Gaining legitimacy through hiring local workforce at a premium: The case of MNEs in the United Arab Emirates

The legitimacy of subsidiary issue selling: Balancing positive & negative attention from corporate headquarters

“…Subsidiaries can foster external legitimacy in the local context by establishing relationships with central actors such as government officials, media, trade unions, non-governmental organisations (NGOs), suppliers and customers (Baum & Oliver, 1991;Becker-Ritterspach & Dorrenbacher, 2011;Hillman & Wan, 2005;Tregaskis, 2003). However, the way subsidiaries design their issue selling at CHQ in clarifying the value of the subsidiary's connections with host country institutions or partners is poorly understood (Forstenlechner & Mellahi, 2011;Geppert & Dorrenbacher, 2014). Third party descriptions of issues may be viewed as more legitimate than first person accounts for example (Inman et al, 2004).…”

Performance management practices within emerging market multinational enterprises: the case of Brazilian multinationals

“…For example, a significant body of literature challenges the universal applicability of 'best practice' PM policies and emphasises the role of national culture and institutions in driving localisation of such practices (Aycan, 2005;Cascio, 2006;Varma, Budhwar, & DeNisi, 2008). Institutional theory research advocates that firms need to conform to the social norms in a given business environment because they cannot survive without a certain level of external social approval (legitimacy) (DiMaggio & Powell, 1983;Meyer & Rowan, 1977;North & Thomas, 1973 (Suchman, 1995, p. 574) -in the host country is one of the main drivers for adapting practices to host country institutions (Jensen & Szulanski, 2004;Kostova, 1999;Kostova & Zaheer, 1999), and that managers and employees at subsidiary level are more likely to accept and internalise HQ's PM policies if they judge them to be legitimate (Forstenlechner & Mellahi, 2011). Fletcher and Perry (2001), for instance, warned that Western PM policies such as linking rewards to individual performance would be 'unsafe' in economies in transition.…”

Human capital and strategic persistence: An examination of underperforming workers in two emerging economies

“…By cultivating personal and workplace ties with powerful political actors, such workers are able to influence or curtail the consequence of their actions when dealing with underperformance (Forstenlechner & Mellahi, 2011).…”

“…Another interesting line of research rooted in legitimacy literature (Baum & Oliver, 1991;Suchman, 1995) has uncovered that firms may persist with underperforming employees or even hire local workers at a premium as a mere attempt to gain legitimacy in the local market (Forstenlechner & Mellahi, 2011;Sidani & Al Ariss, 2014). Such hiring of local workers enables multinationals to appear "local" and in attuned with local traditions and culture.…”

“…Such hiring of local workers enables multinationals to appear "local" and in attuned with local traditions and culture. Forstenlechner and Mellahi (2011) uncovered that multinationals in sectors where the employment level of nationals is low, hiring or persisting with local workers equipped multinationals to be able to extract concessions from the national government. As Baum and Oliver (1991: 187) pointed out so eloquently, "External legitimacy elevates the organisation's status in the community, facilitates resource acquisition, and deflects questions about an organisation's rights and competence to provide specific products or services."…”