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Practice Implementation Within a Multidivisional Firm: The Role of Institutional Pressures and Value Consistency
Abstract
This paper proposes a model to predict when the subunits of a multidivisional firm implement a practice adopted by the firm more or less extensively, focusing on the intraorganizational environment. Drawing on institutional arguments, I propose that a subunit’s extent of practice implementation is a combined result of coercive pressures from its headquarters, imitation of its peer units, and its own perception of the practice’s legitimacy. More specifically, I argue that a subunit will implement new practices related to corporate social responsibility (CSR) more fully (1) when the corporate mandate from the headquarters is more pressing, (2) when its peer subunits have implemented similar actions, and (3) when the practice is perceived as consistent with the subunit’s own values. Regression results further suggest that peers and headquarters influence a subunit’s extent of implementation of a practice only when the subunit perceives it as highly consistent with its own values—a finding that points to the importance of values for practice legitimacy and the need to rethink practice implementation within complex organizations.
... Most relevant to our theorizing, the multi-level theory of legitimacy recognizes that legitimacy is comprised of three distinct components that operate at different levels of analysis, that is, propriety, validity and consensus. While scholars have examined the impact of validity on propriety in laboratory (Johnson et al., 2016;Yoon and Thye, 2011) and field settings (Haack and Sieweke, 2018) and explored the interplay of propriety and validity in social media (van den Broek et al., 2023), institutionalization (Arshed et al., 2019) and practice implementation (Jacqueminet, 2020;Jacqueminet and Durand, 2020), we know little about the role of consensus in the relationship between validity and the formation of propriety. We suggest, and elaborate in further detail below, that the previous study of consensus and its role in the legitimation process has been hampered by conceptual and methodological ambiguities and would benefit from bringing together the multi-level perspective on legitimacy (Bitektine and Haack, 2015;Haack et al., 2021) with the micro-level model of legitimacy judgment formation (Tost, 2011). ...
... Furthermore, Jacqueminet and Durand (2020) use the extent to which similar practices are implemented by peer companies in a given country and industry as proxies for endorsement. They find that endorsement of a practice influences practice implementation more strongly than authorization, that is, the frequency with which the practice is mentioned by the parent company, provided that the endorsement is consistent with the evaluator's propriety belief (Jacqueminet, 2020). In addition, experimental research suggests that the number of social media followers and positive comments from social media users is an important source of validity that positively influences perceived legitimacy and purchase intention of controversial products (Lee et al., 2018). ...
... The coalescence of validity is facilitated through prevalent practices and discourses, which offer important cues about appropriate behaviour (Gray et al., 2015). Coalescence is also bolstered by the judgment of others, especially the judgments of authorities and peers (Dornbusch and Scott, 1975;Jacqueminet, 2020;Johnson et al., 2006). In addition, approval by 'judgment validation institutions' such as the media, government and the judicial system (Bitektine and Haack, 2015, p. 51) constitute major sources of validity (van den Broek et al., 2023;Zhang et al., 2022). ...
Previous work on legitimacy has conceptualized its multi‐level nature, encompassing individual‐level propriety and collective‐level validity. Recently, scholars have introduced the construct of consensus, the degree to which evaluators agree in terms of their propriety beliefs. While validity and consensus can overlap, they can also manifest distinctly, with validity masking underlying disagreement (i.e., low consensus). Furthermore, some work has begun to theorize the effects of this validity‐consensus incongruity from a multi‐level perspective, but it has yet to systematically integrate micro‐oriented theory to explain how evaluators assess legitimacy. We address this limitation by examining the individual‐level consequences of the validity‐consensus incongruity following a negative shock. Specifically, using a multi‐level regression discontinuity design and data from 6260 evaluators across 17 countries, we examine changes in evaluators' propriety beliefs about the legitimacy of free markets following the 2008 global financial crisis. In contrast to prior research, we theorize that high validity amplifies a shock's negative impact on evaluators' propriety beliefs. In addition, we establish how consensus explains variation in evaluators' responses to a shock, particularly in high‐validity, low‐consensus contexts. By bringing together two important strands of the legitimacy literature, we extend prior theory and pioneer an empirical test of the nuanced nature of legitimacy.
... Keywords corporate social responsibility (CSR), CSR departments, functional departments, implementation, qualitative research While external demands made by stakeholders are critical drivers of corporate social responsibility (CSR) implementation in companies (Delmas & Toffel, 2008), a profound understanding of CSR implementation requires intraorganizational analysis (Jacqueminet, 2020;Osagie et al., 2019). To emphasize the intraorganizational dimension, we define CSR implementation as the integration of social, environmental, and ethical issues into companies' "strategies, structures and procedures [. . ...
... Prior research has shown that given that CSR affects core business operations, the involvement of functional departments is critical for its implementation (Delmas & Toffel, 2008). Functional departments influence overall internal decision-making about CSR implementation (Crilly et al., 2012) and can independently implement CSR in their respective practices and procedures (Jacqueminet, 2020). ...
... Our model also shows how the implementation is distributed within companies and thus expands earlier work that has attributed a pivotal role to companies' departments rather than organizations more generally as the focal unit of analysis regarding whether and to what extent a company implements CSR (Chandler, 2014;Delmas & Toffel, 2008;Jacqueminet, 2020). While CSR departments have a central role at the nascent stage and are responsible for both enactment and coordination, functional departments take over the enactment once an intermediate or mature stage has been reached, while CSR departments focus on coordination. ...
Research on the implementation of corporate social responsibility (CSR) has revealed the critical role of CSR departments vis-à-vis functional departments. While both CSR and functional departments influence CSR implementation, the question of how they work together remains underexamined. We address this question by mobilizing and merging two complementary yet separate perspectives on CSR implementation: “coordination” and “enactment.” Building on a comparative case study involving seven large Swiss financial institutions that have established CSR departments and implemented CSR to varying extents, we inductively derive six courses of actions conducing to CSR implementation, involving both coordination and enactment. We distinguish between four courses of actions in the CSR departments (centralizing, coalescing, orchestrating, and consulting) and two courses of actions in the functional departments (decentralizing and tailoring). As our data suggest that coordination and enactment work in tandem, we capture these insights in a model of CSR implementation as coordinated enactment. Our research contributes to the literature by explaining how CSR departments and functional departments enact and simultaneously coordinate CSR at a particular implementation stage, thus illuminating how and why the variance in CSR implementation occurs.
... Nevertheless, several recent individual-level studies reject the assumption that managers mechanically implement practices that are deemed to be effective or legitimate. In this view, a few authors maintain that practice adoption is not the result of legitimacy and efficacy factors in their own right but rather of people's evaluations of these factors (e.g., Bendoly & Cotteleer, 2008;Braunscheidel et al., 2011;Jacqueminet, 2020;Rogers et al., 2007). These studies suggest that managers, through complex cognitive processes, base their decisions and actions on their beliefs regarding the practice and the context (e.g., Croson et al., 2013;Eggers & Kaplan, 2013;Helfat & Peteraf, 2015;Kennedy & Fiss, 2009;Nadkarni & Barr, 2008). ...
... Both the efficacy and legitimacy perspective have dominated scholarly explanations of why and with what level of success organizations adopt new operational practices (Jacqueminet, 2020;Ketokivi & Schroeder, 2004;Leseure et al., 2004). According to the efficacy perspective, adoption depends on the fit between the practice and a range of internal and external contextual factors. ...
... Second, we must clarify the boundaries within which individuals seek legitimacy. In the context of multinational firms, the "important others" for operations managers are arguably senior managers at the headquarters and peers at sister facilities (Jacqueminet, 2020;Kostova et al., 2008). Accordingly, operations managers' observations of the headquarters' and prestigious sister facilities' actions and communications provide the basis for their legitimacy-related beliefs. ...
Companies that seek to improve their operational performance by adopting new practices often report disappointing adoption rates. The literature concerning practice adoption has tended to focus on efficacy and legitimacy drivers at the organizational level. However, there exists convincing evidence that practice adoption largely depends on the commitment of those managers involved in the adoption of a given practice. Thus, we investigate what prompts operations managers to commit to practice adoption. We draw on the theory of planned behavior to explore the cognitive foundations of 76 operations managers' commitment to new operational practices. Using fuzzy‐set qualitative comparative analysis, we identify three belief configurations associated with high levels of commitment—“the Follower,” “the Pragmatist,” and “the Reformer.” We contribute a behavioral operations perspective to the literature on practice adoption by providing an individual‐level and configurational view of managerial commitment to change.
... 6, pp. 1515-1537, © 2020 has shown that diverse teams display stronger collective team identification and engage in higher levels of information elaboration when team members have strong intrinsic motivation for cognitive activities (Kearney et al. 2009). ...
... 6, pp. 1515-1537, © 2020 will not only reduce the perceived likelihood of receiving future rewards, but also run counter to the fulfillment of employees' social exchange motivation. As noted, social interdependence theory and research suggest that people pay more attention to instrumental-rather than social or personal-aspects of others (e.g., competence, knowledge) when they recognize interdependent relations with others to achieve goals and rewards (Gruenfeld et al. 2008, Belmi andPfeffer 2018). ...
... 6, pp. 1515-1537, © 2020 most common job), training (i.e., average annual training hours), and benefit programs (i.e., the mean across 30 dummy variables representing various benefit programs such as pension, healthcare, and work/family-related programs). ...
