A Blessing and a Curse: Institutional Embeddedness of Longstanding MNE Subsidiaries in Emerging Markets

This article examines the institutional strategies of multinational enterprises (MNEs) operating in an emerging market, drawing attention to how longstanding foreign subsidiaries proactively negotiate their involvement with socio-political actors. We build on institutional logics to explain how MNE subsidiaries develop sustained political, cultural, and cognitive embeddedness. Using an inductive, interpretive study of four century-old Dutch MNE subsidiaries with a colonial legacy in Indonesia, we examine these three dimensions of the institutional environment, finding that local employees embedded in both the MNE and the host country sets of logics ‒ rather than expatriate managers ‒ most effectively facilitated sustained institutional embeddedness. Our findings also suggest that embedding practices in host institutional contexts and developing structures that align with host institutional expectations provided a platform for the unfolding of institutional strategies by local employees. However, MNE subsidiaries face contrasting logics between home and host country institutions, placing significant strains on MNEs’ ability to enact change.     

The Driving Forces of Subsidiary Absorptive Capacity

The study investigates how a multinational corporation (MNC) can promote the absorptive capacity of its subsidiaries. The focus is on what drives the MNC subsidiary's ability to absorb marketing strategies that are initiated by the MNC parent, as well as how the subsidiary enacts on this absorptive capacity in order to compete in its focal market. The dual embeddedness of MNC subsidiaries plays a key role in this investigation, as subsidiaries belong to the MNC network and are simultaneously embedded in their host country environment. We argue that subsidiary absorptive capacity is formed as a purposeful response to this dual embeddedness. An analysis of marketing strategy absorptions undertaken by 213 subsidiaries reveals that MNCs can assist their subsidiaries to compete in competitive and dynamic focal markets by forming specific organizational mechanisms that are conducive to the development of subsidiary absorptive capacity. The findings hold important theoretical and practical implications.     

Entrepreneurship at the Local Government Level: Stimulating and restraining forces in the Swedish waste management industry

Abstract

This article explores influential forces on public sector entrepreneurship in two different organizational forms: the local government administration and the local government corporation. In arguing for the need to consider the context of organizational form, this article presents a development beyond existing research on public entrepreneurship (PE) which so far has been conducted only to a limited extent. The inductive analysis identifies factors not previously perceived as influential on PE. These findings support the importance of distinguishing between organizational forms. Finally, the findings can be used for formulating hypotheses possible to test in larger research designs.     

Diffusing 'best practice' in multinational firms: prospects,practice and contestation

This article explores the possibilities and problems of transferring best practice within multinational enterprises. Following a discussion of the literature on the transfer of best practice, we draw on a case study of ABB to highlight some of the issues and problems involved. In particular, we focus on the use of benchmarking as a powerful tool for the diffusion of best practice in ABB. We conclude that under certain conditions the case for the transfer of best practice within multinational enterprises is relatively sound and that the use of internal benchmarking can be a highly effective method of producing such organizational change. However, any form of diffusion has to take into account (a) the local cultural and institutional context and (b) the ability and incentive of local managers to implement best practice.     

跨国公司与东道国腐败程度相互影响机制研究

本文对于跨国公司所面临的腐败问题做了一个探索性的研究,首先指出发展中国家普遍存在的腐败问题会对进入该国的跨国公司产生影响;然后给出跨国公司与东道国制度环境(腐败)相互影响的机制;接着论述跨国公司在东道国的分公司的特殊角色,指出在应对腐败现象时它同时受到多方面的影响;第四部分论述东道国的腐败现象通过哪些方式会给跨国公司造成影响,产生成本;最后论述跨国公司又是通过怎样的途径反过来影响东道国的腐败商务环境的。     

DIVISION HEADQUARTERS GO ABROAD - A STEP IN THE INTERNATIONALIZATION OF THE MULTINATIONAL CORPORATION*

Why are division headquarters of multinational corporations in some cases located abroad? In the multinational corporation the physical location of division headquarters is a problematic issue because of the need for close links both to corporate headquarters and the foreign subsidiaries. This paper develops a model explaining this location as a consequence of power relations associated with the internationalization of the corporation and tests it on a sample of divisions of Swedish multinationals. the results support the view that power relations have an impact on location of division headquarters. One interesting result is the clear indication of countervailing forces, consisting of an attraction force of foreign dominant subsidiaries and a resisting force related to the interests of corporate headquarters.     

