host country, and close by discussing implications and future research directions.