How MNE subsidiaries transfer HRM practices in distant environments: A tale of two IKEA subsidiaries

While most research in the international business field focuses on the impact of the national institutional environment on multinational enterprises (MNEs), this paper explores the opposite relationship—the role and impact of MNE subsidiaries on the host country institutional environment. I analyze the subsidiaries' agency in the transfer activities of human resource management (HRM) practices by bringing the case of IKEA subsidiaries in Korea and Japan and find that these subsidiaries not only adapted to pressures arising from an institutional distance but also played an important role in influencing the institutional arrangement for employment system of their host countries. With a contextualized agency model, this study finds that institutional and organizational contexts that these subsidiaries are embedded in shaped their agencies and strategic responses and co-evolved with their host institutional environments while transferring HRM practices. These findings have implications for the IB and IHRM field, as they highlight the potential of MNE subsidiaries as agents.     

An Institutional Contingency Perspective of Interlocking Directorates

Interlocking directorates, in which companies are linked by the directors that serve on their boards, exist globally. It is an expression of hegemonic power exercised by the elites of a society, and has been studied with great interest by organizational sociologists, management scholars and financial economists. The interest emanates from the effect that interlocks have on wealth creation and distribution, and from the perspective that interlocks can tell us how elites in a society are networked. Although diverse theoretical perspectives have informed the research on interlocking directorates, this review shows that the Anglo‐American perspective dominates. This dominance is notable not only in the volume of Anglo‐American studies, but also in theories employed by international studies. For example, most international studies use agency theory to investigate the welfare implications of interlocks, but many countries do not use the Anglo‐American legal regime, which is the basis for agency theory. This paper expands the theoretical basis of the review to include class hegemony and resource dependence, to articulate better the causes and consequences of interlocks in the international context. The paper also extends theory by showing that institutions have an important influence on interlocks, so that the latter can be welfare‐depleting in one institutional setting, while welfare‐enhancing in another. The review concludes by discussing the implication for future research.     

Institutional agency by MNEs: A review and future research agenda

Although the study of institutional agency by MNEs is gaining traction in the IB literature, there are gaps in our understanding of how MNEs purposively engage with institutions in home and host markets. By systematically reviewing 73 articles in 26 journals over a 17-year period, I assess the embeddedness of institutional agency in the IB field; and present key findings along societal and organizational field triggers, individual and organizational enablers and types of institutional agency, as well as the consequences for institutional maintenance, creation and transformation. The review demonstrates that very few IB studies explicitly examine MNEs' intentional actions in relation to institutions. Consequently, I call for an advancement in MNE strategy and structure debates to account for the ways in which MNEs can address institutional contradictions. I develop propositions on these as well as micro-level activities that offer opportunities for MNEs to display institutional agency, setting a clear agenda for future research.     

Why Do Established Practices Deinstitutionalize? An Actor‐Centred Approach

Drawing on 63 in‐depth interviews from three American multinationals, we investigate how individual actors negotiate the interplay of insider and outsider pressures on the deinstitutionalization of four employment practices in an institutionally complex setting. Existing institutional theory highlights different degrees of deinstitutionalization, from complete abandonment of practices to partial erosion, with an underlying presumption of organizations and actors striving for stability and stasis. However, the present study finds that actor reconciliation of interacting insider and outsider pressures can result in three distinct phases of deinstitutionalization (complete, partial and negotiated deinstitutionalization), which crucially coexist, suggesting perpetual instability and change. The authors conceptualize the individual‐level enabling conditions for each of these different phases of deinstitutionalization, highlighting a range of actor responses as well as differences in how actors exercise agency across each phase. Examining actor negotiation of the interplay of insider and outsider pressures improves our understanding of how individuals engage in differential institutional work when responding to practice deinstitutionalization.     

Strategy-as-Practice: Taking Social Practices Seriously

This article reviews research in Strategy-as-Practice (SAP) and suggests directions for its development. The power of this perspective lies in its ability to explain how strategy-making is enabled and constrained by prevailing organizational and societal practices. Our review shows how SAP research has helped to advance social theories in strategic management, offered alternatives to performance-dominated analyzes, broadened the scope in terms of organizations studied and promoted new methodologies. In particular, it has provided important insights into the tools and methods of strategy-making (practices), how strategy work takes place (praxis), and the role and identity of the actors involved (practitioners). However, we argue that there is a need to go further in the analysis of social practices to unleash the full potential of this perspective. Hence, we outline five directions for the further development of the practice perspective: placing agency in a web of practices, recognizing the macro-institutional nature of practices, focusing attention on emergence in strategy-making, exploring how the material matters, and promoting critical analysis.     

