Different Forms of Agency and Institutional Influences within Multinational Enterprises

Abstract

Given their exposure to diverse institutional settings, decision making in multinational enterprises (MNE) is marked by inconsistencies and conflict. Within the comparative institutional analysis (CIA) literature, such inconsistencies are seen as a source of experimentation or innovation. By contrast, in the international business (IB) literature, institutions are primarily understood as constraints on MNE activity. The latter focuses on 'institutional effects' taking institutions as stable and determining of social agency, and says very little about how institutions shape capabilities of organizations to pursue a variety of strategies or change in diverse institutional settings. As a way of addressing this limitation, we aim to understand the conditions that enable actors to engage in strategic action despite institutional pressures towards statis. We demonstrate, through comparative case studies of two large MNEs, headquartered in Germany and the UK, that agency within MNEs is influenced by a fit between MNE coordination structures shaped by home country institutions and host country institutions' demands for flexibility or collaboration. Institutional incompatibilities between home and host contexts are unlikely to trigger actors' reflective capacity to change if the actors cannot draw on supportive coordination structures in the MNE.

Unpacking the Institutional Complexity in Adoption of CSR Practices in Multinational Enterprises

“…This last point adds to the conversation in organizational institutionalism on ‘constraining' and ‘enabling' institutional effects in complex organizational fields (Saka‐Helmhout and Geppert, ). Much of institutional research in MNEs focuses on the constraining effects of institutions (Saka‐Helmhout and Geppert, ), viewing institutions as ‘rules of the game' that impose transaction costs that constrain actors' behaviour (North, ). While we show that strength of CSR‐related institutions affects CSR adoption decisions, we also show that institutional heterogeneity requires that MNEs re‐evaluate and prioritize the different pressures to which they are exposed, thus exerting institutional agency (Oliver, ).…”

International business responses to institutional voids

“…It is argued that such institutional pluralism provides room for discretionary action (Kraatz & Block, 2008). In other words, institutional voids are understood as 'opportunity spaces' for agency (Mair & Martí, 2009;Saka-Helmhout & Geppert, 2011;McKague, Zietsma, & Oliver, 2015;Venkataraman et al, 2016). Given that organization-specific advantages evolve through actively innovating around institutions (Cantwell et al, 2010), rather than through passive countering measures, there is a significant opportunity for IB scholarship to investigate ways in which institutional voids enable market and nonmarket actors to shape and transpose institutions in the pursuit of competitive advantage.…”

Conflictual Practice Sharing in the MNC: A Theory of Practice Approach

“…First, most prior IB research has focused on the variable outcomes of cross-border transfers, as determined by macro-and meso-level determinants, in terms of national institutional/cultural and organizational characteristics (Saka-Helmhout & Geppert, 2011), often using the subsidiary as the level of analysis. Indeed, this has been a dominant strategy for theorizing about cross-border phenomena within MNCs.…”

“…Further, we demonstrate how a practice lens holds opportunities for advancing research on dimensions of such processes that have remained comparatively under-researched. By often building on institutional theory, practice transfer research has carved a research niche into the macro-and meso-level determinants of practice transfer results in terms of institutional and organizational characteristics (see Blazejewski, 2006;Geppert & Matten, 2006;Kostova & Roth, 2002;Saka-Helmhout & Geppert, 2011). A relatively under-elucidated dynamic therefore comprises intra-unit politics and conflicts over the configuration of HQ-mandated management practices (Dörrenbächer & Geppert, 2006;Saka, 2004;Sharpe, 2006).…”