Abstract
Prior research on firms’ liability of foreignness (LOF) has emphasized the role of isomorphic behavior in overcoming LOF. However, the literature has not adequately considered how firms can overcome LOF under conditions of institutional complexity, when fundamental differences in firms’ home and host country values, beliefs, and rules may make isomorphic behaviors impossible or undesirable. In this article, we use the emerging research on institutional logics and institutional entrepreneurship to address this important issue by examining case studies of eight foreign mining MNEs experiencing LOF in Sub-Saharan Africa. Based upon our qualitative analysis, we find that MNEs can overcome LOF by co-creating new institutional logics rather than conforming to existing ones. Yet our data show that this is a difficult process, one that may not be capable of being done unilaterally by the MNE. Instead, we find that local employees embedded in both sets of competing institutional logics acted as key intermediaries who facilitated institutional entrepreneurship. Moreover, we found that firms’ implementation strategy matters as well: in some cases, institutional entrepreneurship mitigated LOF; in others, friction returned to varying degrees.
Résumé
Les recherches antérieures sur la contrainte d’extranéité (CDE) ont souligné le rôle du comportement isomorphique pour surmonter la CDE. Toutefois, la littérature n’a pas correctement considéré comment les firmes peuvent surmonter la CDE dans des conditions de complexité institutionnelle; quand les différences fondamentales entre les valeurs, les croyances et les rôles du pays d’origine et du pays d’accueil des firmes peuvent rendre les comportements isomorphiques impossibles ou non-désirables. Dans cet article, nous utilisons la recherche émergente sur les logiques institutionnelles et l’entrepreneuriat institutionnel pour traiter cet aspect important en examinant les cas de huit entreprises multinationales (EMN) minières qui font face à la CDE en Afrique de l’Est. En nous appuyant sur notre analyse qualitative, nous constatons que les EMN peuvent surmonter la CDE en co-créant de nouvelles logiques institutionnelles plutôt qu’en se conformant à celles qui existent déjà. Cependant, nos données montrent qu’il s’agit d’un processus difficile qui peut ne pas être accompli de manière unilatérale par les EMN. Au contraire, nous constatons que les employés locaux enchâssés dans les deux catégories de logiques institutionnelles agissent comme des intermédiaires clés facilitant l’entrepreneuriat institutionnel. Par ailleurs, nous observons que la mise en œuvre de la stratégie de la firme joue également un rôle : dans certains cas, l’entrepreneuriat institutionnel modère la CDE; dans d’autres, la tension revient à des degrés variés.
Resumen
La investigación previa sobre la desventaja de extranjería (LOF) ha enfatizado en el rol del comportamiento isomorfo de las empresas para superar la LOF. Sin embargo, la literatura no ha considerado adecuadamente como las empresas pueden superar la LOP bajo condiciones de complejidad institucional, cuando diferencias fundamentales en los valores, creencias y reglas del país de origen y del país anfitrión de la empresa puede hace el comportamiento isomorfo o imposible o indeseable. En este artículo, usamos la investigación emergente sobre las lógicas institucionales y el emprendimiento institucional para direccionar este aspecto importante mediante la examinación de casos de estudio de ocho EMN mineras con experiencia de LOF en África Oriental. Con base en nuestro análisis cualitativo, encontramos que las EMN pueden sobreponer la LOF mediante la co-creación de nuevas lógicas institucionales en lugar de conformarse con las existentes. Sin embargo, nuestros datos muestran que esto es un proceso difícil, que no puede ser realizado unilateralmente por la EMN. En cambio, encontramos que los empleados locales integrados en ambos conjuntos de lógicas institucionales competidoras actúan como intermediarios clave que facilitaron el emprendimiento institucional. Además, encontramos que la implementación de la estrategia en las empresas también es importante: en algunos casos, el emprendimiento institucional mitigó la LOF; en otros, la fricción retornó en grados variables.
Resumo
A pesquisa prévia sobre a desvantagem de ser estrangeiro (LOF) enfatizou o papel do comportamento isomórfico na superação da LOF. No entanto, a literatura não considerou adequadamente como empresas podem superar a LOF em condições de complexidade institucional, quando diferenças fundamentais nos valores, crenças e regras do país de origem e do país de acolhimento podem tornar comportamentos isomórficos impossíveis ou indesejáveis. Neste artigo, utilizamos a pesquisa emergente sobre lógicas institucionais e empreendedorismo institucional para abordar essa importante questão ao examinar estudos de caso de oito multinacionais estrangeiras de mineração enfrentando a LOF na África Oriental. Com base em nossa análise qualitativa, descobrimos que multinacionais podem superar a LOF criando novas lógicas institucionais em vez de se conformarem com as existentes. No entanto, nossos dados mostram que este é um processo difícil, que pode não ser capaz de ser feito unilateralmente pela multinacional. Em vez disso, achamos que funcionários locais envolvidos em ambos os conjuntos de lógicas institucionais concorrentes atuaram como intermediários chave que facilitaram o empreendedorismo institucional. Além disso, descobrimos que a estratégia de implementação das empresas também é importante: em alguns casos, o empreendedorismo institucional mitigou LOF; em outros, a fricção voltou a vários níveis.
摘要
先前关于公司异国劣势(LOF)的研究强调了同构行为对克服LOF的作用。然而,文献没有充分考虑公司在制度复杂性条件下如何克服LOF,即当公司母国和东道国的价值观、信仰和规则的根本差异可能使同构行为不可能或不可取的时候。在这篇文章中,我们利用对制度逻辑和制度创业的新兴研究,通过对八家外国矿业跨国企业在东非经历的LOF的案例研究来解决这个重要问题。基于我们的定性分析,我们发现跨国公司可以通过共同创造新的制度逻辑不是墨守现有的逻辑来克服LOF。然而,我们的数据显示,这是一个困难的过程,可能无法由跨国企业单方面来完成。相反,我们发现,嵌入两种相互竞争的制度逻辑的本地员工起到了制度创业关键的中介作用。此外,我们发现企业的实施策略也很重要:在某些情况下,制度创业缓解LOF; 在其他情况下,摩擦回到不同程度。
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Acknowledgments
This research was supported by the social sciences for humanities research council, Canada (SSHRC – Grant No. 430-2016-00007). This research benefitted from the assistance of a number of government institutions and non-governmental organizations: the Tanzania Foundation for Civil Society, Community Development and Relief Trust, the Tanzania Investment Centre, the Tanzania Revenue Authority, Rwanda Development Board, and the Burundi Investment Promotion Agency. We would like to thank Area Editor Mona Makhija and three anonymous JIBS reviewers for their valuable comments and feedback. We would also like to thank Oded Shenkar, Chris Sutter, and Marc Ventresca for their invaluable feedback and advice on earlier versions of this article.
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Accepted by Mona Makhija, Area Editor, 27 August 2017. This article has been with authors for three revisions.
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Newenham-Kahindi, A., Stevens, C.E. An institutional logics approach to liability of foreignness: The case of mining MNEs in Sub-Saharan Africa. J Int Bus Stud 49, 881–901 (2018). https://doi.org/10.1057/s41267-017-0111-y
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DOI: https://doi.org/10.1057/s41267-017-0111-y