The Survival Tactics Of Transnational Corporations In Zimbabwe Under Economic Sanctions

This research, The Survival Tactics of Transnational Corporations (TNCs) inZimbabwe under Economic Sanctions: The case ofBritish America Tobacco (BAT)Company,seeks to find out how Transnational Corporations (TNCs) continue operating inhostile economic environments including economic sanctions in a host country. Thisstudy will look into the mechanisms that TNCs ascribe to in order to maintain operationsin the host country as well as their reasons for their continued operations in suchconditions. While the study zeros in on Zimbabwe, which typifies a state under economicsanctions. On the other hand, British America Tobacco (BAT) Company is theTransnational Corporation (TNC) struggling for survival in a hostile economicenvironment.The study is premised on the belief that TNCs would only operate in socio-politicaland economic stable environments or countries, which above all guarantees the firmprofit. This is but not the case for BAT in Zimbabwe, a Southern African country inturmoil from an economic crisis and sanctions.The study is informed by Albert O. Hirschman (1970) who postulated SurvivalTactics as a response of Firms, Organizations and States to decline. The study thereforeanalyses mechanisms chosen by the TNC to continue operating in a host country which isfaced by economic decline. The options are Exit, Voice and Loyalty.BAT showed instances of the use of all the three options that is Exit, Voice andLoyalty as a response to changes and uncertainties of the Zimbabwean economy undereconomic sanctions. And of all the options explored Loyalty was the most appliedmechanism by BAT.The findings reflect that conditions of operations matter less in maintaining andfurthering operations of TNCs in a host country. Even though it might seem irrational forthe TNCs to continue operations in a country faced by hyperinflation, lack of foreigndirect investment and restricted international political and economic interaction of thecountry that badly affects the purchasing power of the domestic market, still the TNCs continue to operate for a more bigger objective, including unique quality of the productavailable in the host country.The study concludes that there has been a shift in the relations between the TNCsand its mother country and the transnational corporation and its host country. This hasbeen influenced by the transnational corporation’s need for profits. In this case the BritishTobacco Company in Zimbabwe has embraced the political, economic and monetarypolicies that Zimbabwe has implemented in order to stay afloat under economic sanctionsimposed by the British American Tobacco Company’s mother country, the UK.