۱- Introduction

۲- The framework: global production network (GPN) and corporate strategies

۳- Bridging categories: corporate strategies in GPNs

۴- Vale S.A. in Itabira

۵- Corporate strategies

۶- Final remarks

References

Abstract

We argue that the power exercised by transnational corporations is context-dependent and that corporate strategies are embedded in institutional settings and related to non-economic forms of action. We apply the Global Production Network framework, introducing the notion of corporate strategy. We focus on the mining sector, assessing Vale S/A’s capacity to influence political decisions. The research is based on a literature review, analysis of documents, and fieldwork in Itabira, Minas Gerais state (MG), Brazil. We found that relationships involving corporations, institutions and social movements are framed by embeddedness conditions, power capabilities, and continuous value capture, locking actors into a well-established discourse on development. In addition, we briefly apply this framework of analysis to link the case findings to the disaster that took place in Brumadinho (MG), in January 2019.

Introduction

This article examines the links between the capacity of transnational corporations (TNCs) to exercise power and deal with relational pressures exerted by non-economic actors, all of which are rooted in institutional environments. The central hypothesis is that the power exercised by TNCs is context-dependent: as far-reaching as their economic action may be, corporate strategies are invariably embedded in institutional settings and related to non-economic forms of action. Therefore, the different ways in which these strategies are designed and implemented are decisive for a TNC’s prospects of ensuring ongoing value capture. We focus on the mining sector and on a major iron ore producer, Vale S/A, in order to provide an account on how relationships are framed by embeddedness conditions, power capabilities, and continuous value capture, locking economic and non-economic actors into a well-established discourse on mining and development. In the paper, we use relational approaches focused on social and political actors in order to provide a detailed scenario of interaction. We apply the Global Production Network (GPN) framework, critically employing the key categories of embeddedness, power, and value to understand the extractive industry. Also, we introduce the notion of corporate strategy, which accounts for Vale’s capacity to resist local pressures.