Worlds colliding: the translation of modern management practices within a UK based subsidiary of a Korean-owned MNC

This paper explores the factors that served to dislodge an espoused strategy of quality management with ‘soft’ HRM within a British subsidiary of a Korean owned multinational company. Accounts from British and Korean managers revealed competing sets of tensions at three levels: external organizational, intra-organizational, and internal workplace. The case is important for a number of reasons. First, research on UK based subsidiaries tends to have focused upon American and Japanese owned companies, with less evidence from MNCs from later industrialized economies. Second, evidence suggests that MNCs from Korea, Taiwan, and Singapore have been experimenting with Western influenced high-performance work systems – but there is less evidence about how these are actually translated into the workplace. Third, there is a growing literature that suggests that the transfer of management practices in MNCs can be partly understood as a ‘negotiated process’, and disagreements may emerge between organisational actors in respect of the meaning and function of such practices. This article offers further support for this contention and offers insights into how these processes affected day-to-day management of the workplace and undermined the espoused strategy.     

Recontextualising a strategic concept within a globalising company: a case study on Carlsberg's ‘Winning Behaviours’ strategy

A corporate strategy is often formulated on the executive floor at headquarters. However, in order to make it live in an organisation, middle management and employees must be involved and make sense of it. These actors thus contribute to, participate in and enact the strategy in processes where it may take on new meanings and forms. This article investigates how ‘Winning Behaviours’, a strategic concept developed on the initiative of top management at the Carlsberg Group in order to improve global integration in the multinational organisation, was recontextualised. It draws upon interviews and observations as well as documents collected at the company headquarters in Denmark and in its subsidiaries in China and Malaysia. Here, expatriate and local managers tried to give sense to the Winning Behaviours in various ways, and employees brought their own local leadership ideals into play when they tried to make sense of the preferred behaviours and turn them into daily practices. The process of creating a new strategic concept and making it live in other sociocultural contexts was facilitated by headquarters staff in the Human Resources and Communications departments, who thus played an important role as change agents in the ‘glocal’ strategy process.     

Variances in staff-related management practices at eight European country subsidiaries of a global firm

The purpose of this study was to explore possible variances and commonalities in staff-related management practices at different country subsidiaries of the same multinational corporation (MNC). The study was exploratory, using data from ninety-six semi-structured interviews about current practices of management within eight European country subsidiaries. Results were based on 12,000 statements about management practices from staff in different countries. Analysis of the statements evidenced variances and commonalities in management practices in the country subsidiaries studied. It is suggested that variances are attributable to cultural factors, institutional pressures and other societal forces, and that commonalities might be explained by a common organizational culture. A theoretical model has been adapted to explain the conditions under which management practices take place in different country settings.     

Antecedents of organizational identification in multinational corporations: fostering psychological attachment to the local subsidiary and the global organization

This article reports the results of an empirical case study of the antecedents of organizational identification among local managers in a multinational corporation (MNC). Organizational identification, which refers to an individual's psychological attachment to the organization, has gained increasing attention because of its assumed link with behaviour associated with enhanced organizational performance. Yet little work has been done on what fosters organizational identification, particularly within the context of a MNC. Moreover, there is empirical evidence showing that managerial employees of MNCs draw a distinction between their local subsidiary and the global organization as manifest in separate group identifications. This suggests that there may be differential sets of antecedents of identification with the local subsidiary and with the global organization. The results of the present study indicate that there are different sets of factors that promote identification with the local and global levels of the organization. The results further show a complementarity of causal variables; identification with the local subsidiary is fostered primarily by factors which pertain to the local company context, while identification with the global organization is fostered primarily by factors which pertain to the MNC as a global entity.     

Foreign location decisions by US transnational firms: An empirical study

The paper aims at identifying the variables that are significant in determining the choice of host countries for manufacturing subsidiaries of US transnational firms. The approach that is taken is to relate variables that on the basis on a priori theoretical reasoning influence foreign location decisions, with (a) total market penetration by US firms and (b) the choice these firms make between exporting to their foreign markets and on site manufacturing. Location decisions are viewed as emerging from the interaction of characteristics typical to the industry of the transnational firm and factors specific to potential host countries. Particular attention is devoted to finding out whether locational choices and market shares are interdependent. The sample of observations under investigation consists of the activities of US majority-owned subsidiaries, classified in fourteen industry groupings and operating twenty countries. Sub-samples of countries are also studied. It is found that for the European countries, in particular EEC members, market penetration is dependent on local manufacturing.     

