Tatiana Kostova

Organizational Legitimacy Under Conditions of Complexity: The Case of the Multinational Enterprise

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 develop propositions that include issues of internal versus external legitimacy and positive and negative legitimacy spillovers.

Adoption of an Organizational Practice by Subsidiaries of Multinational Corporations: Institutional and Relational Effects

We examine the adoption of an organizational practice by subsidiaries of a multinational corporation (MNC) under conditions of “institutional duality.” Drawing on institutional theory, we identify ...

Institutional Theory in the Study of Multinational Corporations: A Critique and New Directions

This paper was motivated by the growing interest of scholars of multinational corporations (MNCs) in the institutional perspective. Our review of the literature suggests that international management applications of this perspective have been dominated by a narrow set of neoinstitutional ideas. We develop a set of provocations that challenge the validity of traditional neoinstitutionalism in the context of MNCs. We then offer ideas for more novel theory building in the study of MNCs, based on integrating “old” and “new” institutionalism.

The state of psychological ownership: Integrating and extending a century of research.

People develop feelings of ownership for a variety of objects, material and immaterial in nature. We refer to this state as psychological ownership. Building on and extending previous scholarship, the authors offer a conceptual examination of this construct. After defining psychological ownership, they address “why” it exists and “how” it comes into being. They propose that this state finds its roots in a set of intraindividual motives (efficacy and effectance, self-identity, and having a place to dwell). In addition, they discuss the experiences that give rise to psychological ownership and propose several positive and negative consequences of this state. The authors’ work provides a foundation for the development of a comprehensive theory of psychological ownership and the conceptual underpinnings for empirical testing.

Collectivism, propensity to trust and self-esteem as predictors of organizational citizenship in a non-work setting

This study examined organizational citizenship of residents in a housing cooperative setting where roles were not influenced by traditional employee–employer work relationships. Results demonstrate that the individual differences of collectivism and propensity to trust predicted organizational citizenship (assessed six months later). In addition, organizational-based self-esteem fully mediated the effects of collectivism and propensity to trust on organizational citizenship, and tenure moderated the trust—self-esteem relationship. We discuss the implications of these results given the changing nature of work and the increasing importance of non-work organizations. Copyright

The Use of the Multinational Corporation as a Research Context

The multinational corporation (MNC) has been increasingly used as a context for conceptual and empirical work. Based on a review of several leading management journals, we identify three main purposes for which the MNC has been employed: (1) study of MNC-specific phenomena; (2) validation and expansion of existing theories; and (3) development of new theories. We suggest that the latter purpose represents the highest potential contribution of MNC research, yet it is the least utilized so far. We then offer ideas of how to increase the contribution of MNC research through capturing the conceptual distinctiveness of the context, examining the theoretical paradoxes inherent in these organizations, and theorizing about novel combinative phenomena emerging in this context.

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

Multinational enterprises (MNEs) operate in complex transnational organizational fields with multiple, diverse, and possibly conflicting institutional forces. This paper examines how such complex environments affect a firms adoption of Corporate Social Responsibility (CSR) practices. To capture the effect of transnational fields, we consider the institutional influences of all country environments to which the firm is linked through its portfolio of operations and propose that these effects will be weighted depending on their relative salience. We identify a set of factors that make certain pressures more salient than others, including firms economic dependence on a particular country, heterogeneity of institutional forces within the firms transnational field, exposure to leading countries with more stringent CSR templates, and intensity and commitment to particular economic linkages (i.e., foreign direct investment versus international trade). Our hypotheses are tested and supported in a study of 710 US MNEs from 2007 to 2011 with global ties to over 100 countries.

Understanding Agency Problems in Headquarters-Subsidiary Relationships in Multinational Corporations A Contextualized Model

This paper proposes an agency model for headquarters-subsidiary relationships in multinational organizations with headquarters as the principal and the subsidiary as the agent. As a departure from classical agency theory, our model is developed for the unit level of analysis and considers two root causes of the agency problem—self-interest and bounded rationality. We argue that in the organizational setting, one cannot assume absolute self-interest and perfect rationality of agents (subsidiaries) but should allow them to vary. We explain subsidiary-level variation through a set of internal organizational and external social conditions in which the headquarters-subsidiary agency dyad is embedded. We then discuss several agency scenarios reflecting various levels of self-interest and rationality that lead to different manifestations of the agency problem. The proposed framework can inform more relevant applications of the agency perspective in organizational studies and motivate future research.

Cultural Distance and Firm Internationalization: A Meta-Analytical Review and Theoretical Implications:

This paper presents the most comprehensive review and meta-analysis of the literature on cultural distance and firm internationalization to date. We analyze the effects of cultural distance on key strategic decisions throughout the entire process of internationalization. For the preinvestment stage, we examine the decisions on where to invest (location choice), how much to invest (degree of ownership), and how to organize the foreign expansion (entry and establishment mode). For the postinvestment stage, we examine the decisions of how to integrate the foreign subsidiary into the organization (transfer of practices) as well as the performance effects of cultural distance at both the subsidiary and the firm level. We find that firms are less likely to expand to culturally distant locations but if they do, they prefer greenfield investments and integrate subsidiaries more through transfer of management practices. Cultural distance does not seem to affect how much capital firms invest and whether they enter through a joint venture or full ownership. Interestingly, cultural distance has a strong negative effect on subsidiary performance but no effect on the performance of the whole multinational company. In addition, we find that the effects of cultural distance are not sensitive to time, but they are sensitive to the cultural framework used (e.g., Hofstede vs. Global Leadership and Organizational Behavior Effectiveness) and the home country of the company (developed vs. emerging market). Based on our study, we feel confident to offer some theoretical insights, recommendations for improving the validity and reliability of cultural-distance research, and ideas for future research.

Expanding international business research on foreignness

Purpose – The purpose of this paper is to present our viewpoint on the research on foreignness and provide directions for future studies. We suggest that research on foreignness can be expanded by exploring its complexity. Design/methodology/approach – This article takes the form of a viewpoint. Findings – We identify three facets of foreignness – foreignness effect (liabilities or assets) foreignness level (organizational or individual) and foreignness locus (external or internal to an entity), which have not been sufficiently examined in prior research. Originality/value – We discuss how these aspects can inform a novel research agenda in this area.