Despite substantial scholarly attention to workforce demographic diversity, existing research is limited in understanding whether or in what contexts firm-level racial diversity relates to performance and workforce outcomes of the firm. Drawing on social interdependence theory along with insights from social exchange and psychological ownership theories, we propose that the use of broad-based stock options granted to at least half the workforce creates the conditions supporting a positive relationship between workforce racial diversity and firm outcomes. We examine this proposition by analyzing panel data from 155 companies that applied for the “100 Best Companies to Work For” competition with responses from 109,314 employees over the five-year period from 2006 to 2010 (354 company-year observations). Findings revealed that racial diversity was positively related to subsequent firm financial performance and individual affective commitment and was not significantly associated with subsequent voluntary turnover rates, when accompanied by a firm’s adoption of broad-based stock options. However, under the nonuse of broad-based stock options, racial diversity was significantly related to higher voluntary turnover rates and lower employee affective commitment, with no financial performance gains. By documenting the beneficial effects of financial incentives in diverse workplaces, this paper extends theory asserting the value of incentives for performance.
... Other studies at the organizational level illustrate how strategic differentiation motivates firms to respond competitively to certified peers (DeBoer, Panwar, & Rivera, 2017), initiate sustainability reporting (Bebbington, Higgins, & Frame, 2009), or meet sustainability requirements from headquarters (Jacqueminet, 2020). Firms respond to institutional demands by integrating social and environmental practices, simultaneously complying with pressures and creating long-term value (Miska, Szőcs, & Schiffinger, 2018). ...
... Similarly, in recognizing that corporate social sustainability is not a single-firm endeavor, Matinheikki et al. (2017) find that actors' relationships with their institutional, organizational, and socio-material environment are moderating aspects of a company's efforts toward shared value. Others map interpretative dynamic factors that moderate organizations' and subunits' perceptions, which are reflected in their actions, such as ideological differences (Den Hond & De Bakker, 2007) and value consistency (Jacqueminet, 2020). ...
This review examines the integration of institutional theory with social and environmental
efforts in management (i.e., regarding sustainability, corporate social responsibility, and
environmental, social, and governance objectives). By analyzing 720 studies published
between 1997 and 2023, we develop a multi-level model that maps the antecedents of different
actors (e.g., industries, organizations, individuals) to respond to or reshape institutional
structures, the mechanisms they use, the moderators, and outcomes of their practices. Our
findings emphasize the dynamic interplay between structure and agency across systemic, organizational, and individual levels, offering a comprehensive framework for future
research. We highlight three key observations: first, while substantial research explores how
institutions shape actors, more attention is needed to understand the reciprocal influences as
actors are shaped by and reshape institutions over time. Second, individual-level dynamics
remain significantly underexplored, with limited focus on resistance, demotivation, and failure—
essential elements of the complexity of institutional processes. Finally, we identify a
critical need to examine the unintended consequences of social and environmental efforts,
revealing how these endeavors may undermine their goals, create new challenges, or generate
unexpected solutions.
... Other studies at the organizational level illustrate how strategic differentiation motivates firms to respond competitively to certified peers (DeBoer, Panwar, & Rivera, 2017), initiate sustainability reporting (Bebbington, Higgins, & Frame, 2009), or meet sustainability requirements from headquarters (Jacqueminet, 2020). Firms respond to institutional demands by integrating social and environmental practices, simultaneously complying with pressures and creating long-term value (Miska, Szőcs, & Schiffinger, 2018). ...
... Similarly, in recognizing that corporate social sustainability is not a single-firm endeavor, Matinheikki et al. (2017) find that actors' relationships with their institutional, organizational, and socio-material environment are moderating aspects of a company's efforts toward shared value. Others map interpretative dynamic factors that moderate organizations' and subunits' perceptions, which are reflected in their actions, such as ideological differences (Den Hond & De Bakker, 2007) and value consistency (Jacqueminet, 2020). ...
... For instance, research has found that values embedded in institutional structures related to CSR, such as codes of responsible business conduct (Perez-Batres et al., 2010;Scheiber, 2015), ecologically and socially responsible industry standards (Baek, 2017;Helms et al., 2012), and organizational social and environmental policies (Midttun et al., 2015;Ramus & Montiel, 2005), influence firms' propensity to engage in such CSR initiatives. From an agency point of view, research has also noted that values promote the adoption of CSR-oriented practices by firms (e.g., Jacqueminet, 2020;Karam & Jamali, 2013) and managers (e.g., Acosta et al., 2021;Acquier et al., 2018). For instance, values inspire employees to create momentum for CSR in their organizations and to work towards establishing CSR structures (e.g., Aguilera et al., 2007;Bondy et al., 2012;Maignan & Ralston, 2002;Windsor, 2006). ...
... According to recent research, no quality of values is 'more important or intriguing than their role in motivating and directing action' (Kraatz et al., 2020, p. 485). Values are central drivers of agentic choices for CSR for firms (e.g., Jacqueminet, 2020;Karam & Jamali, 2013) and managers (e.g., Acosta et al., 2021;Acquier et al., 2018). CSR managers, for example, tend to be highly driven by values that concern 'the right thing to do' (Risi & Wickert, 2017;Wickert & de Bakker, 2018) and have been described as 'moral agents' (Hemingway & Maclagan, 2004). ...
Research applying institutional theory to corporate social responsibility (CSR) has experienced remarkable momentum. Institutional theory-based CSR research illustrates the role of values in guiding both agentic choices for CSR and the influence of institutional structures on CSR agency. Although values have been explored in this literature, systematic studies of values that seek to gain insights into the mutual relationship between agentic choices and structures are lacking. Such insights are crucial for exploring whether and how CSR is enabled or constrained. We thus ask two interrelated questions: (1) What is the role of values in institutional theory-based CSR research? (2) How and along which avenues should future institutional theory-based CSR research that focuses on values be mobilised? Based on our analysis of this line of literature from 1989 until 2021, first, we take stock of established institutional theory perspectives on CSR and disentangle what role values have played in this literature. Second, we outline how to mobilise values in future institutional CSR research based on four promising but under-investigated areas. From our literature analysis, two central functions emerge (which we label ‘bridging’ and ‘referencing’) that values can perform in the institutional analysis of CSR. Based on these two functions, our values-focused framework will help scholars examine the moral foundations that inform business–society interactions as well as understand how companies can responsibly manage those interactions with societal stakeholders.
... Building on existing work on dual embeddedness (Meyer et al., 2011;Pu & Soh, 2018;Rosenzweig & Singh, 1991), we show how legitimacy challenges stemming from the activities of subsidiaries interact with challenges to the legitimacy of the MNC generated at the home-country and global levels to jointly shape the corporation's global CSP response (Christmann, 2004). This allows us to widen the focus of existing literature that has concentrated on CSP responses at the subsidiary level (Jacqueminet, 2020;Rathert, 2016) and the impacts of corporate legitimacy on the CSP behavior of subsidiaries (Jacqueminet, 2020;Zhou & Wang, 2020). Our findings suggest that homecountry embeddedness matters more than host-country embeddedness in shaping an MNC's management of CSP, even in response to the particular subsidiary's activities. ...
... Building on existing work on dual embeddedness (Meyer et al., 2011;Pu & Soh, 2018;Rosenzweig & Singh, 1991), we show how legitimacy challenges stemming from the activities of subsidiaries interact with challenges to the legitimacy of the MNC generated at the home-country and global levels to jointly shape the corporation's global CSP response (Christmann, 2004). This allows us to widen the focus of existing literature that has concentrated on CSP responses at the subsidiary level (Jacqueminet, 2020;Rathert, 2016) and the impacts of corporate legitimacy on the CSP behavior of subsidiaries (Jacqueminet, 2020;Zhou & Wang, 2020). Our findings suggest that homecountry embeddedness matters more than host-country embeddedness in shaping an MNC's management of CSP, even in response to the particular subsidiary's activities. ...
Research Summary
This article examines how different international diversification strategies impact the legitimacy challenges multinationals face and the way they manage their corporate and social responsibilities. Analyzing these questions in a sample of companies in extractive industries, we find that those who pursue resource‐seeking investments that involve locating extraction operations overseas respond with the largest improvement in their corporate‐level social performance (CSP). Those pursuing efficiency‐seeking by establishing processing subsidiaries abroad increase their CSP less, with the smallest increase for those pursuing market‐seeking through marketing and sales operations overseas. For each type of activity established overseas, the increase in CSP becomes greater the more developed the company's home country and the larger its international footprint, but is not dependent on the host country's level of development. These findings suggest that, in today's globalized world, the legitimacy challenges that result from subsidiaries' activities increasingly need to be managed at a global, corporate level.
Managerial Summary
This article investigates the relationships between different international diversification strategies, the different legitimacy challenges they create, and corporate‐level social performance (CSP) responses. For multinationals operating in the extractive industries, we find important legitimacy spillovers from different types of subsidiary activities on the corporation, but these also vary, leading it to respond with differential increases in global CSP. These increases are greatest for resource‐seeking diversification, involving the location of extractive activities abroad, moderate for efficiency‐seeking diversification, involving the location of processing activities and least for market‐seeking diversification, involving the location of marketing and sales activities. For each type of subsidiary activity, we also find that the increases in CSP are larger the more developed the company's home country and the larger its international footprint, but are not dependent on the host country's level of development. We show how these results extend existing theory and draw implications for management practice.
