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MNC response to superstitious practice in Myanmar IJVs: Understanding contested legitimacy, formal–informal legitimacy thresholds, and institutional disguise

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Abstract

Superstition is a pervasive informal institution affecting the decision-making of organizational actors yet remains under-studied and ill-understood in international business research. We address this lacuna through examining how Western MNCs affect – and are affected by – the use of superstition among local subsidiary managers in an emerging Asian economy. Based on interviews, archival documents, and observation, our inductive investigation reveals a complex, changing, and surreptitious relationship between MNC practice and an informal institution which, while widely practiced, remains forbidden according to its formal institutional counterpart (Buddhism) and illegal according to Myanmar state law. Initial findings showed how MNCs endorsed, acquiesced, or rejected superstitious practice based on a configuration of construed reputational risk, corporate values adherence, degree of formal institution approval, and perceived local performance impact. Subsequent MNC engagement then shifted from accommodation to resistance to manipulation in response to local managers’ disguising their ‘superstitious’ practices as Buddhism, ‘blurring’ the formal–informal institution divide in the process to secure MNC public approval. Together, our findings serve to refine and deepen existing theory into how the MNC subunit can manage its legitimacy through balancing the incompatible demands of formal and informal constituents within a contested institutional dyad.

Résumé

La superstition est une institution informelle omniprésente qui affecte la prise de décision des acteurs organisationnels, mais reste sous-étudiée et mal comprise dans la recherche en international business. Nous comblons cette lacune en examinant comment les EMN occidentales affectent – et sont affectées par – l’utilisation de la superstition parmi les directeurs de filiales locales dans une économie asiatique émergente. Sur la base d’entretiens, de documents d’archives et d’observations, notre enquête inductive révèle une relation complexe, changeante et subreptice entre la pratique des EMN et une institution informelle qui, bien que largement pratiquée, reste interdite selon son homologue institutionnel formel (le bouddhisme) et illégale selon la loi de l’État du Myanmar. Les premiers résultats ont montré comment les EMN approuvaient, acceptaient ou rejetaient les pratiques superstitieuses sur la base d’une configuration de risque de réputation interprété, de respect des valeurs de l’entreprise, du degré d’approbation formelle des institutions et de l’impact perçu sur la performance locale. L’engagement ultérieur des EMN est alors passé de l’accommodement à la résistance et à la manipulation en réponse au fait que les managers locaux déguisaient leurs pratiques « superstitieuses » en bouddhisme, «brouillant» la division institutionnelle formelle-informelle dans le processus visant à obtenir l’approbation publique des EMN. Ensemble, nos résultats servent à affiner et à approfondir la théorie existante sur la façon dont la sous-unité EMN peut gérer sa légitimité en équilibrant les demandes incompatibles des constituants formels et informels au sein d’une dyade institutionnelle contestée.

Resumen

La superstición es una institución informal extendida que afecta a la toma de decisiones de los actores organizacionales, pero todavía sigue siendo poco estudiada y mal entendida en la investigación de negocios internacionales. Abordamos esta laguna examinando cómo las corporaciones multinacionales (MNC por sus iniciales en inglés) occidentales afectan -y se ven afectadas por- el uso de la superstición entre los gerentes de las filiales locales en una economía asiática emergente. Basados en entrevistas, documentos de archivo y observación, nuestra investigación inductiva revela una relación compleja, cambiante y furtiva entre la práctica de la multinacional y una institución informal que, si bien se practica ampliamente, sigue prohibida según su contraparte institucional formal (Budismo) e ilegal de acuerdo con la legislación estatal de Myanmar. Los hallazgos iniciales mostraron cómo las corporaciones multinacionales aprobaron, aceptaron o rechazaron la práctica supersticiosa basada en la configuración interpretada del riesgo reputacional, la adherencia a los valores corporativos, el grado de aprobación de la institución formal y impacto en el desempeño local percibido. El compromiso subsecuente de la multinacional cambió entonces de la adaptación a la resistencia a la manipulación en respuesta a que los gerentes locales disfrazaron sus prácticas “supersticiosas” como budismo, “desdibujando” la división formal–informal de la institución en el proceso para asegurar la aprobación pública de la corporación multinacional. Juntos, nuestros hallazgos sirven para refinar y profundizar la teoría existente en la forma en que la subunidad de una multinacional puede gestionar su legitimidad equilibrando las demandas incompatibles de los elementos formales e informales dentro de una díada institucional controvertida.

