The article argues that institutionalist theory applied to multinationals focuses on the issue of ‘institutional duality’, that is, that within multinationals, actors are pressured to conform to the expectations of their home context whilst also being subjected to the transfer of practices from the home context of the MNC itself. This institutional duality leads to conflicts that can be labelled as forms of ‘micro-politics’. The head office managers transfer practices, people and resources to subsidiaries in order to maintain control and achieve their objectives. Local subsidiaries have differential capacities to resist these transfers or to develop them in their own interests depending on their institutional context. The article distinguishes institutional contexts that produce ‘Boy Scout’ subsidiaries, doing what they are told and consequently allowing locally distinctive capabilities to be undermined and those that produce ‘subversive strategists’ which look to deepen their connection with the local context not the MNC itself. These processes are exacerbated by the demands of capital markets which impose performance requirements on MNCs and lead to continuous organizational restructuring. Head offices become stronger in their attempts to impose standards in all their subsidiaries. The consequences of these processes are that except for a few pockets of ‘subversive strategists’, multinationals produce subsidiary ‘clones’ with little ability to leverage the specific assets which the institutional context provides. As it is the subversive strategists that are best placed to be innovative, the problem for the MNC is how to manage this tension.
Institutionalist theory has shown how work and employment relations are shaped by national contexts. Recent developments in these theories have been increasingly concerned with the issue of institutional change. This reflects a shift in the nature of the competitive environment of firms from the stable and planned and predominantly national models of economic organization supported by the Keynesian state, which dominated in the 30 years after 1945, to the uncertain and high‐risk environment of the current period in which globalization has opened up the possibility of new forms of firms and institutions. In this paper, we emphasize that in the current context of globalization, firms and actors within firms are continuously developing the way in which they organize work and employment to produce goods and services that are competitive in global markets. The paper argues that new market conditions lead firms to constant experimentation in work organization as they seek to position themselves within systems of production and innovation that are global in nature. This creates a pressure for institutional change to facilitate the process of firm‐level experimentation; it also tends to create a pressure for new experimental forms of institutions that are themselves searching for ways to improve their relevance. This change calls for extending the study of industrial relations and employment systems in the current era to investigate how new dynamic complementarities among employees, managers, institutions, and markets are created (or not) and what the effects of these processes are on: employment growth, income inequalities, inequalities between groups, rights at work, and the distribution of skills and autonomy in the workplace. The paper therefore proposes a framework and conceptual language for identifying forms of institutional change in the current period. These developments are illustrated through an analysis of the way in which actors in the Danish context have responded to the challenges of the last few decades. It is the capacity of actors within firms to use and develop institutions in ways that enable them to restructure work and employment and gain a more effective position in the market that is crucial to institutional change. However, these micro‐level processes may be unseen and unappreciated by actors at the macro level such as political parties, employers’ associations, and unions, who are generally perceived as being most influential in processes of redesigning institutions and complementarities at societal levels. This creates a tension between micro and macro changes that we examine in the Danish case, arguing that it is possible to reconcile this dilemma under certain circumstances. The final section suggests that while Denmark is distinctive in terms of how these processes of experimentalism relate to firms and institutions, similar issues can be seen at work in other national contexts where the results are very different. This suggests the need for a comparative study of institutions, work, and emp...
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As production and design disintegrate and become more collaborative, involving dynamic relations between customers and firms supplying complex subsystems and service, products and production methods become more innovative but also more hazardous. The inadvertent co-production of latent hazards by independent firms is forcing firms and regulators to address the problem of uncertaintythe inability to anticipate, much less assign a probability to future states of the worldmore directly than before. Under uncertainty, neither the regulator nor the regulated firms know what needs to be done. The regulator must induce firms to systematically canvas their practices and identify potential hazards. But recognizing the fallibility of all such efforts, the regulator must further foster the institutionalization of incident or event reporting procedures: systems to register failures in products or production processes that could be precursors to catastrophe; to trace out and correct their root causes; to alert others in similar situations to the potential hazard; and to make certain that countermeasures to ensure the safety of current operations are taken and the design requirements for the next generation of the implicated components or installations are updated accordingly. In this essay we develop these arguments and look closely at changes in the Norwegian offshore oil and gas industry and its regulator, the Petroleum Safety Authority to better understand the coevolution of vertically disintegrated industry and new forms of regulation.
This article discusses how institutional competitiveness and multinationals are mutually enriching concepts. Multinationals transfer capital, technology, and knowledge into new settings. They allow subsidiaries access to new markets, new resources, and new processes. Potentially, therefore, institutional competitiveness can be increased by the presence of multinational corporations (MNCs) and their subsidiaries. However, this depends on the type of multinational and the type of institutional context. By differentiating two types of MNC in terms of shortterm and long-term orientations to investment, and two types of host institutional setting in terms of strength of institutional complementarities and interconnectedness, we develop a typology of four types of interaction between MNCs and institutional settings. We then analyze how each type influences institutional competitiveness. We conclude that these outcomes, while structurally shaped, are still dependent on how actors (individuals, firms, collective organizations, and governments) strategize to develop institutional frameworks in the context of highly competitive global markets.
Though capitalism may be structured in divergent ways that produce highly different outcomes, and though the capitalist process needs new demands and technologies to realize its expansionary potential, these lessons seem to have been ignored in recent discussions of how to revitalize mature economies. This article illustrates a way of researching alternative economic futures by identifying chains of enablers in Denmark and other Nordic countries by which society and business can co-develop and capture capabilities to take on new roles in globalization. The paper focuses on institutional enablers that have made possible novel forms of work organization and business models. These institutional enablers are capacitating on the "supply side" by enabling labor to take an active part in shaping enterprises supported by social welfare services (training, childcare and eldercare, support for housing, etc.). Being generally inclusive of social movements, welfare states have also helped identify new needs on the "demand side" such as toys, aids, technologies, and buildings for childcare and eldercare, environmental protection, alternative energy and energy saving, health, and city planning. This is illustrated by a number of firms that supply products that solve societal problems, and that have used their capabilities to become multinationals that engage in active co-development with firms and institutions in foreign countries.
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