The Construction of Risk Management Credibility Within Corporate Boardrooms

Despite various corporate collapses over the last decades, risk management is increasingly influential across organizations worldwide, as if the apparatus’ credibility was impermeable to scandals that, from critical angles, cast doubt on its efficacy. Relying on a cultural perspective of analysis highlighting the range of social processes that protect prevailing institutions’ legitimacy from aberrations, we examined the sense-making approaches employed by corporate boardroom actors to maintain their confidence in the credibility of the risk management apparatus despite being exposed to a continuous flow of corporate failures pointing to risk management efficacy limitations. Specifically, we conducted 35 interviews with corporate board stakeholders, mostly board members and corporate consultants. Our analysis indicates that actors involved in risk management processes tend to interpret aberration cases through perspectives that put the blame on some implementation deficiency, thereby ensuring that risk management's core assumptions are not questioned. These perspectives point to a defensive system of thought grounded in the director and consultancy communities, whose main referents are subject to intense work and re-conceptualization in the aftermath of aberrations, thereby providing community members with the means to make sense of the frictions of organizational life in ways that maintain the legitimacy of the risk management apparatus.     

Global,national and local practices in multinational corporations: towards a sociopolitical framework

This paper intends to shed some light on strategies and power resources of subsidiary managers and employee representatives involved in ‘charter changes’ and the implementation of ‘best practices’ developed elsewhere. Research shows that local managers face a dilemma in that they need both internal legitimacy (within the MNC itself) and external legitimacy (within the local context). It is argued that the power resources key actors draw on in the (internal) decision-making processes of ‘charter changes’ are intertwined with certain (external) national business system (NBS) characteristics, an aspect often neglected in North American research about MNCs. The authors identify three key influences, which restrain or empower local management and employees in their ability to make strategic choices and gain power within the MNC. They are (1) the overall strategic approach of the multinational group, (2) the strategic position and the economic performance of the subsidiary itself and (3) the degree of institutional embeddedness of the subsidiary in the host country. Comparative mini-case studies are used to illustrate the effect of local management and employee representatives' empowerment on their ability to retain skills and work practices supportive of a diversified quality production process in the face of MNC pressure to adopt global ‘best practices’ based on more standardized production processes.     

The dynamic nature of HRM implementation: a structuration perspective

Abstract

Over the past decades, scholars have dedicated substantial attention to the process of HRM implementation. Most progress has been made with debates on HRM system strength, roles of organisational actors in HRM implementation, and intended, actual and perceived HRM. In this paper, we challenge the current view on HRM implementation as being too static and one-directional. By building on structuration theory, we show that the process of HRM implementation is less straightforward than has been previously assumed. After their initial introduction, HRM practices evolve through turbulent developments. Furthermore, instead of neatly distributed roles following meticulously scheduled planning, HRM practices are influenced by various organisational actors. For successful implementation, HRM practices need to become inscribed into the interpretive schemes of organisational actors, resources have to be distributed, the HRM practice has to gain legitimacy. We develop a comprehensive framework that assists in understanding the process of HRM implementation.     

Legitimating change in the public sector: the introduction of (rational?) accounting practices in the United Kingdom,Italy and Austria

This paper explores the deployment of rhetorical legitimation strategies during public-sector accounting reforms by investigating how organizational actors justify related changes in the central governments of the United Kingdom (UK), Italy and Austria. The study shows that changes are largely legitimated (and rarely delegitimated) by key actors, with authorization strategies dominating. Country differences and actors’ professional backgrounds also impact upon the use of legitimation strategies, with those from an accounting background and working in the UK being more likely to justify change in terms of rationalization and normalization. Italian and Austrian actors more frequently resort to authorization strategies to explain accounting change.     

From Taken‐for‐Granted to Explicit Commitment: The Rise of CSR in a Corporatist Country

This article contributes to a thriving line of research that examines issue interpretation and social accounts in order to study the adoption and diffusion of organizational concepts and management practices. It employs the empirical example of the rise of corporate social responsibility (CSR) in Austria between 1990 and 2005 to investigate the complex role institutional pressures and social positions of actors play in the local adoption of globally theorized ideas. More specifically, the study reveals distinct patterns in rhetorical CSR adoption that illustrate the initial hesitation and reluctance of an established elite in the Austrian business community towards the Anglo‐American notion of ‘explicit’ CSR, while non‐elite actors who were less favourably positioned in the social order readily embraced the concept. It is in such a sense that CSR is nevertheless instrumentalized to challenge, reinterpret, or explicitly evoke the autochthonous idea of institutionalized social solidarity. Conceptually, this research takes into account social structure, actors' positions in the social order, and resulting divergent adoption motivations – i.e. the individual, yet socially derived, relevance systems of actors – and relates these to mechanisms and processes of institutional change.     