Institutional work through empathic engagement

A growing body of literature examines how actors engage with institutions and how they prompt institutional change and evolution. This article takes stock of this knowledge and contributes an affective dimension to the study of how institutional entrepreneurs achieve momentum and field-level impact. The article views institutional work as relational agency and conceptualises empathic engagement as a way for institutional entrepreneurs to relate affectively to other actors and induce cooperation. We demonstrate how empathic engagement by institutional entrepreneurs can nurture communities of practice that co-create change in institutional fields. Our argument hinges on the actors’ affective investment and advances the less developed non-cognitive dimension of institutional work. By integrating empathic engagement into institutional entrepreneurship, we demonstrate how institutional entrepreneurs nurture their ability to engage and cooperate with others to diffuse particular values through institutional work. This integration focuses on the way of knowing generated through empathic engagement: the ability to bring about a consensus by creating frames of reference and identities that others are enchanted by and subscribe to, as opposed to using coercive mechanisms.     

Risk Communication as Government Agency Organizational Practice

The dynamics of organizational risk communication is an understudied topic in risk research. This article investigates how public officials at six government agencies in Sweden understand and relate to risk communication and its uses in the context of agency organizational work on policy and regulation. Qualitative interviews were used to explore the practitioners’ views on some key topics in the academic literature on risk communication. A main finding is that there is little consensus on what the goals of risk communication are; if, and how, uncertainty should be communicated; and what role is to be played by transparency in risk communication. However, the practitioners agree that dissemination (top down) to the public of robust scientific and expert knowledge is a crucial element. Dialogue and participation is used mainly with other agencies and elite stakeholders with whom agencies collaborate to implement policy goals. Dialogue with the public on issues of risk is very limited. Some implications of the findings for the practice of risk communication by government agencies are suggested.     

Organizational Social Network Research: Core Ideas and Key Debates

Abstract

Given the growing popularity of the social network perspective across diverse organizational subject areas, this review examines the coherence of the research tradition (in terms of leading ideas from which the diversity of new research derives) and appraises current directions and controversies. The leading ideas at the heart of the organizational social network research program include: an emphasis on relations between actors; the embeddedness of exchange in social relations; the assumption that dyadic relationships do not occur in isolation, but rather form a complex structural pattern of connectivity and cleavage beyond the dyad; and the belief that social network connections matter in terms of outcomes to both actors and groups of actors across a range of indicators. These leading ideas are articulated in current debates that center on issues of actor characteristics, agency, cognition, cooperation versus competition, and boundary specification. To complement the review, we provide a glossary of social network terms.     

Modelling the effects of institutional support and international knowledge on competitive capabilities and international performance: Evidence from an emerging economy

This paper explores the process through which institutional support initiatives contribute to the international performance of firms from the small open economy of Malaysia. We examine both direct and indirect causal effects of institutional support (informational, training, trade mobility and financial aid-related support) on internationalization. We develop a model to address how institutional support initiatives affect the performance of export-oriented or so-called born global firms. From a survey of 250 firms from Malaysia, an emerging Southeast Asian market, we find that government support initiatives do not have significant impacts on firm performance unless examined based on processes of government support initiatives, international knowledge, commitment, competitive capabilities, and international performance. Government support initiatives play a critical role in export-oriented firms from small open economies (SMOPECs) in emerging markets by contributing to a number of contextual deficits that determine the international performance of a firm. This study provides guidelines for policy makers and business owners on how institutional support can facilitate the accumulation of knowledge about international markets, enhance commitment to exports and help firms gain competitive capabilities in the export market for greater success in international markets.     

“We open doors others do not!”: Position and power of foreign institutional networks

Foreign institutional actors (INAs) can act as a liaison between firms and authorities and other power players to navigate bureaucratic structures, both as resource and legitimacy providers in the host market. Building on institutional theory, this study draws from broader organizational sociological literature, to explore the structural position of INAs in a host country context, and engages with fundamental questions of legitimacy, status, and power. It responds to repeated calls that more studies in international business research are needed on the impact of institutional differences, how to obtain legitimacy, and enhance the home country support networks. To understand INAs' position, specifically within the social structure of a bureaucratic host environment, our study uses in-depth interviews with elite actors from the support networks. Japan is chosen for this study as a host market, because it is the European Union's second largest trading partner in Asia, has a strong central bureaucracy, and historically and currently remains a challenging market for Westerners due to complex market entry barriers. The findings provide a new theoretically derived empirical model demonstrating the positional leverage of these INAs, to “open-doors” into a complex environment and offer a nuanced understanding of their formal and informal structural positions of power. The findings also demonstrate a significant overlap between organizational legitimacy and the exemplary status of these INAs in the bureaucratic environment, which enhances and empowers their leverage to reach authorities, press, and other important actors in the market.     

