Business in conflict contexts: Field studies from Israel-Palestine and conceptual theorizing

Violent conflict is abundant, yet management research has only limitedly featured such contexts. Fundamental questions such as ‘what makes people of opposing groups work together in business?’, ‘how can business cooperation be sustained over time?’ and ‘when does business cooperation impact societal conflict?’ have remained largely unexplored. Given that many global value chains pass through societies affected by conflict, and that firms are crucial in sustaining livelihoods while also being important places for groups to meet, research into business cooperation in the context of conflict continues to be relevant. This dissertation aimed at gaining a better understanding of how business gets impacted by, and simultaneously impacts its context of conflict. Through qualitative field studies on the Israeli-Palestinian IT industry – a growing industry that brings Israeli and Palestinian professionals together to work on software – and conceptual theorizing, the author provides a unique insight into how people experience business cooperation despite ongoing violence and how intergroup contact within firms could further aggravate or help reduce conflict. The field studies are based on a total of more than 80 in-depth interviews, more than 900 documents, and memos of personal reflections during data collection. Two field visits of a month were conducted in 2019 and 2022, which helped to better understand life in Israel and the Palestinian West Bank. The conceptual work draws on studies from across the globe which helped to gain a more parsimonious view of how and when business cooperation may impact conflict, combining social psychology, conflict transformation, and management research. Key insights are the following. A) Individuals need to navigate societal meaning structures projecting the other as “enemy” when explaining their work to themselves and others even though a strong business case for cooperation exists. Israeli IT professionals do so by politicizing cooperation, pointing to the positive impact of cooperation on peace, and highlighting their personal involvement, while Palestinian IT professionals are depoliticizing cooperation, pointing to economic survival under occupation, and disguising personal involvement. B) Despite shocking episodes of violence, industries around cooperation can emerge and be sustained over decades, as the Israeli-Palestinian IT industry is still growing. Drivers of sustained business cooperation are that individuals feel to access hard-to-find resources and to contribute to statebuilding, Additionally, while the perception of the other can change from negative to more positive, general perceptions of conflict remain mostly unaffected. C) Different strategies for managing intergroup contact within firms can, over time, perpetuate, further aggravate, or help reduce societal conflict. Firms’ contact strategies shape various forms of trustbuilding, developing intergroup views, and realizing intergroup interdependency, which impact societal intergroup relations and help explain when firms contribute to conflict transformation or when they perpetuate and even aggravate conflict. These insights form the basis of several theoretical contributions to management research. The field studies are expanding knowledge of how individuals cope with societal meaning structures inhibiting their work, and to knowledge of how ethnonational conflict can be challenging business cooperation while individuals may keep being engaged and thus sustain cooperation despite ongoing violence. The conceptual work contributes to knowledge of the role of firms in conflict contexts, highlighting the importance of managing intergroup relations within firms as they amplify to societal intergroup relations and thus inherently impact conflict. In light of practical implications, managers may want to pay closer attention to societal meaning structures and intergroup relations, especially when working on social impact in conflict contexts, policymakers may note positive examples of private sector development as an alternative form of development aid, and business schools may use this type of research to further expand education on topics related to business in conflict contexts.