Juggling Legitimacies: Informal Places for Burials and Worship in Hong Kong

The Hong Kong government's neoliberal approach regarding land development and urbanization affects not only the housing market but also burial places, increasing inequality for both the living and the dead. The urgency of tackling the issue of places for burial is all the more pressing given current demographic changes and an existing backlog of public burial places in inner‐city locations. Against this backdrop, this paper focuses on the cultural practices around burial and worship among the inhabitants of Hong Kong, and on their struggle to maintain these practices. It illustrates various forms and means of legitimacy (e.g. pragmatic, normative and cognitive) being applied by all actors, and shows how the continuing practices around worship and burial lead to the production of informality. The main argument is that socially constructed legitimacy can be gained and lost by various actors in a dynamic negotiation process based on belief systems, rules and norms (following Suchman, 1995). Thus, it should be understood as a strategic mode both within and outside the state. This perspective of legitimacy provides a better understanding of how and by what means resources and power are being negotiated in order to draw lessons from informal dynamics.     

Logics' shift and depletion of innovation: A multi-level study of agile use in a multinational telco company

The use of Agile practices is typically associated to a wide array of benefits for organizations. This paper extends growing research on the ‘dark’ side of Agile by investigating the depletion of innovation in a large telco company following the large-scale implementation of Agile in R&D units. Our qualitative study reveals a shift in the organizational logics underpinning new product development, from a “navigating through unchartered waters” to a “putting out fires” logic. We tracked the change in key components of logics (goals of teams, source of legitimacy of team members and support and control systems) and explained the multi-level mechanisms through which the shift occurred, i.e., changes in processes of workflow management, work allocation, and performance management. We found that the new organizational logic negatively impacted individual attitudes towards the generation of new ideas by promoting the internalization of short-termism, a perceived drain in competences and confidence, and the lack of accountability for innovation. By focusing on changes in organizational logics, our insights expand current knowledge about the relationship between Agile implementation and individual attitudes. We also explain why unexpected effects of Agile implementation may go undetected in organizations, because they derive from multi-level, diffused, changes in the organization.     

Technology and The Courtroom: An Inquiry into Knowledge Making in Organizations

Recent theories of knowledge management have offered a functionalist understanding of knowledge creating dynamics in organizations. Their focus is on the role of knowledge assets as a determinant of competitive performance. However, the presupposition that knowledge can be managed or treated as an objective commodity seems to overlook the highly interactive, provisional and controversial nature of knowledge‐oriented phenomena in organizations. By deviating from the mainstream, we conduct a phenomenological inquiry into knowledge making within the setting of courtroom trials. Evidence is provided by in‐depth case studies carried out in six Italian courtrooms adopting videocassette recording (VCR) technology as a tool for recording and storing the proceedings of criminal trials. The behavioural responses of courtroom actors confronted by the intrusion of an alien technology in a highly institutionalized and resilient setting are particularly relevant for the study of knowledge in organizations. They reveal the highly controversial, pasted up and medium‐specific features of organizational and professional knowledge systems. Rather than being the product of smooth conversion processes, knowledge in organizations is the outcome of inquiry, controversy and bricolage, resilient as a whole, but subject to local disputes, experiments and reassembling. Based on the findings of the cases, our account points towards a view of organizational knowledge as a dynamic, heterogeneous ‘assemblage’ characterized by ongoing transformations and reconfigurations.     

The liability of mimicry: Implementing “global human resource management standards” in United States and Indian subsidiaries of a South Korean multinational enterprise

There is increasing evidence that multinational enterprises (MNEs) from less dominant economies tend to mimic and disseminate human resource management (HRM) practices sourced from a dominant economy, usually the United States, to overcome their “liabilities of origin.” However, our understanding of the specific challenges involved in the implementation of such practices by firms across different national and subsidiary contexts remains limited. Drawing on evidence from a case study of a South Korean MNE, we examine the extent to which, and ways in which, global HRM policies mimicking U.S. practices are implemented across its sales, manufacturing, and research and development subsidiaries in the United States and India. We find discernible differences in the implementation of the global policies both between the two host country sites and across the three function-specific subsidiaries in each country, identifying a range of national and subsidiary-specific factors that inform these variable implementation outcomes. In addition to legitimacy challenges related to the source, appropriateness, and process of transfer, we note a unique form of legitimacy challenge—“the liability of mimicry”—whereby local actors can challenge head office policies on the basis of a claim to superior expertise in the dominant practices, as a particular concern of MNEs from emerging economies.     