... Theoretically, scholars have utilized a variety of lenses to understand the implementation of practices in MNCs. Important in this regard are: institutional perspectives which have, in particular, surfaced issues related to the gaining and maintaining of legitimacy (Jacqueminet, 2020;Kostova & Zaheer, 1999) and the dialectic surrounding the desire to standardize or localize HRM practices in MNC units operating across multiple contexts (Ferner, Belanjer, Tregaskis, Morley, & Quintanilla, 2013;Parry, Dickmann, & Morley, 2008); process perspectives, increasingly calling attention to the complexity surrounding implementation (Van Mierlo et al., 2018); and more recently paradox perspectives which underscore some of the contradictions inherent in different organizational settings and the efforts actors engage in to navigate them (Keegan, Bitterling, Sylva, & Hoeksema, 2018;Nadiv & Kuna, 2020). ...
... In addition, to further aid meaning, we curated insights from on-going practice observations made during the delivery of a succession of training and development interventions led by the first author, and from a range of assembled documents and artifacts relating to the HiPo programs designed and implemented by these MNCs. We adopt an intra-unit perspective in the sense that we give consideration to some of the tensions that arise between actors who mandate and design the practice and those who are delegated to implement it (Jacqueminet, 2020). Overall, our study casts light on the various tensions that arise in the context of the implementation of HiPo programs over time and the ways in which salient proximal actors respond to attendant paradoxes as they unfold. ...
Drawing on the utility of paradox theory and adopting a micro‐practice perspective, we explore the implementation of high potential talent development (HiPo) programs in multinational corporations (MNCs). In doing so we take an emergent approach to implementation and seek to cast light on some of the day‐to‐day tensions that arise, along with key responses that salient actors appear to make when navigating these paradoxes. Through an inductive, mixed method study involving nine MNCs, we found that, over time, actors construed three particular sets of performance paradoxes relating to variations in their goals, in their beliefs, and in their roles in the particular HiPo programs in focus. We also found that these actors responded to the tensions experienced using an assortment of both defensive and proactive actions. Finally, we uncovered that both the tensions and responses in play vary with the implementation phase of the HiPo program. We highlight some key practice implications that arise from our work, acknowledge attendant limitations and identify possible directions for future research.
... This issue is particularly relevant for contested legitimacy objects in They found that validity cues significantly affect propriety judgments, with stronger effects for authorization compared to endorsement. Given the evidence that alignment between an evaluator's values and validity cues facilitates practice implementation in organisations (Jacqueminet 2020;Jacqueminet and Durand 2020), the conversation has begun to focus on how evaluators' personal values may influence the effect of validity cues on propriety and behaviour. ...
In this chapter, we examine the burgeoning scholarship on legitimacy and briefly summarize the intellectual trajectory of this important concept. We discuss current conversations in legitimacy research and suggest future research directions that we believe are necessary not only to advance scholarship on organisational legitimacy but also to inform the broader field of organisational social evaluations. We recommend that scholars build richer connections between levels of analysis both theoretically and empirically, expanding on the multilevel perspective on legitimacy that has developed rich linkages between societal and individual levels. Recognizing that one of the most important research frontiers in the next decade is empirical in nature, we also develop methodological recommendations, specifically for the development of instruments to measure individual-level legitimacy, the aggregation of individual-level measures into collective-level legitimacy, and the behavioural implications of legitimacy judgments.
... Another stream within this literature has addressed MNEs' policies and strategies after selecting their host countries and accomplishing their investments, such as MNEs' CSR and selfregulation. IB research has investigated the diffusion of CSR within MNEs (e.g., Jacqueminet, 2020) and the adoption or implementation of the SDGs (e.g., van Tulder, Rodrigues, Mirza, & Sexsmith, 2021), including the transition to cleaner energy (e.g., Doh, Budhwar, & Wood, 2021) and the ensuing MNE investments in renewable energies. As providers of public goods, assuming quasi-public roles (e.g., Boddewyn & Doh, 2011), MNEs pursue the dual objective of maximizing economic returns while attending to the basic needs of underserved communities (e.g., London & Hart, 2004). ...
... This suggests that when organizations devise strategies to gain, maintain, or repair their legitimacy, they need to consider not only the compound of validity cues that affect evaluators' propriety judgment formation but also the degree to which certain personal norms, values, and beliefs are prevalent in a population. Importantly, our findings complement the work of Jacqueminet (Jacqueminet, 2020;Jacqueminet & Durand, 2020) showing that the consistency between an organization's values and validity cues related to authorization and endorsement facilitates the implementation of corporate social responsibility within an organization. Whereas the explanandum in these works was not behavioral outcomes (practice implementation), our study demonstrates that the consistency between values and validity cues has a significant influence on evaluators' propriety judgments. ...
In this study, we draw on the legitimacy-as-perception perspective in organization and management studies (e.g.: Siraz, Claes, De Castro, & Vaara, 2023; Suddaby, Bitektine, & Haack, 2017; van den Broek, Langley, Ehrenhard, & Groen, 2022) to investigate how evaluators form individual legitimacy judgments (propriety) when exposed to multiple or even conflicting cues in the context of fracking. Previous research on legitimacy establishes it as a multilevel construct in which propriety refers to an individual’s own judgment of the appropriateness of a given legitimacy object, and validity refers to legitimacy at the collective level. Although an inherently collective-level construct, validity finds its way into the appraisal process of individual evaluators and enters their cognition in the form of ‘validity cues. While there has been significant interest in the interaction between validity and propriety (Haack & Sieweke, 2018; Ivanova Ruffo, Mnisri, Morin-Esteves, & Gendron, 2020), as well as in its behavioral correlates, including practice implementation (Jacqueminet & Durand, 2020), protest behavior (Walker, Thomas, & Zelditch Jr, 1986), organizational change (Huy, Corley, & Kraatz, 2014), and institutionalization (Arshed, Chalmers, & Matthews, 2019), an unresolved puzzle in the legitimacy-as-perception perspective is the question of under what conditions a given validity cue gains predominance in the formation of propriety and overrides the influence of other validity cues. As previous work has predominantly examined the impact of a single source of validity (e.g.: Elsbach, 1994; Johnson, Dowd, Ridgeway, Cook, & Massey, 2006; Walker et al., 1986), we know little about how the concurrent presence of multiple and potentially conflicting validity cues from different sources shapes propriety judgment formation. This question is particularly relevant in contested arenas where polarized legitimacy is common (Gond et al., 2016; Scherer et al., 2013; Siraz et al., 2023). In such settings, individual evaluators are confronted with ‘multiple validities’ (Bitektine & Haack, 2015: 59), and a priori it is not clear whether and how engagement with different validity cues affects evaluators’ propriety judgments about a focal subject of legitimacy. Legitimacy subjects are ‘social entities, structures, actions, and ideas whose acceptability are being assessed’ (Deephouse and Suchman, 2008: 54). A central assumption in the literature, namely that legitimacy reflects a relationship between a legitimacy subject and an evaluator (or group of evaluators) who is assessing the subject based on a ‘socially constructed system of norms, values, beliefs, and definitions’ (Suchman, 1995: 574), has been largely overlooked in empirical research on legitimacy, and prior works have rarely considered individual-level characteristics when studying the legitimacy process (Haack et al., 2021; Tost, 2011).
Considering validity cues concomitantly, however, merely provides a partial understanding of formation of propriety judgments. Evaluators’ personal values are likely to affect how validity cues impact their judgment formation and thus contribute to shaping their propriety judgments (Finch, Deephouse, & Varella, 2015; Schwartz et al., 2012). According to Schwartz’s theory of basic individual values (1994; 2012), values influence evaluations because they serve as ‘guiding principles in the life of a person.’ In addition, values have been shown in numerous studies to influence the way evaluators make up their mind (e.g. Judge & Bretz, 1992; Lamin & Zaheer, 2012). In the context of fracking, evaluators’ environmentalism is particularly relevant (Gond et al., 2016). While scholars have sought to conceptualize the mechanisms and underlying processes of legitimacy judgment formation (Bitektine & Haack, 2015; Tost, 2011), and recent empirical research has progressed toward this goal (e.g. Finch et al., 2015; Haack & Sieweke, 2018), the role of evaluators’ values in judgment formation is yet to be further investigated.
Building on the legitimacy-as-perception perspective (e.g., Suddaby et al., 2017) and the literature on environmentalism (e.g.: Dietz, Fitzgerald, & Shwom, 2005), we advance scholarly understanding of propriety judgment formation in a context of multiple and conflicting cues. We carried out full-profile conjoint experiments to investigate how multiple validity cues and evaluators’ values affect judgment formation. Evaluators were systematically exposed to four simultaneous and different cues varying in valence. This resulted in 7,904 propriety judgments nested in 247 individuals. Given the complex nature of propriety judgment formation involving multiple cues and evaluators’ personal values, empirical research in this area is difficult to conduct. By conducting conjoint analysis, we were able to capture how different validity cues are simultaneously used in propriety judgment formation and further investigate the effects of evaluators’ environmentalism. Moreover, the method allowed us to present various combinations of favorable and/or unfavorable cues to avoid biasing evaluators with a particular cue order or cue valence (Lohrke, Holloway, & Woolley, 2010; Shepherd, Patzelt, & Baron, 2013). Evaluators could thus assess multiple and conflicting cues.
