Adapting a Lean Production Program to National Institutions in Latin America: Danone in Argentina and Brazil

This article argues that national institutions identified in the varieties of capitalism approach have a significant impact on the degree of fidelity and extensiveness of best practices adapted by geocentric multinational corporations in host countries in emerging markets. To illustrate this argument it shows how differences in national institutions between Brazil and Argentina caused Danone to adapt a lean production in radically different ways in each of these countries. Both of the programs implemented had low degrees of fidelity and extensiveness to the original best practice. This article contends that in Argentina strong labor laws and the ability of unions to negotiate significant salary increases combined with a desire of workers to have individual pride in their jobs caused Danone to empower them individually instead of creating teams as foreseen in this company's original lean production program. In Brazil the weakness of unions combined with labor laws that promote employee turnover and the desire of workers to improve their salaries caused this company neither to empower workers nor create teams. Instead, it motivated workers by providing them the previously unavailable opportunity to become a manager.     

Antecedents and Outcomes of Political Tie Intensity: Institutional and Strategic Fit Perspectives

Although international nonmarket strategy research has highlighted the importance of political ties, it is still unclear why some foreign subsidiaries are more politically active than others and what conditions may render political practices beneficial in a host country. We argue that foreign subsidiary political tie intensity—the extent to which senior managers provide time and resources in informally dealing with government officials for nonmarket purposes—will be influenced by political institutions in their parent's home country, especially when the MNE parent attempts to protect foreign subsidiary resources. Additionally, we assert that fit between a parent's home country political institutions and foreign subsidiary political tie intensity will positively affect subsidiary performance. We employ primary data collected from 181 foreign subsidiaries in the Philippines and find support for our hypotheses. This study advances international nonmarket strategy research by highlighting how an MNE's home country political institutions shape subsidiary political networking and strategic performance outcomes in host country environments.     

Seeds of Corruption? The Contingent Role of Ties to Politicians and Foreign Subsidiary Relations with Government-Sponsored Financial Institutions

In drawing from transaction cost economics and social network theories, this study examines the influence of corruption as a determinant of foreign subsidiary formal contracting practices with government-sponsored financial institutions. We hypothesize that lower corruption distance (between parent home and host countries) and higher perceived corruption (in host country) are positively related, and mutually reinforcing, when considering a foreign subsidiary's propensity to formally contract with government-sponsored financial institutions. We also suggest that these relationships strengthen with the intensification of political ties to government officials who can offer preferential political services via contractual agreements, changing the nature of market transactions in favour of a foreign subsidiary. We found support for our hypotheses using data from a sample of over 350 subsidiaries located in the Philippines and Thailand.     

Constants and Variants in Political Exchange

ABSTRACT: The purpose of this article is to offer some clarification on developments in a number of European countries in the postwar period. The crux of the analysis are the relations between the huge, functional interest-group organizations and the political system and government, and in particular the trade unions. The intent is firstly to overcome the uncertain and often indistinct use of the concepts of political exchange and corporatism, then to offer an explanatory framework in which these modes, which have prevailed in Capitalist countries, can be grouped under the model of political exchange, in so much as the trade unions’representation of interest groups is affected by the factors and political advantages at stake. It then clariries the essential connotations of this model, which can be considered as constants compared to the variants within it, and also deals with the two types of political exchange predominant in the period and countries surveyed, namely pluralist and cor-poratist variants. Finally the author stresses the need for empirical studies in postwar Europe, to check the acceptability and realism of the model used and test the validity of the theses here outlined, that is, that there are several variants — or strategies — of political exchange between trade unions and the governments and political system.     

Twenty Years after the Hot Autumn: Work and Politics in Italy from Rupture to Change

Abstract. In the first paper the authors make a critical analysis of the interpretations and models generally used for it caso italiano(the Italian Case) and propose explanations that are not one-sided, and that take into account all the elements of continuity which characterised the various phases of these last twenty years. The second paper examines the institutional features of the Italian industrial relations system, and underlines its ‘constant characteristic’. that is. its under-institutionalisation. The author emphasises the negative effects of these institutional shortcomings, and shows concern that the much exalted ‘flexibility’ of the Italian system could be detrimental, rather than positive, as it derives from these shortcomings. The note by Guido Romagnoli. attempts to use some theoretical statements on union behaviour, as the key to interpret the events of the Italian case. The author then indicates some aspects and reasons for the crisis of Italian unions. The fourth paper examines the relationship of the unions with the Italian political system over the last twenty years. This article suggests that it is characterised by considerable continuity in stabilising this political system, both in phases of strength and in times of weakness. This stabilising role has. however, not been reciprocated; in fact, not only has the political system not stabilised the unions and industrial relations, but has become a major obstacle to their strategic reorientation. The last paper in this group of essays on the Autunno Caldo offers what could be termed an ‘institutional’ explanation of union continuity, analysing the various phases of collective mobilisation. political exchange and flexibility, and examines the relationships between the social actors during these phases. The selection of papers published here is in memoriam of our colleague and friend Guido Romagnoli, who suddenly died shortly after the conference. For this reason it includes the outline that he presented at that conference which he could not develop into a full article.     

