Reputation and Political Legitimacy: ITT in Chile, 1927–1972

Marcelo Bucheli, Erica Salvaj

Research output: Contribution to journalArticlepeer-review


The literature on multinational corporations argues that a foreign firm can legitimize its activities, improve its reputation in a host country, and reduce the risk of hostile actions by the host government (including expropriation) by approaching and incorporating influential members of the domestic elite in its business. By using the concept of obsolescing political legitimacy, we argue that this legitimating strategy can lead to a loss of reputation and eventual illegitimacy when the host country undergoes significant social and institutional changes. When these changes take place, the domestic society can perceive that the multinational benefited from a previous social and institutional order increasingly considered as illegitimate. Under these circumstances, the new order will question the legitimacy of the multinational's operations, increasing the risk of expropriation. We illustrate our hypothesis with the case of the political strategies of the International Telephone and Telegraph Company (ITT) in Chile in the twentieth century.

Original languageEnglish (US)
Pages (from-to)729-755
Number of pages27
JournalBusiness History Review
Issue number4
StatePublished - Dec 2013

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting (miscellaneous)
  • History


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