We make three contributions to the literature. First, this study contributes to the legitimacy-as-perception perspective by investigating how, and to what extent, different validity cues shape propriety. Our findings underscore the need to recognize that propriety is formed by concomitant interpretation of a bundle of validity cues, and they highlight that considering cues separately may lead to inaccurate conclusions about the impact of specific cues. This insight is particularly important given the increasing complexity and dynamism of the environment in which legitimacy subjects and evaluators are embedded. Second, we demonstrate that both validity cues and evaluators’ personal values play a significant role in propriety judgment formation. The concomitant consideration of both validity cues and values allows us to develop a holistic understanding of the judgment formation process. Our model illustrates how evaluators’ values change the weight that they attribute to different validity cues, thereby affecting their propriety judgments. This is a critical observation, because it underscores the importance for legitimacy subjects to consider evaluators’ values in the context in which they operate. Moreover, prior literature suggests that evaluators attenuate propriety judgments that are inconsistent with the perceived validity because they fear social sanctions (Bitektine and Haack, 2015), yet our findings show that attenuation also occurs when the expression of propriety judgments remains anonymous and without the risk of social sanctions. Finally, using a series of full-profile conjoint experiments allows us to investigate real-time propriety judgment formation in a context of multiple consistent and conflicting validity cues. This approach opens additional research opportunities for the legitimacy-as-perception perspective and social evaluations research more generally.
... Prior research shows that companies may increase their impact by tailoring the ends of the CSR activities to local contexts (Husted and Allen, 2006;Jamali, 2010). In contrast, when it comes to the means that companies use to realize their CSR-related ends, research on CSR implementation emphasizes consistency as essential for CSR implementation (e.g., Christmann, 2004;Jacqueminet, 2020;Risi et al., 2023b). Asmussen and Fosfuri (2019, p. 912), for example, note that multinational companies 'must ensure that CSR actions and policies are consistently implemented across their network of subsidiaries'. ...
We use the concept of means–ends decoupling to examine why companies continue to be major contributors to environmental and social problems despite committing increasingly to corporate social responsibility (CSR). Specifically, we ask: How do companies restrain (versus fail to restrain) means–ends decoupling? We answer this question through a comparative case study of four multinational companies with different levels of means–ends decoupling. Based on interviews and secondary data, we inductively identify two distinct approaches to CSR implementation: experimental vs. consistency‐oriented CSR implementation. Experimental CSR implementation means that companies (1) produce CSR knowledge about what is happening in specific CSR contexts and use this knowledge to (2) adapt CSR practices to local circumstances – an interplay that restrains means–ends decoupling. Consistency‐oriented CSR implementation lacks this interplay between knowledge production and practice adaptation, which fosters means–ends decoupling. Our model of experimental versus consistency‐oriented CSR implementation advances two streams of research. First, we advance research on means–ends decoupling by highlighting the importance of experimentation for restraining means–ends decoupling. Second, we advance research on the impact of CSR activities by questioning the widespread assumption that consistency should be at the heart of CSR implementation.
... The overlap can increase again at a later point, resulting in a different dynamic. How employees identify themselves with the groups they are active in, or with the organization as a whole, is dynamic (Bednar et al., 2020), for example due to changing practices in groups (Jacqueminet, 2020), suggesting that frequent changes in the microstructures between groups are possible. ...
The title of my dissertation, ‘Bridging the gap: Brokering online organizational groups’, refers to the role of brokering, and particularly within an online environment such as an Employee Social Network (ESN). Employees who have access to an ESN are able to start online groups, share knowledge, discuss ideas, and find colleagues based on interest. A number of employees will engage in multiple groups at the same time, and as such bring those groups closer together, as the groups share one or more members. As a result, a network of groups arises. I view these employees who are active in multiple groups as brokers. In order to gain more understanding of what is going on beneath the surface of ESNs, I turned towards social networks theory. Brokers connect groups, which results in a social network of groups. Also, employees interact with other employees, which results in a social network of individual actors. My aim for this dissertation was to understand the dynamics of these different kinds of networks, and I depart from the following overall research question: How do brokers enact brokering on an Enterprise Social Network, and which brokering mechanisms are at play at multiple organizational levels over time? All key findings are rooted in what I refer to as collective dynamic brokering behavior. This dissertation adds to the debate on brokering from a collective point of view, which so far left unanswered the aspect of multiple brokers sharing the same brokerage position and the influence this may have on brokering outcomes. I also add to the debate on dynamic brokering. As brokering activities of various brokers increase or decrease in intensity, connections between groups become more fluid. Finally, this dissertation makes a contribution to our understanding of brokering behavior by unpacking how brokers experience the networked environment in which they operate.
... For example, the access debate could be used to further study how differences between the institutional environments of companies' home or host countries affect the selection of initiatives that have potential consequences for stakeholder welfare (Campbell et al. 2012;Rathert 2016). In the case of the pharmaceutical industry, firms display considerable variation in product portfolios, footprints in emerging markets, or firm structure that may impact the composition of initiatives making up a firm's approach to a global challenge (Jackson and Rathert 2017;Jacqueminet 2020). The Access to Medicine Index suggests that companies with a higher number of products of Source: Own calculations based on IFPMA members in the Asset4 database. ...
Insufficient access to medicines is a persistent global problem that affects billions of people in low- and middle-income countries. In this chapter, we use access to medicines as a case to understand how business can become instrumental in making progress on persistent and global problems we associate with sustainable development. We examine the emergence and evolution of access to medicines as a mandate for the pharmaceutical industry to contribute to sustainable development. More specifically, we trace the historical developments of corporate social initiatives in the industry and revisit existing research on access to medicines in management and related fields. We then introduce three distinct analytical perspectives - field emergence and change, firm heterogeneity, organizational processes - to examine access to medicine, expose managerial challenges and offer a research agenda that helps to advance research on access to medicines and, more generally, on corporate efforts to address pressing global problems subsumed under the Sustainable Development Goals.
... It is a welldocumented phenomenon in organizational literature that variability of implemented concepts, practices and structures is more likely to be the rule than the exception (Sahlin and Wedlin, 2008;Ansari et al., 2010), and this phenomenon undoubtedly requires explanation. Moreover, there is a call to examine practice implementation beyond adoption as postadoption stages received at best modest attention in institutional theory (Zeitz et al., 1999;Staw and Epstein, 2000;Benders and Van Veen, 2001;David and Strang, 2006;Røvik, 2011;Jacqueminet, 2020;Aksom, 2020), while an ever-growing empirical evidence suggests that maintenance is far from being the only outcome of institutional practice adoption (Oliver, 1992;Abrahamson, 1996;Røvik, 2011). ...
Purpose
Institutional theory had been developed for the purpose of explaining widespread diffusion, mimetic adoption and institutionalization of organizational practices. However, further extensions of institutional theory are needed to explain a range of different institutional trajectories and organizational responses since institutionalized standards constitute a minority of all diffusing practices. The study presents a theoretical framework which offers guidelines for explaining and predicting various adoption, variation and post-adoption scenarios.
Design/methodology/approach
The paper is primarily conceptual in nature, and the arguments are developed based on previous institutional theory and organizational change literature.
Findings
The notion of institutional inertia is proposed in order to provide a more detailed explanation of when and why organizations ignore, adopt, modify, maintain and abandon practices and the way intra-organizational institutional pressures shape, direct and constrain these processes. It is specified whether institutional inertia will be temporarily eclipsed or whether it will actively manifest itself during adoption, adaptation and maintaining attempts. The study distinguishes between four institutional profiles of organizational practices – institutionalized, institutionally friendly, neutral and contested practices – which can vary along three dimensions: accuracy, extensiveness and meaning. The variation and post-adoption outcomes for each of them can be completely characterized and predicted by only three parameters: the rate of institutional inertia, institutional profile of these practices and whether they are interpretatively flexible. In turn, an extent of intraorganizational institutional resistance to new practices is determined by their institutional profile and flexibility.
Practical implications
It is expected that proposed theoretical explanations in this paper can offer insights into these empirical puzzles and supply a broader view of organizational and management changes. The study’s theoretical propositions help to understand what happens to organizational practices after they are handled by organizations, thus moving beyond the adoption/rejection dichotomy.
Originality/value
The paper explores and clarifies the nature of institutional inertia and offers an explanation of its manifestation in organizations over time and how it shapes organizational practices in the short and long run. It challenges a popular assumption in organizational literature that fast and revolutionary transition is a prerequisite for successful change. More broadly, the typology offered in this paper helps to explain whether and how organizations can successfully handle and complete their change and how far they can depart from institutional norms.
... It is a well-documented phenomenon in organizational literature that variability of implemented concepts, practices and structures is more likely to be the rule than the exception (Sahlin and Wedlin, 2008;Ansari et al., 2010) and this phenomenon undoubtedly requires explanation. Moreover, there is a call to examine practice implementation beyond adoption as post-adoption stages received at best modest attention in institutional theory (Zeitz et al., 1999;Staw and Epstein, 2000;Benders and van Veen, 2001;David and Strang, 2006;Rovik, 2011;Jacqueminet, 2020;Aksom, 2020) while an ever-growing empirical evidence suggests that maintenance is far from being the only outcome of institutional practice adoption (Oliver, 1992;Abrahamson, 1996;Rovik, 2011). ...