Between a rock and a hard place: Internal- and external institutional fit of MNE subsidiary political strategy in contexts of institutional upheaval

We investigate how subsidiaries' political capabilities in emerging markets are not just shaped by their home- or host country institutions, but by both simultaneously - presenting a dilemma for subsidiaries of multinational enterprises (MNEs) in host countries. Subsidiaries need to develop CPA that simultaneously “fit” parent company requirements and “external fit” requirements in relation to the host environment. Achieving this dual fit is particularly difficult in volatile host contexts, where the value of political capabilities changes rapidly. Subsidiaries face a dilemma because the easily transferable capabilities – that draw on parent resources – lose value due to their decreasing “external fit” with the host country's volatile institutional environment. Conversely, the most valuable relational political capabilities lack “internal fit,” as they may not be legitimate in the home environment. To understand how firms deal with this dilemma, we develop a typology of political capabilities that takes into account their transferability/stickiness and their dynamic institutional contingency in the host country. Our study shows that MNEs - even from institutionally very different economies - can successfully transfer political capabilities to develop effective CPA in a volatile political environment. Yet, as political risk becomes discontinuous, this strategy may reach its limits.     

Institutions and Service Employment: A Panel Study for OECD Countries

Abstract. We live in a service economy, but the extent of development of service employment differs across developed countries. This paper assesses the role of structural factors and institutions in explaining the common patterns and main differences in the recent expansion of service employment in OECD countries. It finds that GDP per capita, the size of the government sector and the extent of urbanization are positively associated with the service employment share. However, the evidence suggests that laws and institutions such as product market regulations, unions and more coordinated wage‐setting systems are hampering the expansion of service employment.     

Unemployment May Be Lower if Unions Bargain over Wages and Employment

This paper addresses the question under which circumstances unemployment can be lower if unions bargain over wages and employment in a general equilibrium framework. Thereby, it turns out that the unemployment rate may negatively depend on the wage rate, if the unemployment compensation scheme contains a constant real term in addition to the replacement ratio component. This is, compared with a pure replacement ratio scheme, the more plausible formalization of the real world’s compensation systems, at least for European countries. Besides the theoretical analysis, the paper also derives political implications by identifying the relevant parameters for the decision on whether weakening unions will be a good strategy for an economy to overcome its unemployment problem.     

Prospects for industrial co-operatives—An alternative to industrial democracy?

There is a growing interest in industrial co-operatives, although the idea itself is by no means a modern one, having long been regarded as the ideal of a socialist system. There are comparatively few worker co-operatives in the United Kingdom, but rather more of them on the Continent. The article examines the reasons for this and the problems facing co-operatives —particularly in relation to the law, taxation and the trade unions.     

Code Breaking: How Entrepreneurs Exploit Cultural Logics to Generate Institutional Change

If institutions are durable, how do they change from within and from without? We build on the emerging synthesis of social movement theory and institutional theory and articulate how institutional entrepreneurs from within and without deploy pre-existing cultural logics to push forward their institutional projects. We develop propositions, which show how the success of these framing activities is contingent on political opportunity, and illustrate them with a wide range of extreme cases.     

实物期权视角下政治关联与民营企业的成长价值

利用实物期权理论,利用867个民营上市公司样本,实证分析了民营企业先天"出生"和后天"红顶"这2种政治关联形式对企业成长的作用,其中,前者指民营企业家和高管是否拥有政府工作经历,后者指是否拥有人大政协的政治身份。实证结果发现,政府经历型关联提高了企业增长期权价值,但是政治身份型关联却降低了企业增长期权价值。民营企业的政治关联并非必定带来绝对收益,而是具有"得到与付出"双重效应。在经济转型过程中民营企业的战略意图逐渐向市场化倾斜。     

Multinationals’ political activity for institutional change: Evidence from Spain during the international crisis of 2008

International crises generate uncoupling between multinational enterprises (MNEs) and the institutional environment. In these settings, industry associations of MNEs have an incentive to engage in institutional change by taking a role as institutional entrepreneurs in order to generate change within the existing, unsuitable institutions. However, MNEs can also try to avoid such institutions or try to adapt to them. Because the antecedents and outcomes of these three forms of engagement in institutional change (institutional avoidance, adaptation, and entrepreneurship) have been scarcely studied in Europe, this reflection examines the case of Spain during the international crisis and analyses the coordinated action of MNEs through their associations in seven industries. The discussion of 30 pieces of evidence regarding the engagement in institutional change in Spain suggests a model that proposes relevant antecedents of different forms of engagement and the expected outcomes resulting from the chosen forms, among them: co-evolution and co-involution.     

