The Diplomat
The Spanish Exporters and Investors Club has published a technical note with a catalog of good practices to reinforce the legitimacy of Spanish companies abroad.
The document, prepared by Lourdes Rivero Gutiérrez and Alicia Blanco González, professors at the Universidad Rey Juan Carlos, was commissioned by the Exporters’ Club through its Committee for Reflection on Internationalization, made up of prestigious professionals from the academic world, companies and public administrations.
The concept of legitimacy is understood as “the generalized perception that society has of the activities carried out by a company” based on “cultural alignment, regulatory support or consistency with the relevant rules and laws of the country where the company operates”, the Club indicated in a press release. “Legitimacy, as a concept that is part of modern strategic management, solves many of the problems that companies encounter when they aspire to do business in international markets,” added the organization, which brings together Spain’s leading exporters.
The six best legitimization practices, according to the study, are the company’s local presence, the establishment of alliances with prestigious local partners that have local recognition, credibility management, the company’s technical and managerial capacity in the environment of stakeholders, investors and clients and partners, the company’s identification with the Spain brand and with the Europe brand, and the existence of a differentiated, innovative or highly specialized proposal in a specific field.
“It has been proven that legitimacy influences financial results, share price, ROA (Return on Assets, the ratio between profit and total assets), non-systemic market risk, survival of new companies, internationalization of companies, stakeholder management or consumers’ purchase intention”, stated Antonio Bonet, president of the Exporters Club.
In the opinion of the Exporters’ Club, once the COVID-19 threat disappears, the market should normalize and exports should recover quickly and in a stable manner, which makes it essential for companies that have not yet taken the step of internationalization to start preparing to face this challenge. “As in other crises, exports will once again be a major driver for improving the situation and gaining market share abroad, helping the economic recovery in a very valuable way. Companies must therefore be prepared to take advantage of a new cycle of expansion,” Bonet added.
