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.     

Between advocacy,compliance and commitment: A multilevel analysis of institutional logics in work environment management

In this study we explore the development and enactment of institutional logics in the field of work environment management. We show how three historically developed logics constitute different values and practices that guide professionals’ organizational action. Using both historical and contemporary qualitative data, we show how the three institutional logics are present in the field of work environment, and how the logics are enacted simultaneously by actors within four large organizations in Denmark. The study contributes to the literature on institutional logics. The logics perspective is combined with critical realism to describe the inter-relatedness between the levels of society, institutional fields, and organizations, and by elaborating the near-decomposable relations between institutional logics and orders. The study contributes to the literature on work environment management by investigating the ideational lenses through which regulations and interventions are perceived by organizational actors, and how these perceptions may lead to different organizational outcomes and outlooks in work environment management.     

Institutional distance and international networking

We focus on how small- and medium-sized enterprises (SMEs) adapt to differences in institutional logics (values, beliefs, and rules) in their networking when they enter an institutionally distant market. We address gaps in the literature, relating to the role of institutional logics in SME internationalization, and how institutional distance affects the formation of network ties. We show how the social interaction involved in internationalization is embedded in the institutional logics followed by partnering actors. Specifically, we demonstrate how institutional distance may constrain the networking activities of SMEs and identify practices that may support successful internationalization.     

Human resource management – a national business system perspective

Abstract

Although a sizeable body of academic literature has attempted to explain the role of national business systems in the context of human resource management (HRM), there is still little research on the extent to which institutional features explain patterns of HRM in the emerging economy of Dubai. Different institutional settings tend to generate their own organisational arrangements to manage their employees, and it is important to understand how this interplay works. From an economic perspective, Dubai is important, mainly due to its promising diversification of its economy and its political stability. From a national business system perspective, the institutional environment represents a peculiar case, because it differs from many other emerging markets with respect to the strong co-ordinating role of the state, the strong segmentation and specialisation of tasks, roles, skills and authority, especially between nationals and expatriates, and a unique employment system. Thirty-two in-depth interviews with HR managers, and extensive document reviews, reveal that these elements of the institutional environment are related strongly to specific patterns of HRM practices, including distinctive policies for national employees and expatriates. The insights generated in this study explain the particularities of HRM in Dubai from a national business system perspective.     

The implications of turning down an international assignment: a psychological contracts perspective

Previous research has generally focused on employees’ willingness to accept international assignments and the rewards that are often associated with them. Little is known, however, about the potential career consequences of declining an international assignment. In this conceptual paper, psychological contract (PC) theory is used to develop propositions outlining factors that are likely to determine whether employees who turn down an international assignment will be viewed as having failed to live up to their obligations, by both the organization and themselves. Our theoretical model suggests that when the PC is breached due to the refusal of an international assignment, it may lead to reduced investments in the employee and, in turn, lower levels of objective and subjective career success for those who have spurned the offer to work abroad. We also address how the consequences of declining international assignments will affect perceptions of choice and international assignment refusal rates within organizations. We close by discussing directions for future research that can further examine the ideas and propositions developed in this paper.     

Institutional theory and HRM: A new look

The context of HRM is important but undertheorized (Paauwe, 2009) and subsequently underresearched (Jackson, Schuler, & Jiang, 2014). We offer two recent perspectives of institutional theory—institutional logics and institutional work—as theoretical lenses through which scholars can explore the influence of institutional context on HRM and more intriguingly the influence of HRM professionals on their institutional contexts. Though others have introduced institutional theory to HRM scholarship (e.g. Paauwe & Boselie, 2003), we bring a conceptualization of institutional theory that reflects its advances over the last fifteen years, advances highly relevant to HRM scholars. While previous conceptualizations of institutional theory focus on the direct constraint of institutions on HRM, institutional logics emphasizes complexity, multilevel dynamics, and agency. Similarly, institutional work addresses agency at the day-to-day level, exploring how actors create, maintain, and disrupt the institutional contexts in which they are embedded. Directions for HRM research are discussed.     

