SWG 02: Multinational Corporations: Social Agency and Institutional Change

 

Coordinators:

Florian Becker-Ritterspach, University of Applied Science Berlin (HTW), Germany becker.ritterspach@HTW-Berlin.de

Mike Geppert, Friedrich Schiller University Jena, Germany mike.geppert@uni-jena.de

Susanne Blazejewski, Alanus University, Germany Susanne.Blazejewski@alanus.edu

 

Multinational corporations (MNCs) are seen as 'prime movers behind globalization' and 'highly mobile actors' which challenge the traditional role of the nation state and its institutions (Eden & Lenway, 2001). Even when nation states and their business systems are still seen as influential, both at the home and host country level, MNCs are also discussed as actors that actively shape transnational institution-building, and are not just being shaped by it (e.g. Geppert & Williams, 2006). An important question, therefore, is how MNCs as collective actors actively influence institutional change processes at the local, national and international levels, and how much they are driven by these developments.

The SWG focuses on how MNCs shape and are shaped by complex and multiple institutional environments. We are especially interested in the role of social agency in institutional change processes, referring both to the MNC as a collective agent and to individual key actors within the MNC as powerful agents to effect institutional change. We believe that these social agents are not just formal rule-makers and rule-takers, but that they also informally shape the MNC's strategic approaches and organizational structures. An important focus is on comparing the different ways that social agency emerges in MNCs operating in different societal and industrial sector contexts. We are especially interested in promoting and manifesting research and conceptual debates in this field, including how established ideas in IB (International Business) and institutionalist research can be enriched and developed further by new ideas from other related disciplines such as organizational sociology, economic sociology, economic history, political science as well as scholars from the fields of international management.

 

The role and function of organizations in society is traditionally a central concern of institutionalist studies yet the study of MNCs as organizations has only been a side issue in institutionalist studies. However, for some time now both camps in institutional research – neo-institutionalists and comparative institutionalists – have come to see the MNC as a unique unit of analysis (Kostova & Roth, 2002; Morgan, 2001a). Their reasoning is based on a number of arguments which we take as points of departure for the discussions in our SWG. In particular, neo-institutionalists (see e.g. Kostova et al., 2008) recently argue that

 

  • traditional beliefs that organizations function in organizational fields do not apply to the MNC, and suggest studying MNCs as a meta-institutional field that is more ambiguous and fragmented than assumed by mainstream scholars. They stress the need to examine more closely the role of social agency;
  • institutional isomorphism is of limited relevance in the case of MNCs because they face multiple institutional pressures and are more complex than typically assumed, leaving room for strategic choices of actors;
  • because of these limitations, actors' attempts to seek legitimacy from external stakeholders involve power struggles and active political processes, including manipulation and negotiation.

 

Similarly, comparative institutional scholars (see e.g. Crouch & Streeck, 1997; Ferner et al., 2006; Sorge, 2005; Whitley, 1999) recently question the distinct influence of national institutions and stress that

 

  • national business systems are less consistent and complementary than often assumed. Societal institutions are seen as ambiguous, meaning that nation states might have contradictory and multiple institutional logics allowing for more heterogeneous forms of organizing and social agency in MNCs than often assumed (Allen, 2004; Campbell, 2010; Jackson, 2010).
  • MNCs both respond to institutional pressures (home and host countries) and actively challenge societal institutions by introducing new social practices and innovative ideas (see e.g. Ferner et al., 2006).
  • institutional change is both (i) a creative process, referring to the recombination of old and new social practices (bricolage) and the need for local translation of ideas developed elsewhere, which leaves room for social agency (see e.g. Campbell, 2010), and (ii) a socio-political process, referring to differences in power relations and political interests among key power holders (see e.g. Geppert & Dörrenbächer, 2011).

 

On this basis we argue that MNCs should not be studied as unitary organizations, but should rather be seen as 'transnational social spaces' (e.g. Morgan, 2001b) and 'contested terrains' (see Edwards & Belanger, 2009), bringing social agency back in as both driver and outcome of institutional and intra-organizational change processes. Both collective and individual actors have a degree of autonomy and choice. This points, on the one hand, to the ability of social agents to reinterpret and redefine their existing institutions (Hall & Thelen, 2009).

It involves, on the other hand, perspectives that see institutional change as a process of conflicts and power struggles. The latter sensitises us for the socio-political nature of institutional change and brings the micro- and macro-political dimensions of social agency into the analysis of MNCs (see also Geppert & Dörrenbächer, 2011; Morgan, 2011).

 

Keeping with the EGOS tradition, the SWG encourages multilevel and multidirectional analysis, including micro-level agency of actors and firms, meso- and macro-level influences and changes of sector, local, national and transnational institutions. Our SWG explicitly encourages contributions from diverse theoretical traditions and disciplines that open new organizational perspectives in IB. These could include, for example, organizational sociology, economic sociology, economic history, political science as well as scholars from the fields of international management. At the same time, such a disciplinary diversity enhances our understanding of the methodological repertoire available for organization scholars within the context of IB.

