Politics and Power within Multinational Corporations: Mainstream Studies, Emerging Critical Approaches and Suggestions for Future Research

Abstract

Given the increased public interest in the use and misuse of power in multinationals in the aftermath of the financial crisis, it is notable that power relations in multinational corporations (MNCs) have not gained enhanced attention in the academic community. What is missing so far in the study of MNCs is a systematic examination of how power and politics within MNCs have been addressed in mainstream international business (IB) and sociological research studying the MNC. This paper starts by critically reviewing these two mainstream approaches in the study of MNCs as organizations and seeking to understand the shortcomings of former research. Next, it reviews new emergent critical perspectives, which the authors call socio‐political studies of MNCs, where power and politics are addressed not just more prominently, but also differently, from a more bottom‐up and actor‐centred perspective. After reviewing this emergent stream of research, the authors propose that future studies should take a more micro‐political perspective and focus in more detail on the micro‐foundations of power relations. In the concluding section, the authors show how future studies of MNCs can learn from both critical interactionist and discursive theories when analysing organizational politics and power relations. A framework is proposed for the study of micro‐level political game‐playing in MNCs, based on a three‐dimensional framework for organizational power (episodic, rules of the game and domination), and some key research questions for future studies are suggested.

Miners, politics and institutional caryatids: Accounting for the transfer of HRM practices in the Brazilian multinational enterprise

“…They may indeed be that, but we seek to impress, as have others in recent contributions informed by a similar perspective (e.g. Geppert & Dörrenbächer, 2014), that their shape ultimately arises from the relational interplay of various actors operating at different levels with diverse interests, ideologies and identities.…”

“…We are critical of such assumptions as they provide little purchase in capturing the complex and multi-layered nature of power dynamics in relations between an MNE's HQ and its subsidiaries. Moreover, such previous contributions have tended to see power as a repository of institutional and organizational structures (Geppert & Dörrenbächer, 2014). Our preference is to lay stress on the action of power and not just its structuring.…”

“…However, they do not propound necessarily that such 'best practices' are more efficient, à la more rationalistic approaches (i.e. the eclectic OLI paradigm of Dunning, 2000;Dunning & Lundan, 2008), but rather that their adoption helps to ensure an organization's legitimacy and thereby its future survival (Geppert & Dörrenbächer, 2014).…”

“…As such, this paper is positioned as a contribution to the growing stream of IB research on power and micro-politics in the MNE Ferner et al 2012;Geppert & Dörrenbächer, 2014). Hitherto, a great deal of the literature on the cross-national transfer of management practices has focused on the notion of 'institutional duality'; that is, the extent to which MNEs' practices are shaped both by the institutional terrain of the MNE itself and that of the host context in which it operates (Kostova, 1999;Kostova and Roth, 2002).…”

“…In particular, there is little consideration of the manner and the conditions under which MNEs use their power resources to marshal host country institutions to influence the transfer process, and, in turn, how subsidiary management and employees may also seek to recruit local institutional resources to resist or modify transfer (Almond, 2011;Ferner et al, 2012). Another influential literature that of comparative institutionalism places particular store on the influence of country-of-origin effects (Almond & Ferner 2006;Whitley, 2009), but it can be criticized for its static and over-socialized conceptualization of power and its failure to bring to life the dynamic political processes involving MNEs' managers and other stakeholders (Geppert & Dörrenbächer, 2014).…”