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。
Similar content being viewed by others
REFERENCES
Aguilera, R. V., & Grogaard, B. 2019. The dubious role of institutions in international business: A road forward. Journal of International Business Studies, 50(1): 20–35.
Andrews, T. G., Chompusri, N., & Baldwin, B. J. 2003. The changing face of multinationals in Southeast Asia. London: Routledge.
Andrews, T. G., & Htun, K. T. 2017. Corruption in Myanmar: Insights from business and education. In M. Dela Rama & C. Rowley (Eds.), The changing face of corruption in the Asia Pacific: Current perspectives and future challenges (pp. 233–242). Amsterdam: Elsevier.
Aung, A. T. 1962. Folk elements in Burmese Buddhism. London: Oxford University Press.
Besharov, M. L., & Smith, W. K. 2014. Multiple institutional logics in organizations: Explaining their varied nature and implications. Academy of Management Review, 39(3): 364–381.
Block, L., & Kramer, T. 2009. The effect of superstitious beliefs on performance expectations. Journal of the Academy of Marketing Science, 37(2): 161–169.
Boettke, P., Coyne, C., & Leeson, P. T. 2008. Institutional stickiness and the new development economics. American Journal of Economics and Sociology, 67(2): 331–358.
Cantwell, J. L., Dunning, J. H., & Lundan, S. M. 2010. An evolutionary approach to understanding international business activity: The co-evolution of MNEs and the institutional environment. Journal of International Business Studies, 41(4): 567–586.
Case, T. L., Fitness, J., Cairns, D. R., & Stevenson, R. J. 2004. Coping with uncertainty: Superstitious strategies and secondary control. Journal of Applied Social Psychology, 34(4): 848–887.
Chacar, A. S., Newburry, W., & Vissa, B. 2010. Bringing institutions into performance persistence research: Exploring the impact of product, financial, and labor market institutions. Journal of International Business Studies, 41(7): 1119–1140.
Child, J., & Tsai, T. 2005. The dynamic between firms’ environmental strategies and institutional constraints in emerging economies: Evidence from China and Taiwan. Journal of Management Studies, 42(1): 95–114.
Chinchanachokchai, S., Pusaksrikit, T., & Pongsakornrungsilp, S. 2017. Exploring different types of superstitious beliefs in risk-taking behaviors: What we can learn from Thai consumers. Social Marketing quarterly, 23(1): 47–63.
Cockett, R. 2015. Blood, dreams & gold: The changing face of Burma. New Haven: Yale University Press.
Converse, B. A., Risen, J. L., & Carter, T. J. 2012. Investing in Karma: When wanting promotes helping. Psychological Science, 23(8): 923–930.
Dagnall, N., Parker, A., & Munley, G. 2009. Assessing superstitious belief. Psychological Reports, 104(2): 447–454.
Dhammadana.org. 2005. The 13 Samghadisesas. http:///www.en.dhammadana.org. Accessed 17 December 2019.
Dhammananda, K. S. 1998. What the Buddha believes. Malaysia: Buddhist Missionary Society.
DiMaggio, P. J., & Powell, W. W. 1983. The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2): 147–160.
Doty, H. D., & Glick, W. H. 1994. Typologies as a unique form of theory building: Toward improved understanding and modeling. Academy of Management Review, 19(2): 230–251.
Estrin, S., & Prevezer, M. 2011. The role of informal institutions in corporate governance: Brazil, Russia, India and China compared. Asia Pacific Journal of Management, 28(1): 41–67.
Flyvbjerg, B. 2006. Five misunderstandings about case study research. Qualitative Inquiry, 12(2): 219–245.
Foster, K. R., & Kokko, H. 2009. The evolution of superstitious and superstition-like behavior. Proceedings of Biological Sciences, 276(1654): 31–37.
Gaur, A. S., Delios, A., & Singh, K. 2007. Institutional environments, staffing strategies, and subsidiary performance. Journal of Management, 33(4): 611–636.
Gioia, D. A., Corley, K. G., & Hamilton, A. L. 2013. Seeking qualitative rigor in inductive research: Notes on the Gioia methodology. Organizational Research Methods, 16(1): 15–31.
Greenwood, R., Raynard, M., Kodeih, F., Micelotta, E. R., & Lounsbury, M. 2011. Institutional complexity and organizational responses. Academy of Management Annals, 5(1): 317–371.
Helmke, G., & Levitsky, S. 2004. Informal institutions and comparative politics: A research agenda. Perspectives on Politics, 2(4): 725–740.
