Clearly, this is just a beginning, for much more conceptual work is needed on exploring important issues that we have not addressed issues here. Density, competition, and legitimation. University of South Carolina Press. The greater the institutional distance between the home country of an MNE and a particular host country, the greater the challenge an MNE subunit will face in establishing and maintaining its legitimacy in that host country.
International business and governments: The host country legitimating environment typically has less information with which to judge an MNE entrant. The extent of the challenge faced by an MNE or an MNE subunit in establishing and maintaining its legitimacy will be negatively positively related to the legitimacy In this article we have focused on MNEs because they provide a unique context in which to extend existing theories of organizational legitimacy, as well as to develop elements of a theory of MNE legitimacy.
However, it might be more difficult for uch MNEs and MNE subunits to maintain their legitimacy, because they will be more susceptible to problems caused by spillovers of illegitimacy from any of the other MNE subunits.
The greater the institutional distance, the more difficult it will be for the MNE to understand the host environment and its legitimacy requirements. For example, if a regulation in California is different from a regulation in Minnesota and a conflict occurs as a result of this, there probably exists an institutional mechanism at the federal level that will reconcile the differences.
There can be positive spillovers, which contribute to legitimacy, and negative spillovers, which hurt legitimacy.
Internal spillovers reflect the interdependence in legitimacy across subunits within an organization. The multinational corporation as an interorganizational network.
This subsidiary has taken pains to communicate to the American public-through corporate advertising-its espousal and support of uintessentially American causes. Finally, the case of the MNE reveals the social and cognitive nature of the legitimation process and its bounded rationality.
We develop formal propositions on the relationship between complexity in these factors and the legitimacy challenges faced by MNEs and llustrate these propositions with examples from Cargill and other firms.
American Journal of Related posts: First, MNEs operate in multiple institutional environments with varying regulatory, cognitive, and normative standards. The adoption of such globally acceptable policies will also ensure internal consistency.
Values, for instance, may drive cognitive categorization and, in turn, influence and be influenced by regulation. Traditionally, researchers have examined legitimacy at two levels: How MNCs cope with host overnment intervention.
External spillovers reflect interdependence in legitimacy between organizations belonging to the same classes, such as those from the same home country or industry.Organizational legitimacy under conditions of complexity: The case of the multinational enterprise.
Academy of Management Review, 24, Google Scholar: Kotha, S., & Nair, A. (). Strategy and environment as determinants of performance: Evidence from the Japanese machine tool industry. Strategic Management Journal, 16, We examine organizational legitimacy in the context of the multinational enterprise (MNE).
After discussing three types of complexity (of the legitimating environment, the organization, and the process of legitimation) that MNEs typically face, we explore their effects on MNE legitimacy.
In particular, we distinguish between the legitimacy of the MNE as a whole and that of its parts, and we. organizational structures (Ehrmann, Rost, and Inauen, ).
Finally, the fact that some Catholic Religious Orders and their monasteries survived up to date while others died out allows studying organizational legitimacy. In organizational theory a number of definitions of legitimacy, with varying degrees of specificity, have been suggested.
Essays & Papers Organizational Legitimacy Under Conditions of Complexity: the Case of the Multinational Enterpris - Paper Example Organizational Legitimacy Under Conditions of Complexity: the Case of the Multinational Enterpris.
T1 - Organizational legitimacy under conditions of complexity. T2 - Academy of Management Review. AU - Kostova,Tatiana. AU - Zaheer,Srilata.
PY - /1/1. Y1 - /1/1. N2 - We examine organizational legitimacy in the context of the multinational enterprise (MNE). Title: Organizational Legitimacy under Conditions of Complexity: The Case of the Multinational Enterprise Created Date: Z.Download