Institutional theory had been developed for the purpose of explaining widespread diffusion, mimetic adoption and institutionalization of organizational practices. However, further extensions of institutional theory are needed to explain a range of different institutional trajectories and organizational responses since institutionalized standards constitute a minority of all diffusing practices. We present a theoretical framework that offers guidelines for explaining and predicting various adoption, variation and post-adoption scenarios. The notion of institutional inertia is proposed in order to provide a more detailed explanation of when and why organizations ignore, adopt, modify, maintain and abandon practices and the way intra-organizational institutional pressures shape, direct and constrain these processes. It is specified whether institutional inertia will be temporarily eclipsed or it will actively manifest itself during adoption, adaptation and maintaining attempts. We distinguish between four institutional profiles of organizational practices: institutionalized, institutionally friendly, neutral and contested practices which can vary along three dimensions: accuracy, extensiveness and meaning. The variation and post-adoption outcomes for each of them can be completely characterized and predicted by only three parameters: the rate of institutional inertia, institutional profile of these practices and whether they are interpretatively flexible. In turn, an extent of intra-organizational institutional resistance to new practices is determined by their institutional profile and flexibility.
... Scholars recognize the fact that MNEs face pressure from external and internal environments (Kostova et al., 2008) that may also influence the way in which companies behave in terms of sustainable commitment (Kostova and Roth, 2002). For example, the CS strategies of firms are influenced by the national and transnational contexts in which they are embedded (Marano and Kostova, 2016), by the competition to which they are exposed (Campbell, 2007) and by the MNEs' internal environment (Jacqueminet, 2020). Current research focuses on whether internal and external pressures favor or hinder CS implementation. ...
This paper analyses corporate sustainability (CS) in multinational enterprises (MNEs) and, in particular, the way the commitment of subsidiaries depends on different configurations of internal and external influence exerted by stakeholders, institutions and corporate headquarters. The study is based on primary data collected through surveys sent to subsidiary managers in the hotel industry in 19 different countries in the world. The findings of a principal component analysis and a cluster analysis show four different clusters of firm behaviors, depending on the external stimuli and the internal obstacles subsidiaries face when implementing CS. These may actually facilitate or hinder its implementation. Results show that some subsidiaries act proactively towards CS, overcoming objective difficulties, whereas others appear to be sluggish, since they feel no pressure to implement such activities, even though they are increasingly important in the current scenario. This paper contributes to the literature on CS in international business and also provides practical recommendations to help MNEs achieve better CS results through a more effective implementation of sustainability activities by their subsidiaries.
Societal actors increasingly expect multinational enterprises (MNEs) to positively impact the host countries in which they operate. While these expectations have prompted IB scholars to engage more extensively with the societal impacts of foreign direct investment (FDI), our collective knowledge of these impacts is limited. Early IB literature investigated FDI’s aggregate impact but generally confined the scope to economic effects. Contemporary, strategy-oriented IB scholarship broadened the scope of impact types to include social and ecological effects, yet mostly limited the scope of the impacted actors to MNEs themselves. We argue that IB research should more comprehensively assess FDI’s impact by incorporating social and ecological effects in addition to economic ones, and by accounting for a broader set of stakeholders beyond MNEs. IB scholars should challenge the assumption that FDI’s economic impacts spill over to positive societal outcomes, and that MNEs’ interests parallel those of host countries. A more comprehensive assessment will require IB scholars to question “win–win” assumptions about the complementarity of corporate societal and financial performance, examine FDI’s societal impact over longer time horizons, leverage innovative approaches from allied sciences, and consider interactions between different types of societal effects in order to appreciate their sometimes countervailing effects.
The purpose of this JIBS editorial is to outline the vision and mission of the new JIBS Societal Impact Advisory Committee (SIAC). We define “societal impact” as research that has potential effects outside academia, for example, on communities, economies, environments, and other actors. We propose that societal impact is especially important for international business (IB) research but also particularly challenging, given the cross-national dimensions of IB and the differing social, economic, and political preferences faced by MNEs across the contexts in which they operate. We reference the Responsible Research in Business and Management (RRBM) movement and other professional association initiatives as potential sources of inspiration and guidance for understanding the societal impact of IB research generally and the vision and mission of the SIAC in particular. We outline some implications for IB scholarship to improve its societal impact and conclude by describing SIAC’s roles and responsibilities as related to JIBS authors, editors, reviewers, and the broader IB scholarly and practice communities.
Integrated reporting (IR) has widely been promoted as the next evolutionary step in corporate disclosure which would soon replace traditional reporting practices. Embedded in a zeitgeist that favors sustainability, this outlook would suggest high IR adoption rates among reporting organizations. Our analysis of IR in Germany from 2008 to 2019 shows, however, that organizations approached IR with a wait-and-see mentality. This approach cannot be described adequately by the existing conceptualizations of (partial) practice adoption. We therefore develop the notion of wait-and-see-ism, defined as the deliberate and potentially long-lasting postponement of a decision to adopt a practice while its further development is monitored silently. We see limited, though continuous, efforts to prepare for the prospect of adopting the practice of IR quickly at a later stage. Wait-and-see-ism expands on prior work on partial adoption by emphasizing its temporal dimension. This adds an important yet undertheorized option that organizations can employ to respond to ambiguous institutional demands, thus explaining the stalling of promising management practices.
Increasing interest in the use of design thinking (DT) in innovation has called into question its integration in organizational settings. We draw upon literature on management innovation and new practice implementation that highlights potential cultural conflicts between the values and assumptions underpinning the new practice and the culture of the organization that adopts it. We investigate the cultural fit between DT and the adopting firm through qualitative studies of 13 cases of DT implementation in large established firms complemented with data collected during 8 workshops with DT practitioners and scholars. We abductively propose a cultural archetype of DT comprising eight dimensions: subjective and aesthetic ways of knowing; long-term and non-linear views about time; intrinsic motivation and sense of purpose; flexibility and change; relationships, empathy, and emotions at work; collaboration and inclusion; team autonomy and informality; and external orientation. We identify challenges and consequences associated with cultural misfits encountered in the implementation of DT: lack of legitimacy; lack of depth; disengagement; incrementalism; poor teamwork and alienation; collaboration lip service; micromanaged processes; and lack of external orientation. We thus (i) develop a characterization of DT by providing a detailed cultural archetype that we discuss relative to previous literature on DT and (ii) enrich the research on the recursive relationship between organizational culture and DT implementation, contributing to research on emotions in management and innovation culture. We also (iii) contribute to research on the challenges encountered by firms when adopting DT, extending the research on difficulties linked to cultural misfit when implementing new practices. Finally, we (iv) contribute to research on practice implementation and management innovation by highlighting the interplay between cultural fit, legitimacy, and the implementation climate.
Drawing on institutional theory, this study examines the question of how host country institutions affect corporate social responsibility (CSR) adoption by multinational enterprises (MNEs). I propose that CSR encompasses a set of practices that MNEs draw on to signal legitimacy in different kinds of institutional contexts – contexts that vary in how they shape issue salience and stakeholder power in a given issue field. Building on ideas related to field opacity and the managerial implications of CSR, I study why MNEs adopt two distinct types of CSR policies: standards-based CSR in response to contexts marked by issue salience, and rights-based CSR in response to contexts marked by stakeholder power. To test these hypotheses, I use subsidiary and firm-level data from a sample of 540 Western European MNEs in the issue field of labor rights. Results show that MNEs strategically adopt these CSR policies related to their presence in distinct institutional contexts. The study offers implications for how MNEs manage the legitimacy of their global operations and how CSR, as a form of private governance, can emerge as both a substitute and complement to regulatory institutions.
The distinction of macro- and microfoundations of institutions implies a multilevel conceptualization of institutional processes. We adopt the evaluators' perspective on legitimacy to develop a multilevel theory of the legitimacy process under ideal-type conditions of institutional stability and institutional change, and we explore the dynamics of institutional change - from destabilization of the institutional order to return to stability in legitimacy judgments expressed by evaluators. We argue that through the process of institutionalization, legitimacy judgments of evaluators are subjected to social control and describe an institutional stability loop - a cross-level positive-feedback process that ensures persistence of legitimacy judgments and stability of the institutional order. Viewing institutional stability as a state of suppressed microlevel diversity, we draw researchers' attention to "silenced" legitimacy judgments and to judgment suppressor factors that induce evaluators to abstain from making their deviant judgments public. The removal of such factors leads to the (re)emergence of competing judgments in public communications and creates an opportunity for institutional change. We explore competitive strategies that address propriety or validity components of legitimacy and describe the process through which organizational fields return to a state of institutional stability.
This paper investigates how the structure of political institutions influences the effectiveness of corporate political lobbying by shaping the "veto points" and "entry points" that lobbying firms encounter and require, respectively, when attempting to influence public policies; in so doing, this study deepens our understanding of the strategic implications of institutional environments. Using large-sample and cross-country firm-level data, we find that the influence of firms' lobbying activities on public policies is weakened when there are tighter constraints generated as a result of greater political (partisan) competition and more subnational government tiers. We find that the negative association between the effectiveness of lobbying and political (partisan) competition is particularly pronounced in countries with lower electoral accountability and that the negative association between the effectiveness of lobbying and subnational government tiers is particularly pronounced in more centralized political systems.