Henisz, W. J., & Swaninatham, A. 2008. Institutions and international business: Introduction to the special issue. Journal of International Business Studies, 39(4): 537–539.
Hernandez, M. D., Wang, Y. J., Minor, M. S., & Liu, Q. 2008. Effect of superstitious beliefs on consumer novelty seeking and independent judgment making: Evidence from China. Journal of Consumer Behavior, 7(6): 424–438.
Hla, P. 1985. Burma: Literature, historiography, scholarship, language, life and Buddhism. Singapore: Institute of Southeast Asian Studies.
Hung, S. C., & Whittington, R. 1997. Strategies and institutions: A pluralistic account of strategies in the Taiwanese computer industry. Organization Studies, 18(4): 551–576.
Jayawardena, R. G. D. 2015. What the Buddha thought about superstition. International Journal of Scientific Research and Innovative Technology, 2(6): 217–230.
Khanna, T., & Palepu, K. G. 2000. Why focused strategies maybe wrong for emerging markets. Harvard Business Review, 75(4): 41–51.
Kostova, T., Beugelsdijk, S., Scott, W. R., Kunst, V. E., Chua, C. H., & van Essen, M. 2020. The construct of institutional distance through the lens of different institutional perspectives: Review, analysis and recommendations. Journal of International Business Studies, 51(4): 467–497.
Kostova, T., & Roth, K. 2002. Adoption of an organizational practice by subsidiaries of multinational corporations: Institutional and relational effects. Academy of Management Journal, 45(2): 215–233.
Kostova, T., Roth, K., & Dacin, M. T. 2008. Institutional theory in the study of multinational corporations: A critique and new directions. Academy of Management Review, 33(4): 994–1006.
Kostova, T., & Zaheer, S. 1999. Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review, 24(1): 64–81.
Kraatz, M. S., & Block, E. S. 2008. Organizational implications of institutional pluralism. In R. Greenwood, C. Oliver, R. Suddaby, & K. Sahlin (Eds.), The Sage handbook of organizational institutionalism (pp. 243–275). Thousand Oaks, CA: Sage.
Lauth, H.-J. 2000. Informal institutions and democracy. Democratization, 7(4): 21–50.
Li, C., & Hofmeister, W. (Eds.). 2009. Myanmar: Prospect for change. Singapore: Select Publishing.
Littlewood, D. C., Rodgers, P., & Williams, C. 2018. Experiences, causes and measures to tackle institutional incongruence and informal economic activity in South-East Europe. Current Sociology, 38(2): 157–174.
Locke, K. 2001. Grounded theory in management research. Thousand Oaks, CA: Sage.
Lundan, S. M., & Li, J. 2019. Adjusting to and learning from institutional diversity: Toward a capability-building perspective. Journal of International Business Studies, 50(1): 36–47.
Manser, B.A. 2017. Myanmar economic monitor. http://pubdocs.worldbank.org/en/138051510537368636/Myanmar-Economic-Monitor-October-2017. Accessed 16 July 2018.
Meyer, J. W., & Rowan, B. 1977. Institutionalized organizations: Formal structure as myth and ceremony. The American Journal of Sociology, 83(2): 340–363.
Miles, M. B., & Huberman, A. M. 1984. Qualitative data analysis. Beverly Hills, CA: Sage.
North, D. C. 1990. Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.
North, D. C. 2005. Understanding the process of economic change. Princeton, NJ: Princeton University Press.
O’Brien, H. 1991. Forgotten land: A rediscovery of Burma. London: Michael Joseph.
Oliver, C. 1991. Strategic responses to institutional processes. Academy of Management Review, 16(1): 145–179.
Pache, A.-C., & Santos, F. 2010. When worlds collide: The internal dynamics of organizational responses to conflicting institutional demands. Academy of Management Review, 35(3): 455–476.
Pejovich, S. 1999. The effects of the interaction of formal and informal institutions on social stability and economic development. Journal of Markets and Morality, 2(2): 164–181.
Peng, M. W., Wang, D. Y. L., & Jiang, Y. 2008. An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies, 39(5): 920–936.
Pennington, M. 2016. US takes slow road on Myanmar sanctions. Bangkok Post, May 15th. Bangkok: Post Publishing.
Pitakam, C., & Khuddakanikaye, S. P. 2015. Milindapanha. Sagaing: Sitagu International Buddhist Academy.
Ralston, D. A. 2008. The crossvergence perspective: Reflections and projections. Journal of International Business Studies, 39(1): 27–40.
