This paper focuses on ‘institutional void’ (IV) and ‘civil society’ (CS). Investigating five European MNEs in a fragmented business system by using a multiple-case-study method and a sense-making approach, we explore how IV and CS affect MNEs and how MNEs respond to them in pursuit of legitimacy. Our study reveals three forms of IV, i.e., system void, value chain void, and void between social need and citizen services, and two broad roles of CS, being an enabler and constrainer that affect MNE operations and survival. We validate four types of legitimacy strategies presented by previous research: adaptation, bypass, manipulation, and intervention/innovation. However, the paper goes further by presenting an operational framework for legitimacy strategy, postulating that it is grounded in the ‘corporate commitment’ of MNEs and is operationalized either by ‘corporate initiative’ or ‘collaborative engagement’. It further illustrates how, through these two strategic initiatives, MNEs can earn and maintain four levels of legitimacy, i.e., acceptance, image, endorsement, and synergy. The paper contributes to the theory and practice of institutionalism, international management, and strategic management by emphasizing the co-evolutionary perspective of legitimation.
|Title of host publication||European International Business Academy Conference proceedings-2014 : THE 40TH EIBA CONFERENCE|
|Place of Publication||11-13 December, Uppsala University, Sweden|
|Publisher||European International Business Academy|
|Publication date||11 Dec 2014|
|Publication status||Published - 11 Dec 2014|