How do subsidiaries respond to normative demands from both their headquarters and local external constituents? We propose that subsidiaries pay varying levels of attention to either demands depending on their peers’ norm-conforming behavior, resulting in heterogeneous practice implementation. We study the implementation of 25 practices, associated with three corporate social responsibility (CSR) issues in 101 worldwide subsidiaries of a multinational enterprise (MNE). Consistent with the idea that attention is limited and therefore selective, we find that external peers' conformity to the CSR norm directs subsidiaries’ attention toward the CSR-related demands of external constituents at the expense of the demands from the headquarters. However, internal peers’ conformity increases attention to both external and headquarters’ demands related to CSR. As higher attention levels result in higher practice implementation, internal and external peers' conformity drives the heterogeneity of practice implementation in the MNE. Our results suggest the need to rethink the influence of peers’ conformity on subsidiaries’ implementation of practices, as it not only triggers mimicry based on legitimacy but also and simultaneously a more strategic response based on internal and external competitive threats and attention allocation.
We examine how emerging organizations acquire shape by drawing on multiple organizational forms, a process we call organizational bricolage. Studying Indymedia London, a grassroots media collective, we propose a grounded theory of organizational bricolage that identifies how various types of organizational forms are selected and how they are instantiated into the organization. Whereas extant research has emphasized imprinting as a primary mechanism shaping newly founded organizations, we point to the additional role of organizational values. Emerging organizations augment their imprinted forms by using ancillary forms aligned with their organizational values and reinforce their core features by differentiating themselves from antagonistic forms that conflict with their values. We contribute to the literature on organizational formation by developing a process model that details how imprinted forms are subsequently modified. Moreover, we extend theories of bricolage by specifying the limits to the relative arbitrariness of bricolage as an activity, and we contribute to the study of organizational values by suggesting that they act as a focusing device shaping organizational structure.
We extend research on the diffusion of corporate practices by providing a framework for studying practice variation during diffusion processes. Specifically, we theorize about how population-level mechanisms of diffusion link with organization-level mechanisms of implementation that lead to the adaptation of practices. We also identify technical, cultural, and political elements of fit (or misfit) between diffusing practices and adopters and analyze how the process of attaining fit across these elements can trigger different patterns of adaptation.
We argue that citizenship programs are strategic investments comparable to R&D and advertising. They can create intangible assets that help companies overcome nationalistic barriers, facilitate globalization, and outcompete local rivals. Program content selection reflects a balance between legitimation and differentiation, and choices are influenced both by local institutional environments that shape expectations of corporate commitment to citizenship and by the degree of customization required because of institutional distance. Citizenship profiles therefore enable the sociocognitive integration that global companies require to operate effectively across diverse local markets.
According to the behavioral theory of the firm, managers pay sequential attention to goals and apply aspiration levels to each goal. Although many goals have been proposed for organizations, research has so far concentrated on profitability. Here it is proposed that managers form an aspiration level for size through social comparison. This proposal leads to predictions on how performance and size goals jointly affect growth. Supporting this sequential attention hypothesis, evidence from the general insurance industry shows that firms grow more when they are below the aspiration level for size, especially when performance goals are satisfied.
Scholars from diverse disciplines have proposed numerous theories of business imitation. We organize these theories into two broad categories: (1) information-based theories, where firms follow others that are perceived as having superior information, and (2) rivalry-based theories, where firms imitate others to maintain competitive parity or limit rivalry. We describe conditions under which each type of imitation is most likely and offer guidance on identifying imitation in practice. Amplification effects and other performance implications of imitation are also addressed.
We make the case that there are four distinct forms of organizational values – espoused, attributed, shared and aspirational. These partial, but related, forms encompass variation in temporal orientation and levels of analysis. We use these forms to reveal the dynamic nature of organizational values by delineating the evolution of gaps and overlaps between them. We set out a series of propositions, originating from institutional, organizational and managerial sources to explain the nature of movement between these distinct forms of values and the potential implications for organizational behaviour and performance. Finally, we consider the possibilities of this fine-grained analysis of the organizational values concept for future research.
Through an inductive study of six corporate venture capital programs, we unravel how new organizational units resolve competing forces from two different institutional environments. The data suggest that the organizational structure of units that enter a new environment depends on whether they "focus their isomorphism" internally toward the parent ("endoisomorphism") or externally toward the industry ("exoiso-morphism"). The focus of isomorphism depends on whom the units seek legitimacy with and on the professionalization of their top management teams. We discuss implications of the findings for institutional theory, corporate venture capital, and corporate venturing more generally. From the very beginning, we wanted to inculcate the sense that although we operate under this brand [the corporate brand], we are very much in effect a pri-vate equity fund. We didn't want to feel constrained by the brand, and let it affect our judgment; so we were very insistent from the beginning that the way we are organized should be almost in antithesis to how [the parent corporation] is organized. (invest-ment partner in a corporate venture capital program) We were careful to adopt as much of [the parent's] culture as possible. For instance, we practice the same role culture and communication structure. . . . Even our offices have the same layout. (head of a different corporate venture capital program)
In this article, we present the findings of a longitudinal study of coerced implementa-tion of a practice in the face of a low degree of fit between the practice and an organization's culture. Contrary to current predictions stating that a lack of cultural fit will eventually be resolved through adaptation of new practices, our findings portray the implementation of culturally dissonant practices as an ongoing process involving the mutual adaptation of organizational practices and culture. Our emerging model describes the cultural changes induced by the coercive implementation of new prac-tices as involving a partial change in shared beliefs and behavioral patterns and a more general enrichment of the cultural repertoire of organization members.
This theory-building analysis spotlights a dynamic that occurs between decoupling, legitimacy, and institutionalized misconduct. Using data gathered from a case study of widespread deceptive sales practices at a large financial services firm, we demonstrate the dangers of decoupling an organizational compliance program from the core business activities of an organization. We illustrate how decoupling created a “legitimacy facade” that enabled the institutionalization of misconduct and precipitated a loss of external legitimacy.
This paper examines the dynamics of social influence in the choices of securities analysts to initiate and abandon coverage of firms listed on the NASDAQ national market. We show that social proof—using the actions of others to infer the value of a course of action—creates information cascades in which decision makers initiate coverage of a firm when peers have recently begun coverage. Analysts that initiate coverage of a firm in the wake of a cascade are particularly prone to overestimating the firm's future profitability, however, and they are subsequently more likely than other analysts to abandon coverage of the firm. We thus find evidence for a cycle of imitation-driven choice followed by disappointment and abandonment. Our account suggests that institutionalization rooted in imitation is likely to be fragile.
We extend institutional theory's account of diffusion by examining the interplay between economic and social considerations in adoption decisions. Drawing on organizational decision-making research, we argue that both early and late adopters respond to framing and interpreting adoption decision situations as opportunities versus threats. Using data on the diffusion of total quality management (TQM) among U.S. hospitals, we found that motivations to appear legitimate coexist with motivations to realize economic performance improvement, and that issue perception is related to the extent of practice implementation. These findings prompt rethinking of the classic institutional diffusion model.
There has been rapid growth in the study of diffusion across organizations and social movements in recent years, fueled by interest in institutional arguments and in network and dynamic analysis. This research develops a sociologically grounded account of change emphasizing the channels along which practices flow. Our review focuses on characteristic lines of argument, emphasizing the structural and cultural logic of diffusion processes. We argue for closer theoretical attention to why practices diffuse at different rates and via different pathways in different settings. Three strategies for further development are proposed: broader comparative research designs, closer inspection of the content of social relations between collective actors, and more attention to diffusion industries run by the media and communities of experts.
We outline a supply and demand model of corporate social responsibility (CSR). Based on this framework, we hypothesize that a firm's level of CSR will depend on its size, level of diversification, research and development, advertising, government sales, consumer income, labor market conditions, and stage in the industry life cycle. From these hypotheses, we conclude that there is an "ideal" level of CSR, which managers can determine via cost-benefit analysis, and that there is a neutral relationship between CSR and financial performance.
We examine organizational legitimacy in the context of the multinational enterprise (MNE). After discussing three types of complexity (of the legitimating environment, the organization, and the process of legitimation) that MNEs typically face, we explore their effects on MNE legitimacy. In particular, we distinguish between the legitimacy of the MNE as a whole and that of its parts, and we develop propositions that include issues of internal versus external legitimacy and positive and negative legitimacy spillovers.
This study investigates how foreign subsidiaries gain attention from corporate head- quarters. Using detailed questionnaire and archival data on 283 subsidiaries of mul- tinational enterprises, our analysis revealed three significant findings. First, attention decisions are partially based on the structural positions that subsidiary units occupy within a corporate system—their "weight." Second, a subsidiary also has a "voice" of its own that it can use to attract attention. Third, the relationship between a subsid- iary's voice and headquarters attention is moderated by two specific aspects of the subsidiary's historical situation: geographic distance and downstream competence.