Positioning,similarity and difference: Narratives of individual and organizational identities in an Australian university

This study looks at a large Australian university at a time of reform in the higher education sector to examine how the identities of individuals working within the university, as well as the university itself, were constructed. By examining the narratives that organizational members told, the study shows how academics, senior executives and general staff members constructed identities through different patterns in the interplay of similarity and difference among actors, doings and perceptions, as a result of which positions were ascribed to and taken up by individual and collective actors.     

Managing Legitimacy in Business-Driven Social Change: The Role of Relational Work

This paper examines how companies manage their legitimacy in driving social change, drawing attention to how companies proactively negotiate their involvement with nonmarket actors. Building on the legitimacy-as-process perspective, I argue that companies construct the legitimacy of their involvement by engaging in relational work, that is, by investing efforts in shaping their relations with others and thereby redefining roles and responsibilities. To explore the role of relational work in business-driven social change, I present an inductive, interpretive study of a pharmaceutical company’s efforts to build a market for its products by improving diabetes care in Indonesia. Grounded in the empirical study, I develop a process model to explain how legitimacy is redefined from the bottom-up, that is, how a company’s involvement is re-negotiated in situ and crafted to attain the social approval of a wider audience. Advancing the micro-foundations of nonmarket strategy, the model offers new insights into how companies can organize with nonmarket actors and how they can effectively publicize their involvement as socially responsible. I also discuss the model’s implications for a more critical research agenda on the political responsibilities of companies in social change.     

Intra-organizational legitimization strategies used by purchasing managers

This paper addresses the issue of how purchasing managers can develop the purchasing department's legitimacy within an organization. A qualitative exploratory approach based on six cases has been used since: (1) there has not yet been a research performed on this topic; and (2) an analysis of internal legitimization strategies must take into consideration the context and the nature of the relationships among departments. Our analysis shows that in order to create, maintain or increase the purchasing department's internal legitimacy, purchasing managers have to do very well about two complementary strategic orientations: (1) identify and attract the best suppliers; (2) identify and implement collaborative processes and coordination mechanisms that cannot be duplicated by competitors. In fact, supply managers actually develop legitimization strategies based internally and externally, since a higher level of internal legitimacy can also be supported partially by external stakeholders, who then influence the other departments' and top management's perceptions.Our study also shows that the strategies used by purchasing managers take different forms depending which legitimacy dimension (cognitive, pragmatic, or moral legitimacy) they are trying to influence. Moreover, a purchasing department's legitimacy strategy is developed based on a few important factors: (1) where the purchasing department stands at a given time in terms of the contribution perceived, similar to a "balance sheet" evaluation; (2) the purchasing personnel's technical and relational competencies; and (3) the extent of their implication in the strategic choices leading to the development of a competitive advantage for the organization they work for. It seems that any effort to take steps based on coherent legitimization strategies could help improve both a purchasing department's legitimacy level and its development level. From this standpoint, this study also shows that the purchasing department's internal legitimacy is a crucial driver of purchasing practices.     

The moderating effect of organizational change cynicism on middle manager strategy commitment

This paper focuses on middle managers as key actors in organizational strategizing. Through an empirical study we explore some of the barriers to effective implementation of strategic change initiatives. This research is motivated by the recognition that to understand strategizing in organizations we need to appreciate both when it is successful and when it is not, but that we still know little about the latter. To develop better insights into what lies behind the actions of strategists and to present implications for HR managers concerned about increasing the chance of successful change and reducing the prevalence of organizational change cynicism (OCC), we first explore antecedents to middle managers' strategy commitment. We examine perceptions of the workplace context, including procedural justice and senior management support for the strategy and middle managers' levels of strategy relevant knowledge, incorporating participation in decision-making and information available for implementation. We then investigate the moderated effect of OCC on middle managers' strategy commitment. Our study suggests that failure of a new strategy or strategic direction is due to the inability or resistance of individual employees to commit to a strategy and adopt the necessary behaviours to accomplish an organization's strategic objective.     

A TYPOLOGY OF ORGANIZATIONAL LEARNING SYSTEMS

This paper synthesizes research on the organizational learning phenomenon. The concept of organizational learning systems is proposed and developed. Learning systems are the mechanisms by which learning is perpetuated and institutionalized in organizations. Findings from an exploratory study of organizational learning are used as a basis for developing a typology of organizational learning systems.     