Confucian values and the implications for international HRD

Abstract

The consideration of cultural issues has become increasingly important in scholarly inquiry and explorative practice in international human resource development (HRD). We review and explore the core characteristics of Confucian-based culture in relation to organizations and unfold how these Confucian values may affect organizational and management practices in China and other Asian countries. Five major aspects of Confucianism are examined. They are: (a) hierarchy and harmony, (b) group orientation, (c) guanxi networks (relationships), (d) mianzi (face) and (e) time orientation. The impact of these values on management practices in the Chinese organizational context is presented in four areas: (a) working relationships, (b) decision-making processes, (c) ruling by man (ren zhi) instead of by law (fa zhi) and (d) HR practices. Implications for organizations and international HRD are also discussed.     

The reorganization of legitimate violence: The contested terrain of the private military and security industry during the post-cold war era

We investigate the interplay between institutional structures and agency in the emergence of the private military and security industry (PMSI). Despite its controversial nature, the PMSI has achieved sufficient legitimacy since the end of the Cold War to account at times for the majority of military personnel deployed in Afghanistan and Iraq. We find both structure and agency central to the PMSI's development. The analysis points first to the central roles played by actors with expertise, reputation, and credibility based in sovereign structures, and, second, to structural shifts that reconfigured the military field in ways that both enabled and constrained agency. Various actors lent credibility to new activities that were integrated with and substitutes for previously legitimated approaches by using these openings to discredit prevailing institutional logics and to construct bridges between old and new institutions. However, it is the interplay of structure and agency that affords the clearest view of the expansion of the modern PMSI and the forces fostering and impeding its legitimacy. Our analysis reflects on a central question in organization theory: Where do new industries come from, and what entrepreneurial strategies are employed to establish organizational legitimacy under structural constraints?     

Empowerment through Choice? A Critical Analysis of the Effects of Choice in Organizations

The provision of choice is one of the most common vehicles through which managers empower employees in organizations. Although past psychological and organizational research persuasively suggests that choice confers personal agency, and is thus intrinsically motivating, emerging research indicates that there could be potential pitfalls. In this chapter, we examine the various factors that could influence the effects of choice. Specifically, we examine individual-level factors such as the chooser's socioeconomic status and cultural background. We also examine situational factors such as the content of choice and the number of choices offered. We then expand our discussion on the effect of giving employees extensive choice by looking at its influence on creative performance. In the second half of this chapter, we discuss implications for future organizational behavior research and examine how emerging research on choice making can inform specific managerial practices.     

Unravelling Learning within Multinational Corporations*

This article explores the impact of institutional variation on the extent to which subsidiary firms learn from multinational corporations. Learning is conceptualized here as consisting of two aspects: knowledge flow and reinforcement of or change in routines to incorporate the behaviourist assumptions of learning into the international business field. The research is based on in‐depth case studies that systematically compare the ways in which parent company knowledge diffuses to Polish, Turkish, Italian and German subsidiary firms in the chemical industry. The findings show that even though firms face the same global pressure to integrate and pursue the same international strategy, their learning outcomes are not the same. There is heterogeneous learning as a result of differences in the institutional context of home countries. Where institutional structures are not favourable to learning, the proactive or reactive orientation of actors to identifying future needs and modifying existing schemata – which highlight the importance of human agency – is significant in explaining learning.     

Country institutional environments and international strategy: A review and analysis of the research

We review and analyze the growing body of literature that addresses the institutional context of international strategy. By examining articles in eleven major journals from January 2008 to July 2020, we identify six major categories of international strategies and implementation approaches: market entry and internationalization, political strategies, multinational technology and innovation, multinational corporate social responsibility, multinational headquarters and subsidiary relationships, and international human resources management. A parallel analysis of the relevant institutional variables categorizes institutions into eight types: economic institutions, political institutions, regulatory institutions, normative institutions, administrative institutions, cultural/cognitive institutions, demographic institutions, and knowledge institutions. These eight categories allow us to contextualize the institutional environment in which the six international strategies and implementation approaches are employed. Our review identifies important progress in international strategy research that has yielded a greater understanding of institutional impact on multinational activities. Yet, it also reveals that many areas of international strategy research remain fragmented, highlighting the need for future research and suggesting new directions for such investigations. Our analysis concludes by identifying knowledge gaps in each of the six strategy categories and making a series of suggestions for relevant future research.     