Implementation is the process of gaining targeted organizational members' appropriate and committed use of an innovation. Our model suggests that implementation effectiveness-the consistency and quality of targeted organizational members' use of an innovation-is a function of (a) the strength of an organization's climate for the implementation of that innovation and (b) the fit of that innovation to targeted users' values. The model specifies a range of implementation outcomes (including resistance, avoidance, compliance, and commitment); highlights the equifinality of an organization's climate for implementation; describes within- and between-organizational differences in innovation-values fit; and suggests new topics and strategies for implementation research.
Available for online reading at: http://www.jstor.org/discover/10.2307/259164?uid=16780720&uid=3739704&uid=2129&uid=2&uid=70&uid=3&uid=16749656&uid=67&uid=62&uid=3739256&sid=21101428091251
Deviance from social norms has been extensively examined in recent strategy research, leaving the strategic implications of conformity largely unexplored. In this article, we argue that firms can elect to conform to a norm along two dimensions: compliance with the goal and level of commitment to the procedures. We then produce a typology of four norm-conforming behaviors, which allows us to isolate differentiated effects of conformity on firm reputation. We examine the corporate environmental disclosures of 90 U.S. firms and find that firms derive different reputational rewards depending on whether they conform to the goal or procedure dimension of the environmental transparency norm. In addition, the relationship between conformity and reputation is moderated by the firm's prior reputation and the stringency of the normative environment. Copyright © 2011 John Wiley & Sons, Ltd.
This paper explores how organizations respond to simultaneous institutional influences from two distinct sources: the industry in which they operate and the local geographic community in which they are headquartered. We theorize that the existence of institutional equivalents-other organizations at the same intersection of different fields, such as the same industry and the same community-provides a clear and well defined reference category for firms and thus shapes which subset of peers the focal organization imitates most closely. We develop hypotheses about how the presence or absence of institutional equivalents affects organizations' responses to behavioral cues from different peer groups, how these effects vary when peers in different fields exhibit inconsistent behaviors, and how organizational characteristics, such as size and performance, strengthen or weaken the influence of institutional equivalents. We test our propositions through a longitudinal analysis of philanthropic contributions by Fortune 1000 firms from 1980 to 2006. Our framework illuminates how simultaneous presence in multiple fields affects organizations and introduces to institutional theory the concept of institutional equivalence, which we argue is a critical factor in determining how organizations respond to multiple institutional cues.
Under increased pressure to report environmental impacts, some firms selectively disclose relatively benign impacts, creating an impression of transparency while masking their true performance. We theorize circumstances under which firms are less likely to engage in such selective disclosure, focusing on organizational and institutional factors that intensify scrutiny and expectations of transparency and that foster civil society mobilization. We test our hypotheses using a novel panel data set of 4,750 public companies across many industries that are headquartered in 45 countries during 2004-2007. Results show that firms that are more environmentally damaging, particularly those in countries where they are more exposed to scrutiny and global norms, are less likely to engage in selective disclosure. We discuss contributions to research on institutional theory, strategic management, and information disclosure.
The last 10–15 years have seen dramatic changes in the nature of the U.S. workforce and in the structure of family life in the United States. Organizational managers face the difficult task of interpreting these changes and of deciding how to adapt the organization’s human resource policies to these changes. In this paper, we examine the processes that underlie organizational adaptation to environmental changes, focusing particular attention on describing the processes by which changes are noticed, interpreted, and elicit action. We argue that the same demographic facts are likely to get different amounts of organizational attention and may be interpreted quite differently, depending on the characteristics of the organizational context and on how work-family issues are framed. Human resource professionals have an extremely important role to play in determining both the likelihood and nature of an organization’s actions with respect to work-family changes by shaping the interpretation process.
Research summary : Raters of firms play an important role in assessing domains ranging from sustainability to corporate governance to best places to work. Managers, investors, and scholars increasingly rely on these ratings to make strategic decisions, invest trillions of dollars in capital, and study corporate social responsibility ( CSR ), guided by the implicit assumption that the ratings are valid. We document the surprising lack of agreement across social ratings from six well‐established raters. These differences remain even when we adjust for explicit differences in the definition of CSR held by different raters, implying the ratings have low validity. Our results suggest that users of social ratings should exercise caution in interpreting their connection to actual CSR and that raters should conduct regular evaluations of their ratings .
Managerial summary : Ratings of corporate social responsibility ( CSR ) guide trillions of dollars of investment, but managers, investors, and researchers know little about whether these ratings accurately measure CSR . In practice, there are examples of highly rated firms becoming embroiled in scandals and the same firm receiving sharply different ratings from different rating agencies. We evaluate six of the leading raters and find little overlap in their assessments of CSR . This lack of consensus suggests that social responsibility is challenging to measure reliably and that users of these ratings should be cautious in drawing conclusions about firms based on this data. We encourage the rating agencies to regularly validate their data in an effort to improve the measurement of CSR . Copyright © 2015 John Wiley & Sons, Ltd.
This essay expresses some of the author's concerns regarding the ethos and direction of the "new institutionalism." While recognizing the latter's valuable insights and perspectives, he questions the wisdom of drawing a sharp line between the "old" and the "new," especially because doing so inhibits the contribution of institutional theory to major issues of bureaucracy and social policy.
We advance a multilevel argument that challenges and qualifies existing explanations of firms' responses to institutional pressures. In an in-depth study of 17 multinational corporations involving 359 interviews with internal and external actors, we find that firms facing identical pressures decouple policy from practice in different ways and for different reasons. When firms' responses are generated locally, without firmwide coordination, these responses can be either intentional or emergent. In the presence of information asymmetry between firms and their stakeholders, we find that managers' responses are intentional ("faking it") and depend on how they perceive their interests. In the presence of competing stakeholder expectations, responses are emergent ("muddling through") and depend on the degree of consensus among managers in their readings of the environment. These findings suggest that theories of decoupling need to be broadened to include the role of "muddling through" and the interplay of internal managerial and external stakeholder dynamics.
Why do employees engage in innovative behavior at their workplaces? We examine how employees' innovative behavior is explained by expectations for such behavior to affect job performance (expected positive performance outcomes) and image inside their organizations (expected image risks and expected image gains). We found significant effects of all three outcome expectations on innovative behavior. These outcome expectations, as intermediate psychological processes, were shaped by contextual and individual difference factors, including perceived organization support for innovation, supervisor relationship quality, job requirement for innovativeness, employee reputation as innovative, and individual dissatisfaction with the status quo.
The institutional environment is complex. This complexity is characterized by forces that ebb and flow in wavelike patterns as societal expectations evolve, with attention coalescing around specific events and then dissipating. Some of these critical events are broad and affect many firms, whereas others are narrow and affect individual firms. In either case, when they occur, these events elevate organizational susceptibility to societal demands but encourage different kinds of behavior in response. This study seeks to model this complexity in an area of growing interest for organization scholars-business ethics. In particular, I examine how firms respond to shifting societal pressures for greater ethical behavior by adopting and implementing the Ethics and Compliance Officer position, from 1990 to 2008. Results demonstrate that although firms decide when to adopt in response to broad fieldwide critical events, it is narrower firm-specific critical events that determine resource commitments in implementation.
This paper examines how multinational corporations (MNCs) selectively assign supervisory responsibilities to units in countries with varying levels of institutional quality. Arbitraging across institutional contexts is an important function of MNCs, but it also creates coordination challenges. The choice of organization structure, such as the differential assignment of supervisory responsibilities, is an important tool for managing these coordination challenges. Using data on the business activities and supervision relationships within U.S. multinational manufacturers in 1996-2008, I find that frontline subsidiaries in countries with weaker institutions are more likely to be supervised by foreign rather than domestic supervisory units. Foreign supervision is even more likely when subsidiaries in weak-institution countries conduct activities that are more central to or interdependent with their parents' global operations. These findings confirm that MNCs use differential supervision to enhance global coordination. The paper highlights one of the most unique features of MNCs: a multinational hierarchy that resides within a firm's boundary but across national borders. It also connects MNCs' hierarchical structure with institutional imperfections that give rise to the emergence of the firm in the first place.
The nature of global business today increases the complexity of multinational companies and highlights the challenges of managing headquarters–subsidiary (HQ–Sub) relationships. We identify key unresolved issues in HQ–Sub relations including closing the gap between headquarters’ expectations and subsidiary performance, managing the nested hierarchical relationships across multiple organizational layers, and aligning these relationships across diverse subunits embedded in different social contexts. We propose that agency theory, particularly its more recent progressions, can advance our understanding of these issues and we offer a perspective to guide such research. We discuss several research implications of the static bilateral, static multilateral, dynamic, and social and contextual streams of agency theory.
Using a field survey of 461 self-managing work team members in four countries, we examined: (1) whether employee resistance to such teams mediated the relationships between employee cultural values and job attitudes and (2) whether the value-resistance relationships were stronger in some countries than in others. Results show that resistance mediated the cultural value-job attitude relationships, sometimes fully and sometimes partially, depending on which type of resistance (to teams or to self-management) and which type of cultural value was being examined. Theoretical and practical implications are discussed.
This study analyzes the determinants of global standardization of multinational companies' environmental policies. Survey data from the chemical industry show that MNCs standardize different environmental policy dimensions in response to pressures from different external stakeholders. MNC characteristics also affect environmental policy standardization. Findings demonstrate that the nature of stakeholder demands affects firms' responses to stakeholder pressures. Because environmental policy standardization reduces MNCs' ability to exploit cross-country differences in environmental regulations, these findings also have important implications for the self-regulation of MNCs' environmental conduct.