Ramus, T., Vaccaro, A., & Brusoni, S. 2017. Institutional complexity in turbulent times: Formalization, collaboration, and the emergence of blended logics. Academy of Management Journal, 60(4): 1253–1284.
Regner, P., & Edman, J. 2014. MNE institutional advantage: How subunits shape, transpose and evade host country institutions. Journal of International Business Studies, 45(3): 275–302.
Rosenzweig, P. M., & Singh, J. V. 1991. Organizational environments and the multinational enterprise. Academy of Management Review, 16(2): 340–361.
Sartor, M. A., & Beamish, P. W. 2014. Offshoring innovation to emerging markets: Organizational control and informal institutional distance. Journal of International Business Studies, 45(9): 1072–1095.
Shirodkar, V., & Konara, P. 2016. Institutional distance and foreign subsidiary performance in emerging markets: Moderating effects of ownership strategy and host-country experience. Management International Review, 57(2): 179–207.
Shorter Oxford English Dictionary, 5th edition. 2002. Oxford: Oxford University Press.
Silverman, D. 2006. Interpreting qualitative data: Methods for analyzing talk, text and interaction. London: Sage.
Spiro, M. E. 1967. Burmese supernaturalism. Philadelphia: Prentice Hall.
Suchman, M. 1995. Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3): 571–610.
Syrota, T. 2003. Welcome to Burma: And enjoy the totalitarian experience. Bangkok: White Orchid Press.
Temple, R. C. 1906. The thirty seven Nats. London: W. Griggs.
Thera, N. 2009. A manual of Abhidamma. Yangon: Ministry of Religious Affairs.
Tolbert, P. S., & Zucker, L. G. 1983. Institutional sources of change in the formal structure of organizations: The diffusion of civil service reform 1880–1935. Administrative Science Quarterly, 28(1): 22–39.
Tsai, K. S. 2006. Adaptive informal institutions and endogenous institutional change in China. World Politics, 59: 116–141.
Tsang, E. W. K. 2004a. Toward a scientific inquiry into superstitious business decision making. Organization Studies, 25(6): 923–946.
Tsang, E. W. K. 2004b. Superstition and decision-making: Contradiction or complement? Academy of Management Executive, 18(4): 92–104.
Tsang, E. W. K., & Williams, J. N. 2012. Generalization and induction: Misconceptions, clarifications, and a classification of induction. MIS Quarterly, 36(3): 729–748.
Volberda, H. W., & Lewin, A. Y. 2003. Co-evolutionary dynamics within and between firms: From evolution to co-evolution. Journal of Management Studies, 40(8): 2111–2136.
Vyse, S. A. 2000. Believing in magic: The psychology of superstition. Oxford: OUP.
Waeger, D., & Weber, K. 2019. Institutional complexity and organizational change: An open polity perspective. Academy of Management Review, 44(2): 336–359.
Webb, J. W., Tihanyi, L., & Ireland, R. D. 2009. You say illegal, I say legitimate: Entrepreneurship in the informal economy. Academy of Management Review, 34(3): 492–510.
Westjohn, S. A., Roschk, H., & Magnusson, P. 2017. Eastern versus Western culture pricing strategy: Superstition lucky numbers and localization. Journal of International Marketing, 25(1): 72–90.
Williams, C. C., Horodnic, I. A., & Windebank, J. 2015. Explaining participation in the informal economy: An institutional incongruence perspective. International Sociology, 30(3): 294–313.
Williamson, O. E. 2000. The new institutional economics: Taking stock, looking ahead. Journal of Economic Literature, 38(3): 595–613.
Xu, D., & Shenkar, O. 2002. Institutional distance and the multinational enterprise. Academy of Management Review, 27(4): 608–618.
Yin, S. M. 2013. Myanmar: A survival guide to customs and etiquette. Singapore: Marshall Cavendish.
Yin, R. K. 2018. Case study research and applications (6th ed.). London: Sage.
Yukongdi, V. 2010. A study of Thai employees’ preferred leadership style. Asia Pacific Business Review, 16(1–2): 161–181.
Zaheer, S., & Mosakowski, E. 1997. The dynamics of the liability of foreignness: A global study of survival in financial services. Strategic Management Journal, 18(6): 439–464.
Zajac, E. J., & Westphal, J. D. 1995. Accounting for the explanations of CEO compensation: Substance and symbolism. Administrative Science Quarterly, 40(2): 283–308.
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.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Accepted by Jiatao Li, Area Editor, 17 September 2020. This article has been with the authors for four revisions.
Rights and permissions
About this article
Cite this article
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
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1057/s41267-020-00377-z