A comparative study of human resource management practices in international joint ventures: the impact of national origin

This paper presents a comparative study of the effects of national origin, a company's strategic orientation and its investment profile on preference for the application of human resource management (HRM) practices as conducted in international joint ventures (IJVs). The approach extends understanding by offering a broader exploration of how national differences generate additional barriers that impact on specific HRM practices. The evidence from the study presented suggests that there is little support for national origin being a major independent influence. National distinctiveness does define the types of integration between parent companies and IJVs, but these collaborations do not necessarily reflect any specific national institutional bias. Examination of eighty-seven IJVs suggests that IJV management has a high degree of organizational autonomy in the implementation of a company's task-related inputs regardless of the national background of the foreign partner. The presence of a company's task-related effects on HRM practices plays a significant contextual role where the major attributes are the technology, management development and the compatible use of an IJV's resources. The results confirm that there is little evidence to suggest that partner-related influences derived from the partners' complementary resources and competences in the field of HRM development that are national origin specific have had significant influence over HRM development in the IJVs studied.     

THE EFFECT OF KNOWLEDGE ACCESSIBILITY ON INTERNATIONAL INCOME INEQUALITY

Using a structural model of new economic geography, we estimate the effect of accessibility to foreign knowledge on international income distribution. Whereas previous literature has mainly focused on the importance of geographical accessibility to foreign markets, this paper emphasizes the role of accessibility to foreign knowledge in determining international income inequality. Using cross-country data of income per worker, bilateral trade flows, and number of flight passengers, we find evidence that the accessibility to foreign knowledge raises per capita income significantly.     

Institutional distance,host country and international business experience,and the use of parent country nationals

This study examines how the institutional distance between a host country and a home country influences foreign subsidiary staffing, and how overseas business experience moderates the effect of institutional distance. Hypotheses regarding the effect of institutional distance on foreign subsidiary staffing are empirically tested using a sample of 2,980 foreign subsidiaries of Japanese firms. This study shows that although the ratio of parent country nationals to subsidiary employees decreases when firms face greater institutional distance, the absolute number of parent country nationals assigned to the subsidiary increases. This study also shows that firms with more overseas business experience replace host country nationals with parent country nationals when there is greater institutional distance.     

Visualizing institutional logics in sociomaterial practices

This paper aims to deepen our understanding of the mechanisms underlying the mutual constitution of competing institutional logics and sociomaterial entanglements by combining a sociomaterial lens with the institutional logics perspective. We present findings from an interpretive, longitudinal case study at the emergency general surgery ward of a Nordic university hospital. By focusing our analysis on how sociomaterial affordances emerge through the implementation, use and continued development of digital and physical visualization boards, we show how these artifacts constitute an integral part of the operational staff's sensemaking and enactment of a new institutional logic. We make two contributions. First, we show how the perceived affordances of a technology are created from the experience of using several different technologies and how the rejection of one technology can simultaneously constitute another. Second, we show how visualization artifacts, entangled in sociomaterial practices, can shape individual focus of attention and thus facilitate the integration of a new institutional logic in operational practice.     

The local in the global: regions,employment systems and multinationals

This article examines how the international competition to attract and retain foreign direct investment shapes the governance of business and employment systems. Through an examination of global production networks and the changing role of the state in economic governance, it highlights the sub‐national regional space as an important level of institutional adaptation. Specifically, it explores how regions organise themselves to compete for inward investment, and the potential role of industrial relations actors within this. It argues that both research into multinational companies, and of the governance of employment systems more generally, need to incorporate an analysis of regional competition for productive investment more fully into their analysis.     

我国农民工住房的制度化困境研究——基于多重制度逻辑的视角

改革开放以来,我国农民工的住房问题是一个历久弥新的话题。农民工的住房制度嵌入于多元化制度场域中,其背后隐含着国家逻辑、政府逻辑、市场逻辑和生存逻辑,并且这四种逻辑相互交织和互动,最终导致农民工面临着住房制度化困境。因此,需要加强住房制度的顶层设计,并构建新的制度逻辑,达成农民工住房的多重制度逻辑间的动态平衡。     

From National Service to Global Player: Transforming the Organizational Logic of a Public Broadcaster