The control and coordination of a network of geographically and culturally dispersed subsidiaries is one of the most prominent challenges in international management. However, many empirical findings on the effectiveness of various control mechanisms and combinations thereof are still counterintuitive. This study uses longitudinal case studies and cross-sectional interview data to extend control theory by examining why, how, and in what sequence large multinational firms MNCs implement controls in their networks of foreign subsidiaries. Our analysis draws from literature on institutional theory, embeddedness, and organizational power to demonstrate that MNC headquarters need to overcome institutional duality when implementing their controls abroad. We find that headquarters do so by using social controls, primarily as a way of legitimizing and institutionalizing their process and output controls that are implemented subsequently.
Prior research on sustainability in business often assumes that decisions on social and environmental investments are made for instrumental reasons, which points to causal relationships between corporate financial performance and corporate social and environmental commitment. In other words, social or environmental commitment should predict higher financial performance. The theoretical premise of sustainability, however, is based on a systems perspective, which implies a tighter integration between corporate financial performance and corporate commitment to social and environmental issues. In this paper, we describe the important theoretical differences between an instrumental and integrative logic in managing business sustainability. We test the presence of each logic using data from 738 firms over 13 years and find evidence of integrative logic applied in business.
This study focuses on how and why firms strategically respond to government signals regarding appropriate corporate activity. We integrate institutional theory and research on corporate political strategy to develop a political dependence model that explains (a) how different types of dependency on the government lead firms to issue corporate social responsibility (CSR) reports and (b) how the risk of governmental monitoring affects the extent to which CSR reports are symbolic or substantive. First, we examine how firm characteristics reflecting dependence on the government — including private versus state ownership, executives serving on political councils, political legacy, and financial resources — affect the likelihood of firms issuing CSR reports. Second, we focus on the symbolic nature of CSR reporting and how variance in the risk of government monitoring through channels such as bureaucratic embeddedness and local government institutional development influences the extent to which CSR communications are symbolically decoupled from substantive CSR activities. Our database includes all CSR reports issued by the approximately 1,600 publicly listed Chinese firms between 2006 and 2009. Our hypotheses are generally supported. The political perspective we develop contributes to organizational theory by showing (a) the importance of government signaling as a mechanism of political influence, (b) how different types of dependency on the government expose firms to different types of legitimacy pressures, and (c) that firms face a decoupling risk which leads them to be more likely to enact substantive actions in situations where they are likely to be monitored.
Argues that the formal structure of many organizations in post-industrial society dramatically reflect the myths of their institutional environment instead of the demands of their work activities. The authors review prevailing theories of the origins of formal structures and the main problem which those theories confront -- namely, that their assumption that successful coordination and control of activity are responsible for the rise of modern formal organization is not substantiated by empirical evidence. Rather, there is a great gap between the formal structure and the informal practices that govern actual work activities. The authors present an alternative source for formal structures by suggesting that myths embedded in the institutional environment help to explain the adoption of formal structures. Earlier sources understood bureaucratization as emanating from the rationalization of the workplace. Nevertheless, the observation that some formal practices are not followed in favor of other unofficial ones indicates that not all formal structures advance efficiency as a rationalized system would require. Therefore another source of legitimacy is required. This is found in conforming the organization's structure to that of the powerful myths that institutionalized products, services, techniques, policies, and programs become. (CAR)
We conducted a qualitative study of the motivations and contextual factors that induce corporate ecological responsiveness. Analytic induction applied to data collected from 53 firms in the United Kingdom and Japan revealed three motivations: competitiveness, legitimation, and ecological responsibility. These motivations were influenced by three contextual conditions: field cohesion, issue salience, and individual concern. In this article, we also identify the conditions that likely lead to high corporate ecological responsiveness.
In this research, we traced the development of natural environmental issues in two organizations in real time over the period of a year. Participant observations, discussions with organizational members, and corporate documents yielded insights used to develop a model describing issue flows in both organizations. With this model, we identified the factors that influenced the scope, scale, and speed of organizational response to issues. Our methods provided insights into why issues generated organizational responses and also why they did not.
Two factors appeared to be critical in explaining organizational responses to issues: individual concerns and organizational values. Individual concerns gave rise to an issue champion or seller. An issue consistent with organizational values was perceived as strategic. These were necessary conditions; without either condition, the issue would not be resolved. It is argued further that individual discretion and excess resource slack will moderate the relationship between these direct effects and the scope, scale, and speed of organizational response. The framework that emerged from the data is conveyed through a set of four propositions.
This paper presents an intraorganizational ecological perspective on strategy making and examines how internal selection may combine with external selection to explain organizational change and survival. The perspective serves to illuminate data from a field study of the evolution of Intel Corporation's corporate strategy. The data, in turn, are used to refine and deepen the conceptual framework. Relationships between induced and autonomous strategic processes and four modes of organizational adaptation are discussed. Apparent paradoxes associated with structural inertia and strategic reorientation arguments are elucidated and several new propositions derived. The paper proposes that consistently successful organizations are characterized by top managements who spend efforts on building the induced and autonomous strategic processes as well as concerning themselves with the content of strategy; that such organizations simultaneously exercise induced and autonomous processes; and that successful reorientations in organizations are likely to have been preceded by internal experimentation and selection processes effected through the autonomous process.
Based on an intensive and inductive study of a Fortune 100 corporation, this article describes how dynamic capabilities that reconfigure division resources - that is, architectural innovation - may operate within multibusiness firms. We suggest envisaging corporate divisions as combinations of capabilities and product - market areas of responsibility (charters) that may be recombined in various ways, highlighting the interplay of economic and social imperatives that motivate such recombinations. We detail the microsociological patterns by which such recombinations occur and then theorize about an organizational form, termed "dynamic community," in which these processes are embedded.
Companies are increasingly asked to provide innovative solutions to deep-seated problems of human misery, even as economic theory instructs managers to focus on maximizing their shareholders' wealth. In this paper, we assess how organization theory and empirical research have thus far responded to this tension over corporate involvement in wider social life. Organizational scholarship has typically sought to reconcile corporate social initiatives with seemingly inhospitable economic logic. Depicting the hold that economics has had on how the relationship between the firm and society is conceived, we examine the consequences for organizational research and theory by appraising both the 30-year quest for an empirical relationship between a corporation's social initiatives and its financial performance, as well as the development of stakeholder theory. We propose an alternative approach, embracing the tension between economic and broader social objectives as a starting point for systematic organizational inquiry. Adopting a pragmatic stance, we introduce a series of research questions whose answers will reveal the descriptive and normative dimensions of organizational responses to misery.
A common strategy used by professions to support claims of workplace jurisdiction involves the institutionalization of professionally-endorsed formal structures, yet both theory and research suggest that ensuring the implementation of institutionalized structures after formal adoption can be problematic. This study investigates the influence of organizational characteristics on the implementation of one professionally-created institution in higher education organizations, tenure systems for faculty employment. Our results suggest that implementation of tenure systems is negatively affected by internal resource pressures, but positively affected by countervailing pressures from professionally-linked constituents. The results also suggest self-limiting aspects of the use of tenure systems.
We examine the adoption of an organizational practice by subsidiaries of a multinational corporation (MNC) under conditions of "institutional duality." Drawing on institutional theory, we identify two factors influencing the adoption of a practice: the institutional profile of the host country and the relational context within the MNC. We also specify conditions leading to "ceremonial adoption." General support is found for the model based on data from 534 managers and 3,238 nonmanagerial employees in 104 subsidiary locations from ten countries.
This paper was motivated by the growing interest of scholars of multinational corporations (MNCs) in the institutional perspective. Our review of the literature suggests that international management applications of this perspective have been dominated by a narrow set of neoinstitutional ideas. We develop a set of provocations that challenge the validity of traditional neoinstitutionalism in the context of MNCs. We then offer ideas for more novel theory building in the study of MNCs, based on integrating "old" and "new" institutionalism.
In this study, we investigated factors that influence the attitudes of line managers towards HRM. Using a sample of the general managers of 123 subsidiaries, we tested whether the general manager's level of HRM internalisation – the extent to which he or she values and is committed to the subsidiary's HRM practices – is influenced by two sets of factors: the professional experience of the subsidiary HR manager and the external networking activities and perceived strategic HRM capabilities of the subsidiary HR department. The findings supported the hypotheses relating to the professional experience of the subsidiary HR manager. Furthermore, an inverted U-shaped relationship was found between the tenure of the HR manager in his or her current position and the HRM internalisation of the general manager. The level of perceived strategic HRM capabilities of the subsidiary HR department was also shown to have a positive influence.
This study operationalizes corporate sustainable development and examines its organizational determinants. Data for this project pertain to Canadian firms in the oil and gas, mining, and forestry industries from 1986 to 1995. I find that both resource-based and institutional factors influence corporate sustainable development. By exploring time-related effects, I also find that media pressures were important in early periods and resource-based opportunities endured over time. This finding challenges the assumption that firms first adopt innovations in response to technical rewards which are later institutionalized. These counter-intuitive results may be attributable to the unique characteristics of the dependent variable, corporate sustainable development. They raise important questions and directions for future research. Copyright © 2004 John Wiley & Sons, Ltd.