Climate Change and Reorganizing Land Use: Flood Control Areas as a Network Effect

Although climate change appears to be a relatively new public issue, it has not emerged onto a tabula rasa; it affects ‘traditional’ policy sectors. How, then, does this ‘new issue’ interact with established organizational processes, and how is climate change ‘operationalized’ in local practice? Since major events linked to climate change include such things as desertification, climatic migrations, floods and landslides, one might assume that one of its main implications would be a substantial change in land use, or at least a transformation in land organization and management. This article explores the implementation of a ‘flood control area’ as an adaptation practice in the face of climate change. What theoretical and empirical tools should analysis adopt to account for the multiple actors, types of knowledge, artefacts, socio‐technical systems and governance configurations engaged in developing such practices? In other words, to what extent does climate change become a reorganizing category? This article adopts a theoretical approach inspired by actor‐network theory and considers adaptation practice not as a standardized top‐down solution, but as the result of specific local connections among actors, materials and discourses. The analysis suggests that climate change is indeed a reorganizing category, but one that depends on the specific local materializations of the adaptation measure.     

Conceptualizing entrepreneurial capital in the context of institutional change

This paper explores the building of entrepreneurial capital from an entrepreneurship and contextual/institutional position. In taking this position, it is possible to understand “entrepreneurial capital” as the content of the process that unfolds when individuals are exposed to certain characteristics of the environment. Drawing on findings from an ethnographically inspired longitudinal case study, the paper identifies the various actions attributed to entrepreneuring actors. Using the context of Poland as an illustrative case, the paper traces a variety of entrepreneuring accounts which appear to define entrepreneurial capital. This in turn provides a preliminary theoretical framework for the nature and the key elements of entrepreneurial capital. The study indicates that entrepreneurial capital is relationally and contextually constituted. The findings draw attention to the value of entrepreneurial capital in the context of an organizational and institutional change process that (1) involves the active creation Lachmann (Organization Studies 31: 219–244, 1986) of entrepreneuring actors within an organizational and societal context, (2) creates beneficial and supportive conditions that incorporate internal (organizational, personality) and external (environmental) resources for entrepreneuring, and (3) is facilitated by the entrepreneuring process. Finally, implications for entrepreneurship inquiry are drawn.     

Public enterprise governance

Abstract

Public enterprise management displays unique inherent tensions between its ‘publicness’ and ‘enterprise’ elements. The complex dynamics between these two sometimes overlapping and sometimes conflicting notions in managing a public enterprise can be interpreted with the aid of the concepts of governance. Public enterprise governance can be understood in terms of the dynamics among actors from the state, market and civil society in governing and managing collective affairs, each of very different values, norms and logics. This article introduces an analytical framework using the concepts of governance and public enterprises, and applies it to the wholly government-owned railway corporation, Kowloon – Canton Railway Corporation (KCRC) in Hong Kong. The KCRC can be regarded as commercially successful but this profitable public corporation has been plagued with many public governance controversies in its twenty-year history. Lessons from three major cases (the golden handshake affair, Long Valley saga and Siemens fiasco) are discussed.     

Three Modes of Competition in the Marketplace

Competition is often thought of a fairly obvious thing, a rivalry. In a market context the meaning of competition is usually taken to be a rivalry among the sellers. The article seeks to broaden this view by considering other competitive relationships in the marketplace. Using the simplifying assumption that there are only two types of market actors, sellers and consumers, there are three possible types of relationships or interdependencies among these actors in a market. In competitive terms this includes the familiar competition among sellers but there is also the possibility of competition between sellers and consumers, as well as competition among consumers. The article outlines essential characteristics of the three modes. Implications of multi‐mode competition for market performance and welfare are discussed.     