The impact of labor unionization on monitoring costs

This paper analyzes the impact of labor unionization on monitoring costs. Our findings show that monitoring costs are significantly higher for unionized firms. We demonstrate that the more complex, industrial relations structures that characterize unionized firms increase monitoring risks and corporate costs. We further show that monitoring agents consider political ideology supportive to labor unions as a parameter that enhances relevant costs. Additionally, we demonstrate that monitoring costs are lower in the presence of employee share ownership. We conclude that labor unionization increases the costs of monitoring agents, a burden which is amplified or mitigated depending on the structure of industrial relations.     

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.     

Unionization Structures in International Oligopoly

We examine how competition in international markets affects a union's choice of wage regime, which can be either uniform or discriminatory. Firms are heterogeneous with regard to international competition. When unions choose their wage regimes sequentially, a discriminatory outcome becomes more likely when international competition increases. However, for intermediate levels a union may stick with a uniform wage regime even if the rival union adopts a discriminatory regime. When competition is sufficiently intense, both unions revert to the discriminatory regime. Paradoxically only in those latter instances all parties (consumers, workers, and firms) may be better off (each in aggregate) if all unions adopt a uniform wage regime. We conclude that union incentives to coordinate their wage regimes should then also become largest.     

Pre‐Colonial Ethnic Institutions and Contemporary African Development

We investigate the role of deeply rooted pre‐colonial ethnic institutions in shaping comparative regional development within African countries. We combine information on the spatial distribution of ethnicities before colonization with regional variation in contemporary economic performance, as proxied by satellite images of light density at night. We document a strong association between pre‐colonial ethnic political centralization and regional development. This pattern is not driven by differences in local geographic features or by other observable ethnic‐specific cultural and economic variables. The strong positive association between pre‐colonial political complexity and contemporary development also holds within pairs of adjacent ethnic homelands with different legacies of pre‐colonial political institutions.     

Is there a physician union in your future?

Physician unions are in the news. Patient management and patient care decisions are increasingly being taken out of the hands of physicians and put into the hands of "The Suits." To take their case for a return to physician-driven patient care to the people, some physicians are joining unions. Some are even collectively bargaining for salary and other issues that are historically more closely associated with unions. The simple fact is that physician unions exist and the number of physicians joining them is expected to increase. What are the pros and cons of unionization? What motivates physicians to join unions, and what potential negative and positive factors are associated with physician unionization? This article reviews the pros and cons and the issues related to physician unions, for physicians attempting to answer the question, "Is there a union in my future?"     

The Contribution of Work Representation to Solving the Governance Structure Problem

The aim of this paper is to explain in what ways work representation may contribute to an efficient governance structure. The insights from institutional economic theories will be applied to two different kinds of employee participation, namely trade unions and works councils. From the discussion it follows that the latter may be better equipped than the former to play an effective role in corporate decision-making, owing to its specific institutionalisation. The paper concludes with the finding that works councils could fulfil an important economic function, by protecting the interests of the employees as well as those of the shareholders.Several agency problems can be solved. By giving the workers consultation and codetermination rights, this will reduce their dependence on unilateral decisions by the management and may stimulate them to be more cooperative, leading to greater productivity and less monitoring costs. By giving the workers information rights, the management becomes more disciplined as well. Because contrary to trade unions the works councils usually do not determine the terms of employment, the owners of the firm do not need to fear that the employees will be able to extract a portion of the firm's profits.     

Institutional Change and Debt-based Corporate Governance: A Comparative Analysis of Four Transition Economies

Countries in transition now represent a significant sector of the international political economy. One of the challenges that they face in moving towards market-based systems and institutions is that of transforming the structure of business enterprises into forms more compatible with capitalist economies. Corporate governance is an important part of this. We argue that, certainly during an interim stage whilst equity markets are weak or non-existent, debt finance has a useful role to play. However for this to be possible there are some important institutional changes that are necessary in order to provide the infrastructure within which debt finance can operate effectively and efficiently. We then present an overview and evaluation of the progress of change in four selected transition countries. This revised version was published online in July 2006 with corrections to the Cover Date.     

Corporate Political Activity: A Literature Review and Research Agenda

This paper reviews the diverse literature on corporate political activity (CPA) and develops a framework that details and integrates existing research in this field. A systematic analysis of extant CPA literatures is conducted to order them into domains that have implications for organizational performance. The paper is structured into three such domain emphases, which require further research investigation: resources and capabilities focus; institutional focus; and political environment focus. The contribution of each to an understanding of CPA in pursuit or defence of corporate competitive advantage is discussed. The authors also suggest that the internationalization of business, including the more recent emergence of developing country economies and companies, presents scholars with the challenge of understanding CPA in more varied institutional settings. CPA practices continue to expand as commerce goes increasingly global and, consequently, involves a wider array of political actors and institutions. The paper contributes by increasing the clarity of CPA classification, reflecting on the implications of a multi‐polar world for CPA research and advancing future agendas for scholars in this research community.