Entrenchment in status positions and the adoption of new norm-deviant organizational practices: Evidence from the Japanese banking industry, 1983–2005

Abstract

We examine the effect of status entrenchment on the adoption of new norm-deviant organizational practices. Identifying organizational age and status mobility as factors affecting entrenchment, we extend the middle-status conformity theory by explicating how entrenchment moderates the relationship between status and adoption. Using original data from the Japanese loan syndication market, we show that young and new-in-status banks have a lower propensity to follow status-based adoption behavior than actors entrenched in the same status positions. We discuss implication of these results for the understanding of new practice adoption and organizational status effects.

The foreignness effect on internationalisation depth: the perspective of multicomplexity and the duality of foreignness

“…Zaheer (1995) argues that the LOF is driven by spatial distance and a lack of roots in a local environment. A unifying theme within these studies is understood from the angle of host countries and results in the attributes of dissimilarity (Edman, 2009), outside status (Kostova and Zaheer, 1999), lack of fit and newness (Sethi and Guisinger, 2002).…”

“…Moreover, from the theory of the MNE-subsidiary relationship, another mechanism, "dual embeddedness of MNEs", stems from the requirement of MNEs and local institutional environments (Kostova and Zaheer, 1999). Edman (2009) also explores the mechanism of foreignness from the perspective of internal and external MNE traits that result from being foreign and that relate to MNE actions. A further mechanism considers the dynamics of foreignness.…”

“…In this section, we discuss the theoretical tenets of LOF and AOFindustrial organisation (IO), institutional theory, RBV of the firm and network theoryto identify commonalities between them that enable us to propose such a framework. We structure our literature review around the "antecedent-mechanism- Foreign firms are treated differently from national firms because of their foreignness Hymer (1960Hymer ( , 1976, Zaheer (1995), Qian et al (2013), Kostova and Zaheer (1999) The firm-specific advantages of MNEs make foreign firms different from local firms Nachum (2003Nachum ( , 2011, Sofka (2006), Miller and Parkhe (2002), Edman (2009) Identifying LOF LOF is derived from institutional distance in cognitive, normative, and regulatory domains between home and host countries Kostova and Zaheer (1999), Zaheer and Mosakowski (1997), Miller and Parkhe (2002) LOF occurs because of the relative familiarity with and experience in the home country and the home region vis-a-vis other host markets Rugman and Verbeke (2007), Nachum (2003Nachum ( , 2011, Sofka (2006), Edman (2009) Empirical test…”

“…There are regulatory, cognitive and normative mechanisms (DiMaggio and Powell, 1983) that exert pressures leading to local isomorphism. The coercive pressures are brought on by law, regulations and policies; cognition institutionalisation is manifested by the mimicry of decent role models; and normative effects emanate from the professionalisation of industry (Edman, 2009).…”

“…Zaheer (1995) argues that the LOF is driven by spatial distance and a lack of roots in the local environment. A unifying theme within this body of work is the perceived dissimilarity (Edman, 2009), lack of fit and newness (Sethi and Guisinger, 2002) between the home and host countries. LOF has been a fundamental assumption driving the attributes of foreignness, and most of the conceptual and empirical attention has been directed towards how MNEs deal with LOF in host countries (Qian et al, 2013).…”