Resumo

Superstição é uma difundida instituição informal que afeta a tomada de decisão de atores organizacionais, mas permanece pouco estudada e mal compreendida na pesquisa de negócios internacionais. Abordamos essa lacuna examinando como multinacionais ocidentais afetam – e são afetadas – pelo uso da superstição entre gerentes de subsidiárias locais em uma economia asiática emergente. Com base em entrevistas, documentos de arquivo e observação, nossa investigação indutiva revela uma relação complexa, mutável e escondida entre a prática da MNC e uma instituição informal que, embora amplamente praticada, permanece proibida de acordo com sua contraparte institucional formal (Budismo) e ilegal de acordo com a lei do estado de Mianmar. Descobertas iniciais mostraram como MNCs endossaram, consentiram ou rejeitaram práticas supersticiosas com base em uma configuração de risco reputacional interpretado, adesão a valores corporativos, grau de aprovação de instituições formais, e impacto percebido no desempenho local. O envolvimento subsequente da MNC mudou de acomodação para resistência à manipulação em resposta aos gerentes locais disfarçando suas práticas “supersticiosas” como budismo, “obscurecendo” a divisão entre instituição formal e informal no processo para garantir a aprovação pública da MNC. Juntas, nossas descobertas servem para refinar e aprofundar a teoria existente sobre como a subunidade da MNC pode gerenciar sua legitimidade através do equilíbrio das demandas incompatíveis de constituintes formais e informais dentro de uma díade institucional contestada.

抽象

迷信是一个影响组织参与者决策的无所不在的非正式制度, 然而它在国际商务研究中仍然未被充分研究和理解。我们通过研究西方跨国公司(MNC)在一个新兴亚洲经济体中如何影响当地子公司管理人员对迷信的利用 – 以及被其影响 – 来填补这一空白。基于访谈、档案文件和观察, 我们的归纳调查揭示了MNC实践与一种非正式制度之间复杂的、变化的和诡密的关系, 虽然这种非正式制度被广泛采用, 但它根据所对应的正式制度(佛教)仍被禁止, 并依照缅甸国家法律仍属非法。初步调查结果显示, MNC如何基于声誉风险的解读、企业价值观的遵守、正式制度的认可度以及当地绩效的影响对迷信行为背书、默认或拒绝。MNC随后的参与则从适应转为抵制, 再到操纵, 以回应当地管理人员伪装成佛教的“迷信”行为和“模糊”在确保MNC公众认可过程中正式-非正式制度的划分。总之, 我们的发现有助于提炼和深化现有理论, 以解决MNC子部门如何能够通过在有争议的制度对偶内平衡正式和非正式成分的不相容要求来管理其合法性。

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ACKNOWLEDGEMENTS

We thank Jiatao Li for his invaluable editorial guidance and the three anonymous reviewers for their constructive, insightful feedback. We would also like to thank all our participants for giving so generously of their time and experience. Our special thanks go to Sayadaw Dr. Nandamalabhivamsa and Sayadaw Dr. Khammai Dhammasami.

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Accepted by Jiatao Li, Area Editor, 17 September 2020. This article has been with the authors for four revisions.

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Andrews, T.G., Nimanandh, K., Htun, K.T. et al. MNC response to superstitious practice in Myanmar IJVs: Understanding contested legitimacy, formal–informal legitimacy thresholds, and institutional disguise. J Int Bus Stud 53, 1178–1201 (2022). https://doi.org/10.1057/s41267-020-00377-z

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