Intra-organizational impediments to the development of shopfloor competence and commitment: The case of a Finnish-owned greenfield paper mill in East Germany

Building new production facilities abroad poses a huge challenge to the human resource practices of a firm. This is because reaching the required level of competence and commitment is not possible without adjusting these practices to the characteristics of local personnel. However, there are few empirical studies that highlight how such situations have actually been handled. This paper makes a contribution through an examination of the initial phases of a Finnish-owned greenfield paper mill in East Germany. The evidence used in the study includes documentary analysis, interviews and discussions with actors at the different organizational levels. The case study demonstrates how managerial subdivisions and the absence of local actors from the higher levels of the managerial hierarchy impede development of competence and commitment among the new employees. The evidence presented suggests that the involvement of various organizational actors in human resource management processes should be given more weight in further research.     

THE ORGANIZATIONAL CORRELATES AND CONSEQUENCES OF SUBCONTRACTING: EVIDENCE FROM A SURVEY OF SOUTH WALES BUSINESSES

Recent interest in the growth of subcontracting, as part of a broader trend towards greater ‘flexibility’in forms of employment relationship, has not as yet been matched by a full consideration of its organizational and managerial implications. In particular, the question of whether or not subcontracting has an impact upon, or is affected by, the organization's structural characteristics remains largely unexplored. the aim of this article is to report findings from a detailed study of subcontracting practices across a sample of British industry, which focuses upon the relationship between subcontracting and organizational characteristics. the results indicate several important points about the practice. Firstly, that there is wide variation in the use of subcontracting across industry, although the overall extent is limited. Secondly, that variation in the practice is significantly related to basic firm characteristics - namely, industrial sector, type of production system and pattern of ownership and control. Thirdly, that, on balance, subcontracting is associated with more, not less, structural complexity. Finally, that this greater complexity is found in particular types of firms - notably, outside the manufacturing sector, in mass and process production systems and amongst British independents and subsidiaries, rather than in their foreign competitors.     

The effect of international staffing practices on subsidiary staff retention in multinational corporations

This paper contributes to the scarce body of research on employee turnover in multinational corporations' foreign subsidiaries and addresses some key issues related to dealing with turnover of local staff. Based on a literature review, I conceptualize locals' perceived career prospects and their organizational identification as key variables mediating the relationship between international staffing practices and local staff turnover. In a second step, the paper develops instruments that help international firms to retain their subsidiary staff. Specifically, I focus on how international staffing practices need to be configured to ensure employee retention and I derive moderating factors. My arguments are integrated into a framework for the effect of international staffing practices on subsidiary staff retention in multinational corporations.     

Interference among conflicting institutions and technical-economic conditions: the adoption of the Assessment Center in French,German, Italian,UK, and US multinational firms

We analyze the adoption of the Assessment Center (AC), one of the most complex human resource management techniques, in 161 British, French, German, Italian and US multinational firms both at the headquarters and in their Italian subsidiaries. Combining both quantitative analysis and qualitative accounts, we investigate how different and partially contradictory institutional influences stemming from national business systems and professions, global corporate networks and professions, and different technical-economic conditions affect the adoption of the AC. Our study shows that AC-diffusion is similar at headquarters level in all national contexts, testifying to the paramount importance of transnational institutions of Anglo-American origin for MNCs of any nationality, despite great local variation in the degree of institutionalization of the AC, which ranges from fully-fledged support in culture and the professions as, for example, in Germany, the UK and the USA, to weak or negative backing as in France and Italy. However, the study also reveals how different characteristics of the corporate field of firms with headquarters in different countries, as well as organizational size and labor market conditions, still explain adoption of the AC in their subsidiaries in Italy.     

Dell公司的组织结构与战略的匹配分析

生产力水平决定了企业组织结构模式的发展趋势,在一定生产力水平制约下,企业采甩什么组织结构,是与它采取什么企业行为密切相关的。而决定企业行为的正是企业所制定的战略。企业的组织结构不是一成不变,而是随着企业所处的内外部环境的变化及企业所调整的战略进行企业组织结构的调整。文章主要论述了组织结构与战略的基本关系。以戴尔公司为例,对戴尔公司的战略的演进和根据战略如何调整其组织结构。使两者互相促进对方的发展的分析,DeH在匹配的过程中忽视的问题．这些问题是否可以不予置理？最后从Dell公司的战略与组织结构的匹配过程中的启示。给出了组织结构如何适应战略过程的原则与对策建议。