An actor-network perspective on business models: How ‘Being Responsible’ led to incremental but pervasive change

Business models have been studied as organizational value logics, which manifest in the states of cognition, artefacts, and activities. There is no conceptual perspective integrating all three of these states yet. In response, this paper develops a conceptual scaffold of an actor-network perspective: Value logics become programs of action as they are embodied in human actors’ cognition and inscribed into artefacts, forming actor networks that enact business model activity systems. An in depth case study of The Company (anonymized) and of its corporate responsibility initiative ‘Being Responsible’ illustrates the empirical application of this perspective. An analysis of 104 interviews with 72 individuals shows how The Company's business model was enacted by a network of human and nonhuman actors. The Being-Responsible artefact engaged in translation through which it enrolled business model actors to enact a responsibility logic in addition to their commercial logic. This changed the business model incrementally, but pervasively. The paper contributes (1) an integration of existing theory on business model logics manifesting cognition, artefacts, and activities in an actor-network perspective, (2) an extension of research on artefacts, exploring their agency when not explicitly related to the business model; and (3) the development of substantive theory that explains incremental, pervasive business model change through distributed processes of translation. The translation perspective also holds promise for explaining the dynamics of business model creation, maintenance, and radical business model change.     

Freeing organizational behavior from inhibitory constraints

Many organizational policies and practices are based on the view that people's behavior needs to be inhibited to protect against their selfish basic nature. Indeed, a fundamental assumption of theories ranging from social exchange to economic models of organizational behavior is that individuals are primarily oriented to gain good outcomes for themselves. This chapter describes a program of research that raises serious questions about these ideas by showing that disinhibition—prompted by reminding people of times when they behaved without worrying about what others thought—can often lead to more helping behavior, decisions for the greater good in response to dilemma problems, and greater rejection of self-advantageous unfairness. These findings suggest that most people are fundamentally pro-social, interested in securing good outcomes for both themselves and others. This pro-social attitude manifests itself more readily in actual behavior and attitudes when the person in question is freed from some of his or her inhibition. These findings have implications for how one might enhance the full potential of employees in organizations, stimulate helping and creative behavior in teams, improve decision making in organizations, and how we should understand reactions to organizational change.     

The Institutionalization of Third Stream Activities in UK Higher Education: The Role of Discourse and Metrics

In this paper we examine the institutionalization of a new organizational practice around third stream activities in UK higher education from 1994 to 2008. Employing a longitudinal research design, involving archival, survey and contemporary interview data, we show how a new organizational practice diffused through the use of discourse and metrics around commercialization but over time was threatened on pure economic criteria. In response to the threat we explore how actors worked to institutionalize the new practice, reshaping both discourse and metrics to ensure that they were robust so that they could align with the interests and values of major stakeholders. In addition, actors worked to align discourse and metrics, as any misalignment between the two would have undermined the institutionalization of the new organizational practice.     

Organizational Responses to Contending Institutional Logics: The Moderating Effect of Group Dynamics

This paper advances knowledge on how the forms of institutional logics that emerge and become venerated among members of a singular organization in a heterogeneous field are influenced by struggles between contending interest groups. It examines the moderating effect of group dynamics that occur when an organization attempts to balance novel institutional complexity within organizational bounds through its hiring and promotion systems. The authors argue that, while the specific institutional oppositions of heterogeneous fields compel organizational changes, the institutional forms that emerge and become legitimate among members of an organization in such fields are the effects of indeterminate social processes of regularization and breaking of coexisting logics. The paper provides insights into how the negotiations among groups of organizational actors over the process and outcome of institutional change are influenced by asymmetric power relationships yet significantly mediated by their social strategies. The findings reported are from an ethnography of the enactment of institutional changes at a South Korean credit card company following the economic crisis in 1997 and the International Monetary Fund bailout programme.     

Sustainable Luxury Marketing: A Synthesis and Research Agenda

Sustainability has become a pervasive issue for the luxury sector, gaining traction with brand managers, scholars, policy‐makers, the media, and academia. The purpose of this paper is to examine the state of sustainable luxury research in marketing and consumer behaviour by critically reviewing and synthesizing the growing but fragmented body of scholarly work on sustainable‐luxury marketing. The paper critically assesses where, how and by whom research on sustainable luxury is being conducted, and it identifies gaps for future investigation. The paper reviews research published between 2007 and 2018 within major peer‐reviewed English‐language scholarly publications in business, marketing, ethics, fashion, food and tourism journals. The research is identified using the keywords sustainable luxury, green luxury, eco‐luxury and organic luxury. Three core themes emerge from this review: (1) consumer concerns and practices; (2) organizational concerns and practices; and (3) international and cross‐cultural issues. The review confirms that research on sustainable luxury is significantly underdeveloped. This paper provides the first critical and comprehensive assessment and categorization of the emergent literature streams on sustainable luxury. The authors argue for a broader, deeper and more critical research agenda on the relationship between sustainability and luxury. Potential avenues for future research on sustainable luxury are proposed, with calls for theoretical and cross‐cultural reflections that tackle broader systemic and institutional issues within the field.