The Development of Corporate Identity: A Political Perspective

abstract    A corporate identity denotes a set of attributes that senior managers ascribe to their organization. It is therefore an organizational identity articulated by a powerful interest group. It can constitute a claim which serves inter alia to justify the authority vested in top managers and to further their interests. The academic literature on organizational identity, and on corporate identity in particular, pays little attention to these political considerations. It focuses in an apolitical manner on shared meanings when corporate identity works, or on cognitive dissonance when it breaks down. In response to this analytical void, we develop a political analysis of corporate identity and its development, using as illustration a longitudinal study of successive changes in the corporate identity of a Brazilian telecommunications company. This suggests a cyclical model in which corporate identity definition and redefinition involve power relations, resource mobilization and struggles for legitimacy.     

Management consultants as improvising agents of stability

Relatively few studies have paid theoretical as well as empirical attention to what use organizations have of management consultants and their services. By studying how buyers and sellers of management consulting services describe what management consulting is and represents, this study questions common understandings in the literature, i.e., that management consultants act as agents of change or as standardizers of organizational practice around the world. It is argued that consultants can be understood as playing the role of improvisers because there is considerable uncertainty among both buyers and sellers as to what use organizations really have of them. Playing a recognizable, yet indefinite role based on an institutionalized foundation, in both discourse and practice, of what actors such as consultants are supposed to do in certain situations, helps client organizations to reduce the uncertainty experienced. The conclusion is that management consultants can therefore be understood as agents of stability rather than agents of change.     

‘RESILIENCE’ IN ORGANIZATIONAL ACTORS AND REARTICULATING ‘VOICE’: Towards a humanistic critique of New Public Management

Assumptions of resilience are frequently made about organizational actors, both by scholars and practitioners. It is argued that resilience is unlikely to be the usual outcome from the trauma routinely confronted in organizational life. It is suggested that ‘assumptions’ of resilience stem from either a reification of what is perceived to be a highly desirable trait in organizational actors or a lack of acknowledgement of what, if recognized, would be regarded as an ‘unthinkable’ aspect of organizational life. Managers are unlikely to recognize and admit that the pain they inflict on others in the name of efficiency, organizational down-sizing and out-sourcing will contribute to long-term changes in organizational actors. It is also likely that, while coping skills and resources may be sufficient to equip individuals for the myriad problems they routinely face, even the ‘successful’ actor may not remain unscathed. Some of the negative organizational outcomes of this unthinking ‘assumption’ of resilience are canvassed and suggestions are made as to what strategies may ameliorate the situation. A rearticulation of actors' ‘voice’ in formal organization, at a time of a hegemonic dominance of economic rationalism, is especially overdue.     

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.     

Sustainable entrepreneurship and legitimacy building in protected areas: Overcoming distinctive barriers through activism

Sustainable entrepreneurs operating in protected areas face distinctive barriers that place additional emphasis on the need to build legitimacy. To date, how they do this has not been entirely explored. This paper addresses this need through an exploratory study of sustainable entrepreneurs in a transnational protected area. The results indicate that sustainable entrepreneurs in protected areas face barriers that can be broadly classified as cognition spanning, locale and sector-related barriers. The findings highlight that a key way sustainable entrepreneurs overcome these distinctive barriers is by building legitimacy through activism. Activism became instrumental in building legitimacy with varied stakeholders and actors. This is all geared towards overcoming barriers during the sustainable entrepreneurship process. The findings add to existing literature on the role of legitimacy building in sustainable entrepreneurship by detailing the different forms of legitimacy and how they are built through activism. The paper concludes with propositions about the conditions necessary for sustainable entrepreneurs to build legitimacy in fragile socioecological contexts through activism.     

Stories from the Front‐line: How they Construct the Organization*

abstract Drawing on social constructionist theory this paper applies discourse analysis to ten narratives told by service delivery staff in one distribution network. The analysis looks at how the narratives construct the organization through their constructions of self (the narrator), customer and manufacturer and their constructions of the relationships linking these three sets of actors. The paper argues that the narrators construct the self either as an organizational customer or an organizational partner. The two constructions locate conflict either within the organization or at the customer–organizational boundary respectively. The implications of this are suggested. Contrasts between the manner in which organizational members construct the self as customer or partner and the construction of the organizational member in the internal customer literature are highlighted and briefly discussed.