We present organizational logics as a meso‐level construct that lies between institutional theory's field‐level logics and the sense‐making activities of individual agents in organizations. We argue that an institutional logic can be operationalized empirically using the concept of a discourse – that is, a coherent symbolic system articulating what constitutes legitimate, reasonable, and effective conduct in, around, and by organizations. An organization may, moreover, be simultaneously exposed to several institutional logics that make up its broader ideational environment. Taking these three observations together enables us to consider an organizational logic as a spatially and temporally localized configuration of diverse discourses. We go on to show how organizational logics were transformed in the Australian Broadcasting Corporation between 1953 and 1999 by examining the changing discourses that appeared in the Corporation's annual reports. We argue that these discourses were modified through three main forms of discursive agency: (1) undertaking acts of ironic accommodation between competing discourses; (2) building chains of equivalence between the potentially contradictory discourses; and (3) reconciling new and old discourses through pragmatic acts of ‘bricolage’. We found that, using these forms of discursive agency, a powerful coalition of actors was able to transform the dominant organizational logic of the ABC from one where the Corporation's initial mission was to serve national interests through public service to one that was ultimately focused on participating in a globalized media market. Finally, we note that discursive resources could be used as the basis for resistance by less powerful agents, although further research is necessary to determine exactly how more powerful and less powerful agents interact around the establishment of an organizational logic.     

Consistency Matters! How and When Does Corporate Social Responsibility Affect Employees’ Organizational Identification?

Despite the increasing attention to corporate social responsibility (CSR) in the management literature, little is known about the mechanisms and boundary conditions explaining employees’ responses to CSR. Drawing on social identity and cue consistency theory, we develop a mediated moderation model that explains how and under which conditions perceived CSR affects employees’ organizational identification. We test the model by carrying out a three‐wave longitudinal study on employees of an international utility company. The findings indicate that perceived CSR interacts with overall justice to predict organizational identification through the successive mediation of perceived external prestige and organizational pride. The study clarifies and advances some of the theoretical foundations surrounding the micro‐level approach of CSR and has key implications for management research and practice.     

Shareholders' environmental profile and its impact on firm's environmental proactivity: An institutional approach

Theorists and practitioners still argue about different shareholders' environmental preferences. Drawing on various processes of institutional theory such as deinstitutionalization and defensive institutionalism, we test the differences between foreign and national shareholders' influences on firms' environmental proactivity. Specifically, we focus on the country of origin of the dominant shareholders and the environmental culture of the countries of origin of the shareholders. Using unbalanced panel data from between 2006 and 2017, which includes 12,527 observations of 1532 different firms from 11 economic sectors and across 23 countries, our results show that foreign shareholders are more prone to modifying existing environmental practices, whereas national shareholders may accept them, despite being reluctant to implement such changes. We make a contribution by showing that the deinstitutionalization forces coming from foreign shareholders are stronger than the defensive institutionalism efforts of national shareholders. However, such forces are not always the best options for sustainability.     

Institutional logics and innovation in times of crisis: Telemedicine as digital ‘PPE’

How do crises shape digital innovation? In this paper we examine the rapid adoption of digital telemedicine technologies in an Israeli hospital with a focus on the role of the institutional logics held by the stakeholders responding to emerging events. With the onset of COVID-19, the need for social distancing and minimal physical contact challenged and interrupted hospital practices. In response, remote audio-visual functionality of digital technologies were appropriated in different ways, as stakeholders – state actors, managers, health professionals, and family members – sought to improvise and enhance the protection of persons concerned. We show how emerging practices were guided by the dominant institutional logics of stakeholders responding to the crisis. Acting for many as a digital form of ‘personal protective equipment’ (PPE), the technologies enabled diverse action possibilities to become manifest in practices. We add to understanding the role of institutional logics in directing the attention of stakeholders to shape digital innovation in times of crisis.     

