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Managing Institutional Complexity: A Longitudinal Study of Legitimacy Strategies at a Sportswear Brand Company

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Abstract

Multinational corporations are operating in complex business environments. They are confronted with contradictory institutional demands that often represent mutually incompatible expectations of various audiences. Managing these demands poses new organizational challenges for the corporation. Conducting an empirical case study at the sportswear manufacturer Puma, we explore how multinational corporations respond to institutional complexity and what legitimacy strategies they employ to maintain their license to operate. We draw on the literature on institutional theory, contingency theory, and organizational paradoxes. The results of our qualitative longitudinal study show that managing corporate legitimacy is a dynamic process in which corporations adapt organizational capacities, structures, and procedures.

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Notes

  1. For more information on the Jo-In Project see http://www.jo-in.org/pub/turkey.shtml or here http://www.fairlabor.org/our-work/special-projects/project/jo-project.

  2. The Fair Wear Foundation’s assessment of the Wage Ladder Methodology: http://www.fairwear.ch/ul/cms/fck-uploaded/documents/fwfpublications_reports/wageladderbackgroundstudy.pdf.

  3. Asia Floor Wage Report https://www.cleanclothes.org/resources/publications/road-map-to-afw-may-1-2011.pdf.

  4. The Clean Clothes Campaign’s assessment of Puma’s wage policies from 2013 can be found here https://www.cleanclothes.org/livingwage/tailoredwages/tailored-wages-position/puma-profile.pdf.

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Acknowledgments

We would like to thank the interview partners of this study for their time and commitment. We are particularly grateful for the support of Reiner Hengstmann, Stefan Seidel, and Charmaine Nuguid-Anden from the Puma S.A.F.E. department. We also thank the Swiss National Science Foundation for their financial support.

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Correspondence to Dorothee Baumann-Pauly.

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Baumann-Pauly, D., Scherer, A.G. & Palazzo, G. Managing Institutional Complexity: A Longitudinal Study of Legitimacy Strategies at a Sportswear Brand Company. J Bus Ethics 137, 31–51 (2016). https://doi.org/10.1007/s10551-014-2532-x

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