References

  • Allen, M. (2004): "The varieties of capitalism paradigm: not enough variety?", Socio-Economic Review, 2 (1), 87–108 
  • Campbell, J.L. (2010): "Institutional reproduction and change", in: G. Morgan, Campbell, C. Crouch, O.K. Pedersen & R. Whitely (eds.): The Oxford Handbook of Comparative Institutional Analysis. Oxford: Oxford University Press, 87–116
  • Crouch, C. & W. Streeck (eds.) (1997): Political Economy of Modern Capitalism. Mapping Convergence & Diversity. London: Sage
  • Eden, L. & S. Lenway (2001): "Introduction to the Symposium Multinationals: The Janus Face of Globalization", Journal of International Business Studies, 32 (3), 383–400
  • Edwards, P.K. & and J. Belanger (2009): "The MNC as a Contested Terrain”, in: S. Collinson & G. Morgan (eds.): Images of the Multinational Firm. Oxford: Wiley, 193–216
  • Ferner, A., J. Quintanilla & C. Sánchez-Runde (2006). "Introduction: Multinationals and the multi-level politics of cross-national diffusion", in: A. Ferner, J. Quintanilla & C. Sánchez-Runde (eds.): Multinationals, Institutions and the Construction of Transnational Practices: Convergence and Diversity in the Global Economy. Basingstoke: Palgrave, 1–23
  • Geppert, M. & C. Dörrenbächer (2011). "Politics and power in the multinational corporation: introduction", in: C. Dörrenbächer & M. Geppert (eds.): Politics and Power in the Multinational Corporation: The Role of Institutions, Interests and Identities. Cambridge: Cambridge University Press
  • Geppert, M. & K. Williams (2006). "Global, national and local practices in multinational corporations: towards a sociopolitical framework", The International Journal of Human Resource Management, 17 (1), 49–69
  • Hall, P.A. & C. Thelen (2009): "Institutional change in varieties of capitalism", Socio-Economic Review, 7 (1), 7–34
  • Jackson, G. (2010): "Actors and institutions", in: G. Morgan, Campbell, C. Crouch, O.K. Pedersen & R. Whitely (eds.): The Oxford Handbook of Comparative Institutional Analysis. Oxford: Oxford University Press, 63–86
  • Kostova, T. & K. Roth (2002): "Adoption of an organizational practice by subsidiaries of multinational corporations: institutional and relational effects", Academy of Management Journal, 45 (1), 215–233
  • Kostova, T., K. Roth & M.T. Dacin (2008): "Institutional theory in the study of multinational corporations: A critique and new directions", Academy of Management Review, 33 (4): 994–1006
  • Morgan, G. (2001a): "The multinational firm: Organizing across institutional and national divides", in: G. Morgan, P.H. Kristensen & R. Whitley (eds.): The Multinational Firm: Organizing across Institutional and National Divides. Oxford: Oxford University Press, 1–24
  • Morgan, G. (2001b): "Transnational communities and business systems", Global Networks, 1 (2), 113–130
  • Morgan, G. 2011. "Reflections on the macro-politics of micro-politics", in: C. Dörrenbächer & M. Geppert (eds.): Politics and Power in the Multinational Corporation: The Role of Institutions, Interests and Identities. Cambridge: Cambridge University Press (forthcoming)
  • Sorge, A. (2005): The Global and the Local: Understanding the Dialectics of Business Systems. Oxford: Oxford University Press
  • Whitley, R. (1999): Divergent Capitalisms: The Social Structuring and Change of Business Systems. Oxford: Oxford University Press

Coordinators

Florian Becker-Ritterspach is Professor at the University of Applied Sciences Berlin ["Hochschule für Technik und Wirtschaft Berlin – HTW"], Germany. Next to knowledge transfer and learning, his research has focused on issues of power, politics, conflict and intra-firm competition in multinationals. His main theoretical interests centers on combining international business & management approaches with and comparative organizational & institutional theory.

Mike Geppert is Professor of Strategic and International Management at Friedrich Schiller University, Jena, Germany. His research interests are in comparative organization studies, especially in organizational and institutional change and in socio-political issues in multinational corporations.

Susanne Blazejewski is Professor for Management and Organization at Alanus University, Germany. Her research focuses on issues of politics and conflict in multinational organizations, the transfer of organizational practices across institutional and cultural contexts, organizational change, and qualitative methods in international business research. Her publications include articles in the Journal of World Business, Competition and Change, books on organizational change in CEE, organizational cultures in multinationals, and institutional change in Japan as well as numerous book chapters.