International Convergence of Accounting Practices: Choosing between IAS and US GAAP

This study examines reporting practices of a sample of foreign listed and domestic‐only listed companies from the United Kingdom, France, Germany, Japan and Australia to determine the extent to which companies voluntarily use “international” standards. Two types of use of non‐national standards in the consolidated accounts presented to the public are considered: adoption of “international” standards instead of national standards, and supplementary use where “international” standards are used in conjunction with national standards. “International” standards are defined as US GAAP or IAS (now IFRS). The study tests for a preference for either set of standards and considers the relationship of choice of regime with firm attributes. The results show significant voluntary use of “international” standards in all five countries and among foreign listed and domestic‐only listed companies. Companies using “international” standards are likely to be larger, have more foreign revenue and to be listed on one or more foreign stock exchanges. US GAAP is the predominant choice, but IAS are used by many firms in Germany and some in Japan. Firms listed in the United States' regulated markets (NYSE and NASDAQ) are more likely to choose US GAAP, but companies traded in the OTC market often select IAS. The study demonstrates for managers and regulators that there is considerable support for “international” standards, and that choice of IAS or US GAAP relates to specific firm characteristics which differ according to a firm's country of origin. Most use of “international” standards reflects individual countries' institutional frameworks, confirming the key role of national regulators and standard setters in assisting companies to achieve more comparable international reporting.     

Cultural values and definitions of career success

This paper examines how national culture relates to the ways that individuals define career success. Data are drawn from interviews with 269 professional services employees in 15 countries. Interviews are content coded and linked with country‐level Global Leadership and Organizational Behavior Effectiveness measures of cultural values. We test our hypotheses using a multilevel multinomial logit model. The results demonstrate that the ways in which employees define career success vary across countries, due in part to differences in cultural values after controlling for gender, occupation, job level, and national economic development. We find that employees from countries high in future orientation, uncertainty avoidance, and performance orientation are more likely to define career success in terms of interpersonal outcomes, and those from countries high in collectivism (institutional and in‐group), humane orientation, and gender egalitarianism are more likely to prefer intrapersonal outcomes. We find that employees from countries that are high in assertiveness, uncertainty avoidance, and performance orientation are more likely to define career success in terms of achievement‐oriented outcomes. Finally, we find that employees from countries high in power distance report career success definitions in terms of safety and security outcomes. We discuss the implications of these findings for theories of cultural differences in careers across countries.     

Sub‐National Institutional Contingencies,Network Positions,and IJV Partner Selection

The differences in sub‐national institutions within large and complex emerging economies have been increasingly noted. Drawing on social network theory and the institution‐based view, we argue that two network structural attributes of domestic firms – centrality and structural holes – have distinctive values in different sub‐national regions where institutional contexts differ widely. In addition, these sub‐national institutional contingencies influence the attractiveness of different network attributes to foreign entrants seeking international joint venture (IJV) partners. Specifically, in regions where the degree of marketization is high, centrally positioned domestic firms are more likely to be selected by foreign entrants as IJV partners. In regions where the degree of marketization is low, domestic broker firms are more attractive IJV partners. Results from the electrical and information technology industries in 18 provinces in China largely support our hypotheses.     

Structure of the labour market and wage inequality: evidence from European countries

The aim of this paper is to explore how the structural changes that have occurred in the labour market, in terms of employment composition by skill levels, affect wage inequality in three developed countries of Western Europe that are in close geographical proximity but have disparities in their labour market characteristics. More precisely, the analysis compares, from an international perspective, France, Germany—whose labour markets have been characterised in recent years by job polarization and the upgrading of occupations, respectively—and Italy, where neither of the two phenomena can be clearly identified. Using EU-SILC (European Union—Survey on Income and Living Conditions) data, in the first step, RIF-regression (Recentered Influence Function) enables an exploration on the primary factors that are likely to explain the differences in generating personal labour earnings and, in the second step, a decomposition of the change in wage inequality between 2005 and 2013 to evaluate how much of the overall gap is accounted for by the endowments in employees’ individual characteristics (composition effect) rather than the capability of labour markets to transform these characteristics into job opportunities and earnings (wage structure). Regarding France and Germany, the main results highlight how the endowment effect plays a key role in decreasing or, at least, not increasing wage inequality, whereas in Italy the rising inequality may be due to the lower efficiency of the country’s labour market in creating job opportunities, better job-related careers, and higher-salaries for employees.